§ (1) The following assets, namely, proprietary interests of colliery concerns and of Class A and Class B subsidiaries thereof in patents for inventions intended for use or capable of being used for or in connection with colliery production activities, and in copyrights in registered designs intended for application or capable of being applied to articles adapted for use for or in connection with such activities, shall be subject to the following provision, that is to say, the Board and the owner thereof shall each have the option to require that any such assets shall vest in the Board, exercisable by notice in writing given to the other, and unless the party to whom the notice is given (whether the owner or the Board) gives to the other a counter-notice in writing objecting, as respects all or any of the assets to which the original notice relates, to the vesting thereof in the Board, the assets shall vest in the Board on the first day of the month next after that in which the notice is given:
§ Provided that if the notice is given before the primary vesting date, the vesting shall be on that date.
§ (2) Where a counter-notice is given as mentioned in the preceding Subsection, the question whether the assets as to which objection is made, or any of them, are to vest in the Board shall be determined by arbitration under this Act.
§ In considering any question which is to be determined by arbitration under this Subsection the arbitrator shall have regard to the matters to which he is required by Subsection (3) of Section five of this Act to have regard in considering a question which is to be determined by arbitration thereunder.
§ (3) If, upon a reference under the last preceding Subsection where the exercise of the option in question is by the Board, the arbitrator is of opinion with respect to any patent or copyright which is the subject of the reference that the Board ought to be enabled to do all or any of the following things in relation to the invention which is the subject of the patent, namely, to make, use, exercise or vend it, or ought to be enabled to apply the design which is the subject of the copyright, as the case may he but that the proprietary interest in the patent or copyright ought not to vest in the Board, he shall have power by his award to grant to the Board a licence under the patent or copyright (not being an exclusive licence) on such terms as may be settled by him and specified in the award, being terms appearing to him to be such as would be agreed upon between a willing grantor and a willing grantee.
§ (4) An award granting a licence under the preceding Subsection shall, without prejudice to any other method of enforcement, operate as if it were embodied in a deed granting the licence which the owner of the proprietary interest in the patent or copyright and all other parties having any interest therein had executed with full capacity so to do, and the award shall operate to take way from any such party any right in relation thereto the exercise whereof would be inconsistent with the exercise of the licence in accordance with and subject to the terms on which it is granted.
§ (5) Where the award of the arbitrator under Subsection (2) of this Section is that a proprietary interest in a patent or copyright is to vest in the Board the date of its vesting shall be such as it would have been if the original notice had been given on the date of the award.
§ (6) Subsections (1), (2) and (5) of this Section shall apply to interests of colliery concerns and Class A subsidiaries thereof in such patents and copyrights as are mentioned in the said Subsection (1), being interests subsisting by virtue of licences, as they apply to proprietary interests.
§ (7) Subsections (4) to (7) of Section five of this Act, shall, with the requisite modifications apply for the purposes of this Section as they apply for the purposes of that Section.
§ (8) The Minister may by regulations make such provision supplementary to or consequential on the provisions of this Section as appears to him to be necessary or expedient, and in particular, but without prejudice to the generality of this Subsection, provision may be made by regulations made thereunder for adapting the terms of licences to changes consequent on the passing of this Act in the circumstances in which they will fall to be exercised 1553 after the date of a transfer of interests subsisting by virtue thereof.
§ (9) In this Section the expression "proprietary interest," in relation to a patent, means the interest of a person whose name is for the time being entered in the register of patents as the grantee or proprietor of the patent or as one of two or more grantees or proprietors thereof, and, in relation to a registered design, means the interest of a person whose name is for the time being entered in the register of designs as the proprietor of the design or as one of two or more proprietors thereof, and references in this section to colliery production activities and to subsidiaries of colliery concerns shall be construed in accordance with the relevant definitions contained in the First Schedule to this Act.
§ (10) A patentee shall not be deemed to be precluded from making to the Comptroller General of Patents, Designs and Trade Marks a request under Section twenty-four of the Patents and Designs Act, 1907, for a patent to be indorsed with the words "licences of right" by reason of a licence having been granted under the patent under this Section. —[Mr. Glenvil Hall.]
§ Brought up, and read the First time.
§ Mr. Glenvil Hall:
I beg to move, "That the Clause be read a Second time."
I should call the attention of the Committee to a misprint in line 4 on page 1458 of the Order Paper. Instead of the words "concerns and Class A subsidiaries", it should read "concerns and of Class A and Class B subsidiaries". The wording will then correspond with the same words which appear at the beginning of the Clause.
This new Clause is moved because paragraph 7 of the First Schedule, which automatically vests in the Board the interests of colliery concerns and Class A subsidiaries in patents and trade marks, was found to be defective. It did not, for example, include copyrights in registered designs. Its provisions, in the view of many, were too drastic with regard to patents, and it treated trade marks as much too important a matter. The whole subject has now been reviewed and, as a result I am in consequence, moving this new Clause on behalf of my right hon. Friend. On paper, I must admit the new Clause looks rather formidable but in actual fact the effect of it is small.
To begin with, so far as the copyrights are concerned, it has now been decided to provide for vesting in the Board copyrights in registered designs, and as they 1554 are similar to patents and the same provisions should apply equally to both, both have been included in this New Clause. The Clause also provides that the interests of colliery concerns and of Class A and Class B subsidiaries in patents and in copyrights in registered designs are under the New Clause to be transferred at the option of either the Board or the owners of the interests, subject to arbitration should one or other of the parties object. If arbitration arises because objection is made to the exercise of its option by the Board, requiring a transfer to it of the proprietary interest in a patent or copyright, and as a result the arbitrator decides that the patent or copyright should not be vested in the Board but that nevertheless the Board ought to have certain rights over it, in order to use it, he may if he thinks fit allow the Board to use that copyright or patent under licence on such terms as he may, in his wisdom, lay down. As to terms, he must, under the New Clause, be guided by what, in his view, are likely to be the terms arrived at between a willing grantor to a willing grantee. This, in the view of my right hon. Friend, provides a halfway house between vesting the patent or copyright in the Board and leaving it with the colliery concern. It is a necessary provision since colliery concerns, and particularly composite concerns, may have a patent which could be used to great advantage in relation to other activities which do not pass to the the Board under the Bill.
The Clause is divided into Subsections. Subsections (1), (2) and (5) are, I will not say a rehash, but an amalgam of Subsections (2) and (3) of Clause 5 which deals with the transfer to the Board of assets generally. Subsection (4) of our New Clause is merely an ancilliary provision and deals with the effect of an award granting a licence under Subsection (3). Subsection (io), to which I should also call attention, provides that when a licence has been granted to the Board under a patent, the patentee shall not be precluded from making a request to the Comptroller General of Patents, Designs and Trade Marks for the patent to be endorsed "licences of right." Trade marks, which also are dealt with under this new Clause, are relatively unimportant and are in our view definitely more suitable for the option procedure 1555 than for automatic vesting, and provision is taken, as hon. Members will see, for the option machinery to be applied to the vesting of trade marks just as they are to be applied to copyrights in designs and patents. In conclusion, I think this Clause meets generally some of the criticisms which were made when we were dealing with this matter in Committee. We have done our best to meet those criticisms where we thought there was something in them, and, that being so, I hope that without too much discussion —as we have a great number of Amendments to get through—the Committee will allow us to have this Clause.
§ Sir J. Mellor:
On a point of Order. Has a manuscript Amendment been moved to correct what the Financial Secretary described as a misprint in line 4 on page 1458 of the Amendment Paper?
§ The Chairman:
No, the circumstances were mentioned by the Financial Secretary, who moved the new Clause in the amended, or correct, form.
§ Mr. Glenvil Hall:
I took occasion to indicate that there was this printer's error, and if hon. Members saw no objection, and the Chair saw no objection, I thought it would save time to move the new Clause in corrected form.
§ Mr. H. Macmillan:
With regard to the minor point raised by the hon. Member for Sutton Coldfield (Sir J. Mellor), which was a perfectly good point, the Minister was kind enough to advise me beforehand that the mistake had been made, and I thought that it could be dealt with in this way. It is purely a printer's or a verbal error. I see that the Attorney-General is now with us.
§ Mr. Macmillan:
The Attorney-General is back from his weekend at Eastbourne where he described the Opposition as "reckless and hysterical." I think he will not regard it as hysterical on my part, or reckless, if I ask one or two questions on this new Clause. We have had no opportunity of discussing it, and it is part of the general scandal of the way in which proceedings are going on on this Bill. Here is a Clause which occupies two pages of 1556 printed matter. I challenge any hon. Member of the Committee clearly to understand it from the explanation given by the Financial Secretary. I would offer a small prize to hon. Members opposite to rise and take part in these proceedings. I am not blaming them, but we who are allowed to see these Amendments only a day or two before discussing them, find ourselves in difficulties. It is part of the reckless and hysterical rate of legislating.
I have tried to understand the Clause during the Saturday and Sunday we were given in which to study the matter. It takes out the particular class of asset from those transferred without option to the Board. Instead of being in Part I of the first Schedule, the patent copyright designs and trade marks are not automatically transferred to the Board. They fall out of that category of automatic transfer. That clearly is important and just. We welcome it, and thank the Government for making the alteration. It is clear that these patents, copyrights, trade marks and designs might be valuable to the concerns for many processes not transferred to the Board. Therefore it is obviously fair that they should retain the rights of their designs for use for other purposes which they are still allowed by a beneficent Government to carry on.
What I am not quite sure of are the first four Subsections of this Clause, which the Financial Secretary said was a "rehash" of Clause 5 which deals with the transfer of assets. I would not have ventured to use a word so derogatory, nor do I think it is quite accurate. What I think he meant was that they apply the rules laid down in Clause 5 which apply generally in the transfer of assets. Is that right?
§ Mr. Macmillan:
As I understand it the rights in these patents or copyrights will remain in the concern, that is the actual ownership of the rights, but the Board if it wishes to use them will have the right of going to arbitration?
§ Mr. Macmillan:
It may be that under arbitration the whole will be transferred. What has to be settled is whether the sole right is given or whether it is transferred in toto to the Board. Suppos- 1557 ing the arbitration decides to leave the actual rights with the proprietor, then the designs can be given by the arbitrator to the Board to use. Can the sole licence to use, or licence to use be given? That is a distinction on which I would like an answer. There is in the ordinary patent or copyright a distinction between the sole right to reproduce, or the right to reproduce. I wish to know whether the arbitrator can give to the Board the sole right, or merely the right. I am not a lawyer, but I want to know whether these words mean that or not. There is a distinction which would allow the proprietors to use the right for themselves for other purposes, or to sublet it in the ordinary way to other users.
§ Mr. Macmillan:
Is he given a choice of transferring? Can he transfer the sole right or not? I understand that the arbitrator can decide to transfer to the Board or can give the sole rights to the proprietor. If he decides to give the sole rights to the Board, can the original proprietors or anyone else through arbitration use the patent or design? Is it a two-way traffic? If the rights are left to the proprietors, can the Board have a licence or if the rights are transferred, can the Board have a licence to use them? We are grateful for the Clause as a whole because it meets the point raised in Committee that these rights ought to be taken out of the Schedule of automatic transfers without option, and put into a Schedule where the automatic transfer operates.
§ 7.0 p.m.
§ The Attorney-General:
The right hon. Member for Bromley (Mr. H. Macmillan) has shown such a complete mastery of the provisions of this new Clause that his opening observations about the impossibility of dealing with these matters owing to the shortness of time was, perhaps, a little hysterical. The right hon. Gentleman has indicated exactly correctly the effect of the Clause. There is no power for the arbitrator to give an exclusive licence, indeed the patentee is entitled, if he so desires, to have the patent endorsed for licences as of right. The answer to the second question is that the arbitrator has no power to vest a patent in the Board and to provide that the Board must licence the old patentee.
§ Mr. MacMillan:
I am grateful for that point. Would not that be possible in 1558 some cases, and a rather reasonable thing to do? Could the hon. and learned Gentleman look at it and see whether the counter position could be conveniently used?
§ Mr. Hale:
May I ask why it is necessary to transfer the powers from Subsection (4) to (7) of Clause 5 to this new Clause? There is power to make regulations on matters largely irrelevant to the new Clause and Clause 8 gives full powers to make Regulations. If I have not made myself clear, there are two successive Clauses involved, Clause 7 and Clause 8. Clause 8 gives the Minister the fullest power to make Regulations on this matter. Subsection (8) of the new Clause states:The Minister may by regulations make such provision supplementary to or consequential on the provisions of this Section as appears to him to be necessary or expedient, and in particular, but without prejudice to the generality of this Subsection, provision may be made by regulations made thereunder for adapting the terms of licences to changes consequent on the passing of this Act in the circumstances in which they will fall to be exercised after the date of a transfer of interests subsisting by virtue thereof.The power in these words is a precise parallel to the opening words of Subsection (7) of Clause 5. In the concluding words there is no reference to the matter we are now discussing.
§ Mr. Turner-Samuels:
In respect to what the Attorney-General has said regarding Subsection (10), I think that the point the right hon. Member for Bromley (Mr. H. Macmillan) has raised should be carefully looked at. The effect of the material part of the Clause in question appears to be that the decision of the arbitrator may be to refuse to grant a licence to the proprietor. Subsection (10) appears only to provide that, notwithstanding any decision of the arbitrator, a patentee shall not be deemed to be precluded from applying to the comptroller-general for a grant of licence or licences. I would therefore ask the Attorney-General to look at the matter again in the light of that view
§ The Attorney-General:
I will look at the hon. Gentleman's point too.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.