§ 3.48 p.m.
§ Mr. Eric Fletcher (Islington, East)
I beg to move, in page 6, line 1, to leave out subsection (3).
You will recall, Sir Rhys, that when we adjourned the debate on Thursday evening, and a Motion to report Progress was accepted, we were in the middle of discussing the merits and demerits of Clause 6, and the President of the Board of Trade had explained that whereas Clause 5 was designed to say what should go into the Bill, Clause 6 was designed to say what should be left out. The right hon. Gentleman did not need very much persuasion to agree that subsection (2) of Clause 6 needed a great deal of modification, to say the least, before it was either intelligible or acceptable, and it was at that point that we adjourned our discussions before coming on to subsection (3).
The purpose of this Amendment is to delete subsection (3), which deals with the whole class of patents. We wish, first, to learn from the Government whether, and, if so, why, it is necessary that all patents, patent agreements, licensing under patents—and, if the Minister's Amendments are accepted, registered designs as well—should be excluded from the requirements of registration under the Bill.
As the Committee will appreciate, in a certain sense any agreements relating to patents have always been in a privileged condition under our law. In the days of Elizabeth I, patentees were given various rights and privileges of monopoly which were denied to other classes of traders. Patentees were entitled and, I think, encouraged to enter into restrictive agreements to license either one person or a limited number of persons, with power to exploit the benefit of their inventions.
I am not arguing whether that is right or wrong, whether it was a good or bad 216 thing, whether it worked well for our economy, or whether it produced disadvantages for our economy. In considering, as we are now doing, the whole field of restrictive practices and embarking on a common effort to remove from industry at large anything which is in the nature of a fetter upon expansion and development, we must obviously, at some stage in these Committee proceedings, consider the special place which has always been occupied by those who have made inventions entitling them to the protection of patents, or, as the President of the Board of Trade introduces by his Amendment, those who are entitled to similar protection by having registered designs as a result of an invention or innovation.
It seemed to us that the existing patent law is in itself sufficient—perhaps it is too wide—to protect the interests of patentees and their licensees. It struck us as anomalous, if not unnecessary, that they should require the further protection of being excluded entirely from any obligation to register those agreements under this Bill. It may well be that persons who are patentees or licensees under patents have entered or will enter into restrictive agreements of a kind injurious and obnoxious, just as those who deal in marketable goods not covered by patents have, in the past, entered into agreements which this Bill aims, first, to make registrable, and then to defeat if they are found to be contrary to the public interest.
This Amendment is in the nature of what is called technically a probing Amendment; as I say, we want to inquire, first, why the Government think it necessary that agreements between persons or associations relating to patents, under the terms of which patent licences are granted, should be exempt from the obligation to register. May it not be the case that, in addition to the protection which they have under the existing patent law, there may be those who deal in patented articles who will also enter into agreements of a restrictive kind which should be registered. They may enter into agreements with other manufacturers and dealers relating to articles not covered by the patent law. In these days, a great many manufactured articles are so complicated that certain ingredients are covered by patents while other ingredients are not, and very often there is a very debatable realm in between 217 in which it is very doubtful whether an alleged patent is valid or not.
It seems to us, therefore, that is quite unnecessary to add to the existing privileges of patentees a blanket exemption exonerating them from any obligation to register restrictive agreements, which otherwise would be registrable, if patented goods or, perhaps, goods the subject of very debatable patents, are in question. The Minister and the Parliamentary Secretary have spoken of trying to make the Bill as all-embracing as possible, and we would, therefore, hope that the Government would be willing to accept this Amendment, because we believe that the objects of the Bill would be served only if, whenever there is any doubt on the subject, an agreement is made subject to registration rather than exempted from it.
We feel that if there is any doubt about the matter, it is much better that an agreement should be brought into the full light of public knowledge. If it then transpires that, on the merits of some particular agreement, there is reason why, under a later provision, it should be deemed not to be contrary to public policy, that can be argued before the Court. In the case of doubt—and there must be many cases relating to patented articles where doubt would arise—such agreements should be registered and not be exempted from registration.
§ Mr. Donald Wade (Huddersfield, West)
The law of patent has for a long time been regarded as an exception to the general rule against agreements in restraint of trade. I agree with the general proposition of the hon. Gentleman the Member for Islington, East (Mr. E. Fletcher). Some form of exemption from the provisions of the Bill may be inevitable, but I do not think we can leave it at that.
In the first place, serious thought would have to be given to the law relating to patents to ensure that the law is not used to the disadvantage of the general public. That is a subject which I cannot very well pursue now it would scarcely be in order. The Liberal Committee on Monopolies, which reported in 1945, did go into this matter and did make some very interesting and—to use a word which was used last week—novel proposals.
218 This subsection may provide an unintended loophole. I do not wish to set myself up as a purveyor of ingenious devices for evading the Bill. I will take one hypothetical case. It is very similar to cases of Which in fact I am aware, but, as I think the Minister himself suggested in earlier debates, it is fairer to take hypothetical cases.
A man invents a safety device to be attached to a certain machine. He has his invention patented. A manufacturer agrees to make the gadget and obtains a licence. Then a couple of manufacturers of the machine itself ask for a sub-licence, and that is arranged. That is all perfectly proper and normal. The three manufacturers then agree upon a price list, in the first place for the gadget itself. Therefore, we have an agreed price list and the elimination of price competition.
It so happens that in the case which I am suggesting the manufacturers control practically the whole of the market for the machine. It appears to me that, having regard to the condition which provides that there shall be no price competition in respect of the patented article, the gadget would be excluded by subsection (3).
Suppose we take it a stage further and the manufacturers also agree, in the same agreement, that the machine of which the patented article is part should also be sold at a fixed price, so that there is no price competition. It may be that the machine and the gadget are combined in one article and sold at one price and, therefore, it is not possible to distinguish between the gadget and the machine. The agreement would normally be restricted under the Bill, but it may be excluded on account of subsection (3).
That is the kind of case which can easily arise, and I should like to know the Minister's view about it. If he cannot answer now, perhaps he will consider the matter before the Report stage. I can foresee the possibility of very considerable loopholes as a result of the use of the subsection resulting in patented articles being excluded from the provisions of Part I of the Bill.
§ Mr. M. Turner-Samuels (Gloucester)
I hope that the President of the Board of Trade will give the Committee some 219 solid, adequate reasons for retaining the provisions in subsection (3). I strongly support what has been said by my hon. Friend the Member for Islington, East (Mr. E. Fletcher).
I cannot see why there should be any difference between articles which are the subject of a patent or a licence from a patentee and proprietary articles. If we come to technical distinctions, there may be a philological difference, but I can see no logical difference between the two cases. If an agreement which deals with a proprietary article is subject to registration and examination by a court in the way that it will be, why should there be a distinction between that sort of article and a patented article which is, for all practical purposes, and certainly from the point of view of public interest, in exactly the same category? The gravamen of the matter seems to be why there should be this extraordinary discrimination.
I ask the President to consider this. I appreciate that it is right to protect the patentee, and I do not think that any of us would doubt that. The man who exercises skill and ingenuity and gives the public something of value should have his rights in that sense protected, but protecting a patent is one thing and exploiting the public with it is an entirely different matter, and that is what has to be considered.
There is no question here about protecting the man who is the proprietor or licensee of the patent. It is granted that he should have proper legal and proprietary protection. What must be in issue here, especially in the context of the Bill, is whether the public interest is being affected, whether there is any risk of the public being exploited in respect of articles emanating from the patent, just as there is risk of the public being exploited in connection with any other article, whether proprietary or not. That is the matter to which the Minister must apply his mind. I would ask him to cast his eye over the introductory words of the Title of the Bill—
§ Mr. Turner-Samuels
I hoped, Sir Rhys, that this would be relevant. I bow to your decision, of course, but I should like to explain why I introduced the subject.
An effort is being made to exclude a certain commodity, for that is what it is so far as the end-product is concerned; whether it is a patent or not, it is a certain commodity. I am seeking to show that, whereas the Bill in its Title affects every other matter apart from the exclusions stated here, it will allow this exclusion. I think I have made my point, so I will leave the Title of the Bill alone.
I should like the President to remember what The Times said about this matter. It said that the Bill was a precarious affair in any case. It seems to me that if these matters are to be excluded, the Bill will become more precarious than ever. What we are seeking to do, and what I think the President is seeking to do, is to take steps which will protect the public interest, and this is an exception from that, a step which is against the public interest if it is allowed to occur. I ask the right hon. Gentleman to reconsider the matter on that basis.
§ The Parliamentary Secretary to the Board of Trade (Mr. Derek Walker-Smith)
The hon. Member for Islington, East (Mr. E. Fletcher) was good enough to say that the Amendment was in the nature of a probing one. The Committee will be appreciative of the contribution which he has made in seeking to clarify what is admittedly a difficult part of the Bill and is connected with a very difficult branch of the law, that in respect of patents.
The hon. Member observed that patents had always been specially treated in our law and were in a privileged position. That is, in substance, true, but the Committee will, of course, have in mind that there is a reason for the treatment of patents in this way. The purpose of our patent system is notably, among other things, by granting exclusive rights for an invention, to stimulate technical progress by encouraging research and invention and to induce inventors to disclose their discoveries instead of keeping them as trade secrets, which they otherwise 221 might do. So it is right to say that the holders of patents are in receipt of a statutory monopoly in return for making available to the public the results of their inventive ingenuity.
We have these two basic characteristics of our patents system. First, this making available by the inventor of the results of his ingenuity and, secondly, the system of statutory control and safeguards against abuses which is contained in our patent law. That supplies the answer to the first question which the hon. Member for Islington, East was good enough to put. That is why the field of patents should be excluded from the requirements of registration in the Bill. The short answer is, as I have already indicated, that patents are dealt with by an independent code and there are already sufficient safeguards in the Patents Act, 1949.
§ Mr. E. Fletcher
I appreciate the fact that the inventor is under an obligation to disclose the nature of an invention, but there is no obligation to disclose the nature of the agreement into which he enters with the licensees. We are asking that those agreements should also be disclosed.
§ Mr. Walker-Smith
The effect of the Amendment would be rather more than disclosure of such agreements. It would be to bring agreements relating only to patented goods within the purview of the Restrictive Practices Court. I was about to say that there is already provision in the Patents Act to safeguard the position of the public in these matters. To superimpose upon that a duality of control by making them also liable to registration and investigation by the Restrictive Practices Court would precipitate a conflict of jurisdiction between the Restrictive Practices Court and the Comptroller of Patents.
I do not want to weary the Committee by going into the subject in any detail. If the hon. Member for Islington, East will be good enough to refer to the Patents Act, 1949, he will see the procedure for compulsory licences as of right and the grounds on which such compulsory licences are given set out in detail in Section 37 of that Act and, in particular, paragraphs (b), (d) and (e), which, when he has studied them, if he has not already done so, he will see cover this point very well. In addition, there are the provisions of Section 40, which relate directly to the 222 recommendations of the Monopolies Commission and the provisions of Section 50 with regard to the avoidance of certain restrictive conditions. I hope that the Committee will, therefore, be satisfied on the general point that there is a full comprehensive code which does not require addition.
The hon. Member for Huddersfield, West (Mr. Wade) referred to an all-embracing provision. I cannot altogether resist the conclusion that it would be so all-embracing as to give the kiss of death to the whole thing, because of the awkwardness of this conflict of jurisdiction. On the specific point he raised, I have been long enough in the legal profession to be extremely wary of opinions "off the cuff," especially as I have never practised in this esoteric field, and I am conscious that I am speaking in the presence of my right hon. and learned Friend the Member for Chertsey (Sir L. Heald), who is the country's leading expert on patent law.
My impression is that neither of the agreements suggested by the hon. Member for Huddersfield, West would, in fact, come within the exception of the Clause, because he is taking the Clause too widely. I do not think that the agreements would fit the definition of subsection (3) and clearly, the second one would be outwith the wording of the Clause, because there the restrictions would clearly not fit into the word "imposes" insuch restrictions…except in respect of the patented articlebecause, on his own example the restrictions would go to the machine as well as to the device.
However, so that we need not take too long over these interesting examples, I will say to the hon. Member for Huddersfield, West that I will certainly check that "off the cuff" opinion, and if I am not right, I can correct it on Report. I will give full consideration to what he and other hon. Members have said. I hope that with that clarification we may be able to part with the Amendment.
§ 4.15 p.m.
§ Mr. Douglas Jay (Battersea, North)
I should like to ask two questions. We who are non-lawyers approach this matter with great diffidence, especially in the presence of the right hon. and learned Member for Chertsey (Sir L. Heald). Is 223 the Parliamentary Secretary quite sure that he has answered the question asked by the hon. Member for Huddersfield, West (Mr. Wade)? What he and others of us are anxious about is simply whether there is a loophole where an agreement which related to a patented article might not at the same time be a restrictive agreement affecting the price, or something of that kind, which would not, as I understand, normally be part of the patent arrangement and which ought, therefore, to come within the Bill.
Looking at the words of the subsection from a commonsense point of view, if I may put it that way, they do say:…agreement which imposes no such restrictions aforesaid except in respect of the patented article.I should have thought that agreement about the price of the patented article would have been a restriction in respect of the patented article. Will the Parliamentary Secretary make sure about that and tell us beyond ambiguity that he does not wish to permit a loophole of that kind and that if, between now and Report, he discovers that a loophole is there, he will take steps to remove it?
Supposing there were an agreement between persons, or within an association about the terms on which patent licences would be granted, would such an agreement be registrable under the Bill as it now stands? We ought to know that, because there might be an agreement beyond the ordinary normal patent arrangement—I think that my hon. Friend the Member for Islington, East (Mr. E. Fletcher) put this point—on the terms on which the patent licence would be granted: We ought to know whether that comes within the terms of the subsection.
§ Mr. Walker-Smith
If the licensee accepts a restriction as to price, which he will ordinarily do in the grant of the licence to him, and if the patentee accepts a mutual restriction—and there has to be mutual restriction before the matter comes 'within the ambit of the Bill at all—in respect of the price of the patented goods, then these come within the exemption of the Clause. Those are the conditions relating to the patented goods, and those are the matters in respect of which we are satisfied that the normal 224 safeguards of our code of patented law are sufficient protection for the public.
I want to make it clear that once the parties go outside the field of the patented goods and include in their agreements restriction of non-patented goods, the exemption does not apply and the agreement is caught by Clause 5.
§ Mr. Walker-Smith
The decision as to whether an agreement is registrable or not would be dealt with in the same way as any other case of doubt in respect of the registration of an agreement. The first thing for any person in doubt to do is to inquire of the Registrar what his view is as to the registrability of the agreement. There is then, as the hon. Gentleman is aware, provision in the Bill for the adjudication by the High Court of questions of construction as to whether particular agreements come within or without the ambit of the Bill.
§ Mr. Cyril Bence (Dunbartonshire, East)
I am sorry to intervene in this debate, but I have had a lot of experience of patented products in the machine tool and engineering industry in general. I do not like to intervene in a debate centring on legal interpretations, because, though I can follow the phraseology of mathematics and engineering, I find it very difficult to follow the phraseology of the law.
My experience goes back over 30 years. I do not want to mention any particular machines or patents, but the common experience in the British engineering industry. An inventor comes along with an invention which he submits to a machine tool manufacturer. This is not an isolated case. He may submit it to a big mass producer of machine tools, such as milling machines, radio drillers, grinding machines, universal grinders, vertical grinders, cap grinders and all sorts of machine tools.
The manufacturer has a look at the invention and decides that it is a good job. He may decide that either he or someone else is prepared to manufacture it, but, in the manufacture of that article, the device will perhaps be slightly altered in regard to the means by which it is attached to the 225 principal machine, so that it can only be attached to a certain specific machine tool. I have myself actually known cases of very clever inventions adaptable to machine tools, but which, when we came to the process of manufacture, we found could only be used by somebody who already possessed that particular manufacturer's own machine tool.
Whether the patent law covers this situation completely I do not know, but I well remember, before the war, a very clever device being produced. When one bought it, one found that though one had a hundred machine tools of a particular company, American or British, the device was no use unless one had the machine tool of one particular manufacturer, because that patent had been harnessed to that particular machine. I remember another time when a very clever device was invented which could be attached only to one particular product, except by people in the engineering industry with workshops of their own, who could make a new part and adapt the device themselves, which some of us used to do.
Do I understand that, if this Clause is passed, this sort of arrangement which exists in the mechanical engineering industry will be allowed, without any examination at all and without anyone breaking any law? I am surprised that the President of the Board of Trade, who was so interested in the liberalisation of trade and the removal of restrictions generally, and who wishes to step up and enlarge inventiveness and production, should stand by and see these practices carried out, since clearly the patent law never checked them in the past.
§ Sir Lionel Heald (Chertsey)
I hesitate to delay the Committee, and I certainly do not intend to go outside the Rules of Order in this discussion. But I think that [the hon. Member for Dunbartonshire, East (Mr. Bence) ought to be reminded that there was a very important committee called the Swan Committee, which considered the whole of these matters and asked for evidence to be brought before it of particular abuses of patents. This was one of the specific matters dealt with, and that Committee made certain recommendations, upon the basis of which the 1949 Patents and Designs Act was enacted.
226 That Bill was discussed here and in another place, and all these matters were canvassed, so that it would be wrong for it to go out from this Committee that there are abuses of that kind which are not being covered by the present Act. Certainly, as recently as 1949, following the Report of that very competent Committee, Parliament considered the matter, and a Government of exceptional ability and sagacity also considered it. Therefore, I do not think that we should assume that these matters have not been dealt with.
§ Mr. Robert Edwards (Bilston)
To challenge the patent law is a very expensive business. I recollect that one particular firm was almost driven into bankruptcy when costs of £75,000 were awarded against it when claiming the right to use a particular patent, which was registered by a British firm, but not used. It cost that firm all that money in litigation to challenge through the law the right to manufacture a compound patented, but not produced, by another firm, which is the very issue here. Therefore, this point should not be overlooked. If we are serious about dealing with restrictive practices and the dangers of monopoly, then we should not miss opportunities of strengthening this Bill to prevent the misuse of the patent law, exclusive control of new technical methods of production and ideas by the use of such methods to keep prices higher than they should be.
It is well known that twice over the last 35 years an everlasting match has been invented. When the first one was produced, it was bought up by the match cartel and never produced again. Another one was later invented and was patented all over the world, but, again, it was bought up by the match cartel and never even put into production. It was patented to prevent its production, and it was within the law, but if any company had wanted to produce that everlasting match, they could have gone to the courts, through the law governing patents, but it would have cost them £1 million or more. It is because of difficulties of this nature that I think that this Amendment should be given serious consideration.
For example, I have here a typical example of how the patent laws are abused. Here is the carton of a three-way plug, which is patented by an 227 exclusive monopoly. This is what is printed on the carton:This plug is sold under limited licences. One or more of the following patents have been taken out. Other British and foreign patents are pending.Then the conditions of sale are given. Listen to this, which is a deliberate abuse of the patent law:The D.5 fused plug contained in this carton is covered by one or more of the above Letters Patent, and is sold under the following express condition; that it shall not be resold or offered for sale, new or second-hand, used or partly used, at lower than the list price published in the D.5 plug current official list.That means that, though it is my property, I could not sell this plug, which I bought at the exorbitant price of 12s. 6d., for 1s. after I have used it, because there is a threat at the end of this printed matter, which says:No allowances, bonuses, gifts or other considerations of any kind, except as allowed by the British Electrical and Allied Manufacturers' Association's fair trading policy, shall be made or given by the seller or accepted by the purchaser.What does that mean? These people are using this patent so that they may lay down the conditions of sale.
The conditions specify, for example, that this plug cannot be purchased in any co-operative society for sale to its members because by abusing the patent laws these conditions of sale are laid down. This is not a case of the protection of the inventor, but of the exploitation of the ideas of the inventor by a monopoly, by the financiers. Indeed, there are very few inventors today—the old backroom artisans—who gain from their ideas. These ideas are bought out and are exploited by monopoly organisations of the nature I have mentioned.
I purchased this plug only last week. The carton carries this printed conclusion:Any breach of the above conditions by any persons dealing with this article will render such persons liable to an action for infringement of the letters patent.That means that if a co-operative society manager or a little girl in a cooperative shop gets hold of one of these articles by some means or other and sells it at 2d. or 3d. below the fixed price, or includes it for dividend payment, according to this threat, which is surely illegal, action can be taken.
228 This is one characteristic example of many thousands that could be quoted of how the patent laws are being deliberately abused. Agreements that have nothing to do with the inventor or with protecting the man who invented an article are used as part of the patent laws to exploit the consumer and to lay down conditions of sale which should come within the registration contemplated by the Bill if we really mean business.
For these reasons, I hope that if the President of the Board of Trade cannot accept the Amendment he will consider a new form of wording for the Clause that will cover deliberate, calculated abuses of this nature of the patent laws.
§ Mr. Turner-Samuels
There is one question I should like to put to the Parliamentary Secretary. He mentioned the Patent Acts and he led—I am sure he did not intend to mislead—the Committee to believe that the provisions in the Patent Acts were sufficiently embracing and comprehensive to avoid the mischief which the Bill aims at.
I should, therefore, like to put this specific question to the hon. and learned Gentleman. Where, in any of the Patent Acts, is there provision against restriction as to prices and conditions of price fixing?
§ Mr. Walker-Smith
Perhaps the hon. and learned Member would be good enough to look at the provisions of Section 37 (1, e) of the Patents Act; then, perhaps he can tell me whether he thinks it is covered.
§ Mr. E. Fletcher
I listened very carefully to what the Parliamentary Secretary said, but in view of the speeches which have been made in this debate I cannot regard his answer as at all satisfactory. We have had no assurance whatever about agreements that may be made against any manufacturer and we have had no assurance whatever on the question of agreements which may be made with regard to patented articles containing restrictive agreements, which may well be permitted under the patent laws as they stand but certainly would not be permitted if they applied to non-patented articles.
Since such restrictive agreements might apply to articles partly covered by patents 229 and partly not covered by patents, it seems to me to be most dangerous to leave subsection (3) in the Bill and to exclude agreements from the requirement of registration merely because they are subject to patent law. I hope that my hon. Friends will register their protest in
§ this matter by dividing in support of my Amendment.
§ Question put, That the words proposed to be left out, to the second word "any" in line 2, stand part of the Clause:—
§ The Committee divided: Ayes 263, Noes 222.233
|Division No. 158.]||AYES||[4.35 p.m.|
|Agnew, Cmdr. P. G.||Fletcher-Cooke, C.||Leavey, J. A.|
|Aitken, W. T.||Fort, R.||Lindsay, Hon. James (Devon, N.)|
|Allan, R. A. (Paddington, S.)||Foster, John||Lindsay, Martin (Solihull)|
|Alport, C. J. M.||Fraser, Hon. Hugh (Stone)||Linstead, Sir H. N,|
|Amery, Julian (Preston, N-)||Freeth, D. K.||Llewellyn, D. T.|
|Arbuthnot, John||Galbraith, Hon. T. G. D.||Lloyd, Maj. Sir Guy (Renfrew, E.)|
|Armstrong, C. W.||Gammans, Sir David||Lloyd, Rt. Hon. Selwyn (Wirral)|
|Ashton, H.||Garner-Evans, E. H.||Longden, Gilbert|
|Baldock, Lt.-Cmdr. J. M.||George, J. C. (Pollok)||Low, Rt. Hon. A. R. W.|
|Baldwin, A. E.||Gibson-Watt, D.||Lucas, Sir Jocelyn (Portsmouth, S.)|
|Barlow, Sir John||Glover, D.||Lucas, P. B. (Brentford & Chiswick)|
|Barter, John||Godber, J. B.||Lucas-Tooth, Sir Hugh|
|Beamish, Maj. Tufton||Gomme-Duncan, Col. Sir Alan||McAdden, S. J.|
|Bell, Philip (Bolton, E.)||Gower, H. R.||Macdonald, Sir Peter|
|Bell, Ronald (Bucks, S.)||Graham, Sir Fergus||McKibbin, A. J.|
|Bennett, F. M. (Torquay)||Grant, W. (Woodside)||Mackie, J. H. (Galloway)|
|Bevins, J. R. (Toxteth)||Grant-Ferris, Wg Cdr. R. (Nantwich)||McLaughlin, Mrs. P.|
|Bidgood, J. C.||Green, A.||Maclay, Rt. Hon. John|
|Biggs-Davison, J. A.||Gresham Cooke, R.||Maclean, Fitzroy (Lancaster)|
|Birch, Rt. Hon. Nigel||Grimston, Hon. John (St. Albans)||Macleod, Rt. Hn. Iain (Enfield, W.)|
|Bishop, F. P.||Grimston, Sir Robert (Westbury)||MacLeod, John (Ross & Cromarty)|
|Body, R. F.||Grosvenor, Lt.-Col. R. G.||Macmillan, Rt. Hn. Harold (Bromley)|
|Bossom, Sir A. C.||Gurden, Harold||Maddan, Martin|
|Boyd-Carpenter, Rt. Hon. J. A,||Hall, John (Wycombe)||Maitland, Cdr. J. F. W. (Horncastle)|
|Boyle, Sir Edward||Harris, Frederic (Croydon, N.W.)||Manningham-Buller, Rt. Hn. Sir R.|
|Braine, B. R.||Harris, Reader (Heston)||Markham, Major Sir Frank|
|Braithwaite, Sir Albert (Harrow, W.)||Harrison, A. B. C. (Maldon)||Marlowe, A. A. H.|
|Bromley-Davenport, Lt.-Col. W. H.||Harrison, Col. J. H. (Eye)||Marples, A. E.|
|Brooke, Rt. Hon. Henry||Harvey, John (Walthamstow, E.)||Marshall, Douglas|
|Browne, J. Nixon (Craigton)||Hay, John||Mathew, R.|
|Buchan-Hepburn, Rt. Hon. P. G. T.||Maudling, Rt. Hon. R.|
|Bullus, Wing Commander E. E.||Heald, Rt. Hon. Sir Lionel||Mawby, R. L.|
|Burden, F. F. A.||Heath, Rt. Hon. E. R. G.||Maydon, Lt.-Comdr, S. L. C.|
|Butler, Rt. Hn. R. A. (Saffron Walden)||Henderson, John (Cathcart)||Medlicott, Sir Frank|
|Campbell, Sir David||Hicks-Beach, Maj. W. W.||Milligan, Rt. Hon. W. R.|
|Carr, Robert||Hill, Rt. Hon. Charles (Luton)||Monckton, Rt. Hon. Sir Walter|
|Cary, Sir Robert||Hill, Mrs. E. (Wythenshawe)||Moore, Sir Thomas|
|Chichester-Clark, R.||Hill, John (S. Norfolk)||Morrison, John (Salisbury)|
|Clarke, Brig, Terence (Portsmth, W.)||Hinchingbrooke, Viscount||Mott-Radclyffe, C. E.|
|Cole, Norman||Hirst, Geoffrey||Nabarro, G. D. N.|
|Cooper, Sqn. Ldr. Albert||Holland-Martin, C. J.||Nairn, D. L. S.|
|Cooper-Key, E. M.||Hope, Lord John||Neave, Airey|
|Cordeaux, Lt.-Col. J. K.||Horobin, Sir Ian||Nicholson, Godfrey (Farnham)|
|Corfield, Capt. F. V.||Horsbrugh, Rt. Hon. Dame Florence||Nicolson, N. (B'n'm'th, E. & Chr'sh)|
|Craddock, Beresford (Spelthorne)||Howard, John (Test)||Nield, Basil (Chester)|
|Crosthwaite-Eyre, Col. O. E.||Hudson, Sir Austin (Lewisham, N,)||Nutting, Rt. Hon. Anthony|
|Crouch, R. F.||Hudson, W. R. A, (Hull, N.)||Oakshott, H. D.|
|Crowder, Sir John (Finchley)||Hughes Hallett, Vice-Admiral J.||O'Neill, Hn. Phelim (Co. Antrim, N.)|
|Cunningham, Knox||Hughes-Young, M. H. C.||Ormsby-Core, Hon. W. D.|
|Currie, G. B. H.||Hurd, A. R.||Orr, Capt. L. P. S.|
|Dance, J. C. C.||Hutchison, Sir Ian Clark (E'b'gh, W.)||Orr-Ewing, Charles Ian (Hendon, N.)|
|D'Avigdor-Goldsmid, Sir Henry||Hutchison, Sir James (Scotstoun)||Osborne, C.|
|Deedes, W. F.||Hyde, Montgomery||Page, R. G.|
|Donaldson, Cmdr. C. E. McA.||Iremonger, T. L.||Pannell, N. A. (Kirkdale)|
|Doughty, C. J. A.||Irvine, Bryant Godman (Rye)||Partridge, E.|
|Drayson, G. B.||Jenkins, Robert (Dulwich)||Pickthorn, K. W. M.|
|du Cann, E. D. L.||Johnson, Dr. Donald (Carlisle)||Pilkington, Capt. R. A.|
|Dugdale, Rt. Hn. Sir T. (Richmond)||Johnson, Eric (Blackley)||Pitman, I. J.|
|Duncan, Capt. J. A. L.||Johnson, Howard (Kemptown)||Pitt, Miss E. M.|
|Duthie, W. S.||Jones, Rt. Hon. Aubrey (Hall Green)||Powell, J. Enoch|
|Eccles, Rt. Hon. Sir David||Joseph, Sir Keith||Prior-Palmer, Brig. O. L.|
|Eden, Rt. Hn. Sir A. (Warwick & L'm'tn)||Joynson-Hicks, Hon. Sir Lancelot||Profumo, J. D.|
|Eden, J. B. (Bournemouth, West)||Keegan, D.||Raikes, Sir Victor|
|Elliot, Rt. Hon. W. E.||Kerby, Capt. H. B.||Ramsden, J. E.|
|Emmet, Hon. Mrs. Evelyn||Kerr, H. W.||Rawlinson, Peter|
|Errington, Sir Eric||Kimball, M.||Redmayne, M.|
|Farey-Jones, F. W.||Kirk, P. M.||Rees-Davies, W. R.|
|Fell, A.||Lagden, G. W.||Remnant, Hon. P.|
|Finlay, Graeme||Lambton, Viscount||Renton, D. L. M.|
|Fisher, Nigel||Lancaster, Col. C. G.||Ridsdale, J. E.|
|Fleetwood-Hesketh, R. F.||Leather, E. H. C.||Robertson, Sir David|
|Robinson, Sir Roland (Blackpool, S.)||Stoddart-Scott, Col. M.||Wakefield, Sir Wavell (St. M'lebone)|
|Robson-Brown, W.||Studholme, H. G.||Walker-Smith, D. C.|
|Rodgers, John (Sevenoaks)||Summers, G. S. (Aylesbury)||Wall, Major Patrick|
|Roper, Sir Harold||Taylor, William (Bradford, N.)||Ward, Hon. George (Worcester)|
|Ropner, Col. Sir Leonard||Teeling, W.||Ward, Dame Irene (Tynemouth)|
|Russell, R. S.||Thomas, Leslie (Canterbury)||Waterhouse, Capt. Rt. Hon. C.|
|Schofield, Lt.-Col. W.||Thompson, Kenneth (Walton)||Watkinson, Rt. Hon. Harold|
|Sharpies, R. C.||Thompson, Lt.-Cdr. R. (Croydon, S.)||Webbe, Sir H.|
|Shepherd, William||Thorneycroft, Rt. Hon. P.||Whitelaw, W.S.I.(Penrith & Border)|
|Simon, J. E. S. (Middlesbrough, W.)||Thornton-Kemsley, C. N.||Williams, Paul (Sunderland, S.)|
|Smithers, Peter (Winchester)||Tiley, A. (Bradford, W.)||Wills, G. (Bridgwater)|
|Soames, Capt. C.||Touche, Sir Gordon||Wilson, Geoffrey (Truro)|
|Spearman, A, C. M.||Turton, Rt. Hon. R. H.||Wood, Hon. R.|
|Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)||Tweedsmuir, Lady||Woollam, John Victor|
|Stanley, Capt. Hon. Richard||Vane, W. M. F.||Yates, William (The Wrekin)|
|Stevens, Geoffrey||Vaughan-Morgan, J. K.|
|Steward, Harold (Stockport, S.)||Vosper, D. F.||TELLERS FOR THE AYES:|
|Stewart, Henderson (Fife, E.)||Wakefield, Edward (Derbyshire, W.)||Mr. Legh and Mr. Bryan.|
|Ainsley, J. W.||Fienburgh, W.||MacPherson, Malcolm (Stirling)|
|Albu, A. H.||Fletcher, Eric||Mahon, Simon|
|Allaun, Frank (Salford, E.)||Forman, J. C.||Mallalieu, J. P. W. (Huddersfd, E.)|
|Allen, Arthur (Bosworth)||Fraser, Thomas (Hamilton)||Marquand, Rt. Hon. H. A.|
|Allen, Scholefield (Crewe)||Gaitskell, Rt. Hon. H. T. N.||Mason, Roy|
|Anderson, Frank||Gibson, C. W.||Mellish, R. J.|
|Awbery, S. S.||Gooch, E. G.||Mitchison, G. R.|
|Bacon, Miss Alice||Gordon Walker, Rt. Hon. P. C.||Monslow, W.|
|Bellenger, Rt. Hon. F. J.||Greenwood, Anthony||Moody, A. S.|
|Bence, C. R. (Dunbartonshire, E.)||Grenfell, Rt. Hon. D. R.||Morris, Percy (Swansea, W.)|
|Benson, G.||Grey, C. F.||Morrison, Rt. Hn. Herbert (Lewis'm, S.)|
|Beswick, F.||Griffiths, David (Rother Valley)||Mort, D. L.|
|Bevan, Rt. Hon. A. (Ebbw Vale)||Griffiths, Rt. Hon. James (Llanelly)||Moss, R.|
|Blackburn, F.||Griffiths, William (Exchange)||Moyle, A.|
|Blenkinsop, A.||Hale, Leslie||Mulley, F. W.|
|Blyton, W. R.||Hamilton, W. W.||Neal, Harold (Bolsover)|
|Boardman, H.||Hannan, W.||Oliver, G. H.|
|Bottomley, Rt. Hon. A. G.||Harrison, J. (Nottingham, N.)||Oram, A. E.|
|Bowden, H. W. (Leicester, S.W.)||Hastings, S.||Orbach, M.|
|Bowen, E. R. (Cardigan)||Hayman, F. H.||Oswald, T.|
|Bowles, F. G.||Healey, Denis||Owen, W. J.|
|Boyd, T. C.||Henderson, Rt. Hn. A. (Rwly Regis)||Paling, Rt. Hon. W. (Dearne Valley)|
|Braddock, Mrs. Elizabeth||Herbison, Miss M.||Paling, Will T. (Dewsbury)|
|Brookway, A. F.||Hobson, C. R.||Palmer, A. M. F.|
|Broughton, Dr. A. D. D.||Holmes, Horace||Pargiter, G. A.|
|Brown, Rt. Hon. George (Belper)||Holt, A. F.||Parker, J.|
|Brown, Thomas (Ince)||Houghton, Douglas||Parkin, B. T.|
|Burton, Miss F. E.||Howell, Denis (All Saints)||Paton, J.|
|Butler, Herbert (Hackney, C.)||Hubbard, T. F.||Pearson, A.|
|Butler, Mrs. Joyce (Wood Green)||Peart, T. F.|
|Callaghan, L. J.||Hughes, Cledwyn (Anglesey)||Plummer, Sir Leslie|
|Castle, Mrs. B. A.||Hughes, Emrys (S. Ayrshire)||Popplewell, E.|
|Champion, A. J.||Hunter, A. E.||Price, J. T. (Westhoughton)|
|Chapman, W. D.||Irvine, A. J. (Edge Hill)||Price, Philips (Gloucestershire, W.)|
|Chetwynd, G. R.||Irving, S. (Dartford)||Probert, A. R.|
|Clunie, J.||Isaacs, Rt. Hon. G. A.||Pryde, D. J.|
|Coldrick, W.||Jay, Rt. Hon. D. P. T.||Randall, H. E.|
|Collick, P. H. (Birkenhead)||Jeger, George (Goole)||Rankin, John|
|Collins, V. J. (Shoreditch & Finsbury)||Jeger, Mrs. Lena (Holbn & St. Pncs, S.)||Redhead, E. C.|
|Cove, W. G.||Jenkins, Roy (Stechford)||Reeves, J.|
|Craddock, George (Bradford, S.)||Johnson, James (Rugby)||Reid, William|
|Cronin, J. D.||Jones, Rt. Hon. A. Creech (Wakefield)||Robens, Rt. Hon. A.|
|Crossman, R. H. S.||Jones, David (The Hartlepools)||Roberts, Albert (Normanton)|
|Cullen, Mrs. A.||Jones, Elwyn (W. Ham, S.)||Roberts, Goronwy (Caernarvon)|
|Daines, P.||Jones, Jack (Rotherham)||Robinson, Kenneth (St. Pancras, N.)|
|Darling, George (Hillsborough)||Jones, J. Idwal (Wrexham)||Ross, William|
|Davies, Rt. Hon. Clement (Montgomery)||Jones, T. W. (Merioneth)||Royle, C.|
|Davies, Ernest (Enfield, E.)||Key, Rt. Hon. C. W.||Shinwell, Rt. Hon. E.|
|Davies, Harold (Leek)||King, Dr. H. M.||Short, E. W.|
|Davies, Stephen (Merthyr)||Lawson, G. M.||Shurmer, P. L. E.|
|de Freitas, Geoffrey||Ledger, R. J.||Simmons, C. J. (Brierley Hill)|
|Delargy, H. J.||Lee, Frederick (Newton)||Skeffington, A. M.|
|Dodds, N. N.||Lee, Miss Jennie (Cannock)||Slater, Mrs. H. (Stoke, N.)|
|Donnelly, D. L.||Lever, Leslie (Ardwick)||Slater, J. (Sedgefield)|
|Dugdale, Rt. Hn. John (W. Brmwch)||Lewis, Arthur||Smith, Ellis (Stoke, S.)|
|Dye, S.||Lindgren, G. S.||Snow, J. W.|
|Ede, Rt. Hon. J. C.||Logan, D. G.||Sorensen, R. W.|
|Edelman, M.||Mabon, Dr. J. Dickson||Sparks, J. A.|
|Edwards, Rt. Hon. John (Brighouse)||MacColl, J. E.||Steele, T.|
|Edwards, Rt. Hon. Ness (Caerphilly)||McGhee, H. G.||Stewart, Michael (Fulham)|
|Edwards, Robert (Bilston)||McInnes, J.||Stones, W. (Consett)|
|Edwards, W. J. (Stepney)||McKay, John (Wallsend)||Stross, Dr. Barnett (Stoke-on-Trent, C.)|
|Evans, Albert (Islington, S.W.)||McLeavy, Frank||Summerskill, Rt. Hon. E.|
|Evans, Stanley (Wednesbury)||MacMillan, M. K. (Western Isles)||Swingler, S. T.|
|Sylvester, C. O.||Viant, S. P.||Williams, W. R. (Openshaw)|
|Taylor, Bernard, (Mansfield)||Warbey, W. N.||Willis, Eustace (Edinburgh, E.)|
|Taylor, John (West Lothian)||Watkins, T. E.||Wilson, Rt. Hon. Harold (Huyton)|
|Thomas, George (Cardiff)||Weitzman, D.||Winterbottom, Richard|
|Thomas, Iorwerth (Rhondda, W.)||Wells, Percy (Faversham)||Woodburn, Rt. Hon. A.|
|Thornton, E.||West, D. G.||Woof, R. E.|
|Timmons, J.||White, Mrs. Eirene (E. Flint)||Yates, V. (Ladywood)|
|Tomney, F.||White, Henry (Derbyshire, N.E.)||Younger, Rt. Hon. K.|
|Turner-Samuels, M.||Wilkins, W. A.||Zilliacus, K.|
|Ungoed-Thomas, Sir Lynn||Willey, Frederick|
|Usborne, H. C.||Williams, Rev. Llywelyn (Ab'tillery)||TELLERS FOR THE NOES:|
|Mr. Rogers and Mr. Deer.|
Question put and agreed to.
§ Mr. Walker-Smith
I beg to move, in page 6, line 2, after "patent", to insert "or registered design".
I suggest to the Committee that it would be convenient to take with this Amendment the next two Government Amendments, to lines 3 and 6.
We have had a full debate on the subject of the treatment of patents in the Bill. The point of these Amendments is to put registered designs into the same case as patents, that is to say, that an agreement should be excluded from Part I of the Bill where restrictions are imposed only in respect of articles to which the design applies. There may be a difference of opinion in the Committee as to whether or not patents should be treated in this way but there should be, I hope, no difference that if that is the right way to deal with patents then registered designs should fall within the same treatment. Safeguards exist against agreements which have the effect of unduly restricting the use of design. Section 10 of the Registered Designs Act, 1949, provides for the granting of compulsory licences by the Registrar in appropriate circumstances.
I might add for the reassurance of hon. Members opposite that, in practice, the field of restriction here will be very small, first, because design is not "goods" within the definition of Clause 30 and, consequently, restrictions in respect of mere use of design would not in any event, quite apart from the Amendments, prima facie be affected by Part I. Industrial designs are usually registered by manufacturers and they would, in practice, rarely grant licences to other manufacturers to use the same design, but where such agreements exist it is right that they should be dealt with in principle on the same basis as patents.
§ Amendment agreed to.
§ Further Amendments made: In page 6, line 3, after "patent" insert "or registered design".234
In line 6, at end insert:
or in respect of articles to which the registered design is applied, as the case may be".—[Mr. Walker-Smith.]
§ The President of the Board of Trade (Mr. Peter Thorneycroft)
I beg to move, in page 6, line 6, at the end to insert:(4) This Part of this Act does not apply to an agreement in the case of which all such restrictions as are described in subsection (1) of section five of this Act relate exclusively—This really raises no new point of principle. It is, in effect, a redrafting and clarification of what was originally in the Bill, but I think that it will be convenient if I explain what we are doing and what the Amendment is intended to achieve. First, it simplifies the wording of subsection (4). Secondly, and this is rather more important, it eliminates certain deficiencies in the drafting which, for example, excluded certain export agreements from the Bill altogether.
- (a) to the supply of goods by export from the United Kingdom;
- (b) to the production of goods, or the application of any process of manufacture to goods, outside the United Kingdom;
- (c) to the acquisition of goods to be delivered outside the United Kingdom and not imported into the United Kingdom for entry for home use; or
- (d) to the supply of goods to be delivered outside the United Kingdom otherwise than by export from the United Kingdom.
It excluded them through the rather unfortunate use of the words,…no account shall be taken of…By the use of those words an export agreement linked with an overseas agreement was outside the Bill altogether, including Clause 25. That was not our intention, but we can debate the merits of Clause 25 when we come to it.
The first thing that the Amendment does is to exclude from registration under Part 1 agreements relating exclusively to exports. Secondly, it excludes from registration altogether goods bought, sold or delivered outside the United Kingdom. That latter category of overseas trade was outside the old Monopolies Bill, and it is outside this Bill. It is outside because, 235 in the main, it raises issues of external commercial policy and, incidentally, would raise the most formidable difficulties in the face of any court or tribunal, because it would be very difficult to get information on the factors that it would be considering, which would be often matters affecting the interests of Commonwealth Governments or Colonial Governments and the like. So we followed the same principle as was followed in the original Monopolies Bill and left it right out.
The first class—that is agreements relating exclusively to export—are caught up again when we get to Clause 25, but I am not proposing that we should discuss that at this stage.
§ Mr. Wade
May I ask for your guidance, Mr. Hynd. There is an Amendment on the Order Paper which was put down in the name of my hon. Friends and myself which would have amended or have sought to amend subsection (4) in its original form. I assume that Amendment will now fall, because I cannot move the Amendment to Clause 4 in its original form if the Amendment now put forward by the Minister is carried.
§ The Temporary Chairman (Mr. H. Hynd)
That would be the effect, and I think it would be advisable in that case to discuss that Amendment with this one.
§ Mr. Wade
I wish to raise only one aspect of this problem. I quite understand the special circumstances of exporters and those dealing in goods for export. I am, however, concerned about the effect on our reputation where there are level tenders. I should be glad to know whether the Minister can give us any assurance on this point. It appears to me that the consequence of the proposed subsection (4, a) is that the agreement between manufacturers making goods for export whereby they quote the same price will be excluded from the provisions of Part I. The effect on our reputation could be very serious.
I think that the best example that I can quote—and one which is known to many hon. Members—is that of the contract which was lost when level tenders were quoted for the Snowy Mountains Hydro-Electric Power Authority. It was reported in a number of newspapers, but 236 I am quoting from my own local newspaper, the Huddersfield Examiner, of 20th March:A senior official of the Snowy Mountains Hydro-Electric Power Authority said today that British heavy electrical equipment firms lost a big contract last year because they offered virtually identical tenders. The contract worth £(A)750,000 (£600,000), was awarded to a Belgian firm. The official said,…Normally in these circumstances we would have accepted the British tender because it is our policy to buy British. However, because of the practice of level tenders, it was decided to give the contract to the Belgian firm.' The Authority's annual report said,…During recent years this practice…has become common among British manufacturers of heavy electrical equipment.I am concerned to ascertain whether this practice of quoting even prices will in any way be caught by the provisions of Part 1. It would appear to me that any goods that are made for export will be outside these provisions and that therefore agreements to a common price list which quote identical prices will not be registrable under Part 1.
§ The Temporary Chairman
The hon. Member will notice that his next Amendment falls under the same classification. I should therefore tell him that it will not be called separately, so he may care to say something about that on this Amendment. The Amendment in the name of the hon. Member for Scotstoun and other hon. Members—in page 6, line 23, at end add:(5) Where an agreement relates to the delivery of goods partly outside the United Kingdom and partly within the United Kingdom the parties thereto may apply to the Board of Trade that no account should be taken of any restriction imposed by the agreement and in the event of the application being granted section twenty-five of this Act shall apply to the agreement.(6) If an application under the last subsection is refused by the Board of Trade the parties to the agreement may appeal to the High Court against the Board's refusal and the decision of the court shall be final.—will not be called separately, and if the hon. Member cares to discuss it with this Amendment, he will be in order in doing so.
§ Sir Lancelot Joynson - Hicks (Chichester)
In view of what you have said, Mr. Hynd, I should like to refer 237 to the Amendment in the name of my hon. Friend and myself in page 6, line 23, and to express the view that we hold, which is that the point contained in our Amendment has been admirably and handsomely met by the President of the Board in his Amendment. We should therefore like to express our appreciation to him, and to say that we would not move our Amendment, even if we were permitted to do so.
§ Mr. P. Thorneycroft
I am much obliged to my hon. Friend for what he has said. With regard to the point raised about agreements on level tendering, if manufacturers or suppliers in this country enter into mutual restrictive arrangements as to supplies overseas, that would be within the compass of the Bill. I am referring to the Bill as a whole in the broad sense and not necessarily to Part 1.
Under the Bill as drafted, if it was exclusively related to exports, as this might be, then it would be drawn in under Clause 25. I am not proposing that we should debate that Clause at this stage, but that is where it is brought in. If it were a mixed agreement—I do not know whether this one was; one could conceive of circumstances where arrangements of that kind related partly to internal and partly to external trade—in that case, the whole agreement would be registrable under Part 1 of the Bill and would be dealt with in the ordinary way.
§ Sir Lynn Ungoed-Thomas (Leicester, North-East)
To be clear on this matter, I should like to put it in my own words. The effects of this is that it limits registration to production or manufacture within the United Kingdom for United Kingdom consumption or user. If it is a restriction of that nature, then it is within the Bill. Does the Bill apply even though there may also be restrictions which effect exports under the same arrangement, so that the Amendment referred to by the right hon. Gentleman really comes exclusively within the ambit of Clause 25? I hope that I have got that correct. I think that it is right, but I am not quite certain.
§ Mr. P. Thorneycroft
I said as clearly as I could that where we have an export arrangement, which is the point that we are considering, if it is inextricably linked with internal mutually restrictive arrange 238 ments which are caught by Clause 5 of the Bill, then it is registrable under Part I, as the hon. and learned Gentleman said, and would in the ordinary way come up for consideration in front of the Court. It does sometimes happen, and may quite often happen, that firms have restrictions which relate exclusively to exports, or they might elect to sever their arrangements so that the export part becomes quite separate. Where we have the export part quite separate but mutually restrictive within the general meaning of the Bill, it would not fall under this Part of the Bill but under Clause 25.
§ Amendment agreed to.
§ 5.0 p.m.
§ Sir L. Heald
I beg to move, in page 6, line 6, at the end, to insert:(4) This part of this Act does not apply to any agreement for the furnishing of unpatented information for the purpose of facilitating the manufacture of goods or the application of any process thereto which imposes no such restrictions as are described in section five of this Act except in respect of those goods or to any restrictive covenant incidental to the assignment of any business or goodwill.I move this Amendment for the purpose of obtaining certain clarifications and some assurances from my right hon. Friend as to the subject matter. This Amendment deals with what is described as "unpatented information," but it is more generally and commonly known as "know-how." One might not define know-how as being necessarily information of a secret process, or anything of that kind, but it is usually the result of intensive work and research. One company or a group of companies may, as a result of their experience, have methods which are more effective, and arrangements are made for sharing this information.
I say at once that I appreciate that the form of the Amendment is wide. It may well be that my right hon. Friend will say that while he might be prepared to consider the matter, he could not accept the Amendment. The importance of the matter is that in the case of patent agreements, as we have already found, provision already exists for the exclusion of licences from the purview of this Bill. It is common nowadays for there to be attached to those patent agreements an agreement for the exchange of know-how. Therefore, if nothing were done about it in a case where the only 239 addition to patent agreements between the two groups of companies or organisations was the provision of know-how, we would find that it came within the Bill as it stands. That is unnecessary and undesirable because the know-how in those cases is merely being used as an addendum to the patented material.
Another case has been brought to my attention, and it is an important one. It is where a group of British companies is entitled, under an agreement with a foreign company or companies, to information of this character—to unpatented information—from abroad, and those companies are often limited in the use which they can make of it. Again it is quite clear that, unless something is done about it, those companies would be liable to have their agreements torn up, and that might create a difficult situation over relations with foreign companies.
Those are two examples. I have been told of several others, but I shall not delay the Committee with them. In consideration of those matters, I ask my right hon. Friend to say that between now and the Report stage he would be willing to meet those who are familiar with these technical and complicated matters, or to allow someone on his behalf to do so, and let them explain to him these special cases. On that assumption, and on that basis, I shall certainly not ask my right hon. Friend to agree to a wholesale exclusion of know-how.
Finally, so that there may be no misunderstanding, I ought to say that it is clear, and I am sure that my right hon. Friend will confirm it, that even under the Bill as it stands a mere agreement for the sale or exchange of know-how, with nothing else except a transaction for the sale or use or letting or licensing of unpatented information, would not come within the wording of the Bill. It is only when it is combined with other matters that it does so, and that, of course, is just where the complication comes in. It is a difficult and highly complicated matter, and all that I would be entitled to ask for is that the matter should have further consideration. I know that my hon. Friends agree with me in that respect.
§ Mr. P. Thorneycroft
I thank my right hon. and learned Friend the Member for 240 Chertsey (Sir L. Heald) for the very clear and moderate way in which he has moved this Amendment, which deals with a difficult and important subject. I shall start by emphasising what he said at the end of his remarks, namely, that this Bill does not apply to know-how agreements as such. Know-how is outside the scope of this Bill, and it is worth recording that because there is a good deal of public misunderstanding on this subject.
Nevertheless, know-how agreements are often, and perhaps even generally, linked closely with a number of other arrangements. We cannot deal with them in the same way as we deal with patents or registered designs. The reason was brought out by the arguments which we all advanced when we were discussing that specific case, namely, that the patent law contains within itself provisions for the protection of the public. One might debate whether the provisions are right or sufficiently extensive, but they are there.
There is no such law relating to know-how. A patent is, so to speak, a monopoly in a certain respect, but is something which is at large. Where, it seems to me, the know-how agreement is related exclusively to patented goods it would appear that it is excluded quite safely under subsection (3) of this Clause, with which we were dealing before.
Whatever else we do, we cannot adopt a principle which would say that any price ring or exclusive dealing arrangement would be exempted from the Bill if it contained within it some know-how provisions. That would plainly be so wide as to give an obvious loophole to anyone who wanted to bring his agreement outside the purview of the Restrictive Trade Practices Court.
Nevertheless although I think the wording of the Bill is satisfactory, I appreciate that there are many complex arrangements between industry on these matters. Therefore, I shall be happy to fall in with the suggestion of my right hon. and learned Friend. If anyone has any questions or difficulties in this respect, and if they will come and consult with us at the Board of Trade between now and the Report stage, we shall be happy to listen to any representations made to us.
§ Sir L. Ungoed-Thomas
I am largely in agreement with the approach of the 241 President of the Board of Trade to this problem and with what he has said. As the right hon. and learned Member for Chertsey (Sir L. Heald) indicated, the obvious danger is that, by simply attaching know-how information to an agreement, it would be possible to drive a coach and four through the Bill. The obvious difficulty is to find any kind of wording or provision which would enable a know-how provision to be outside the Bill whilst being attached to something which is within the Bill. That is the crucial problem which the right hon. and learned Gentleman has tried to face in his Amendment and which, as he frankly indicated and as we know he would, he has not solved.
Know-how provisions of their own part, as the President of the Board of Trade said, are outside the Bill because they are on their own. The problem is the know-how provision attached to something which is within the Bill. I should have thought that this is practically an insoluble problem. It is extremely difficult because it is almost, in logic, a contradiction in terms. We agree with the approach of the President and the one thing to which we are most strongly opposed, as I am sure he would be, is any arrangement that would enable a know-how provision to provide a let-out from Clause 5.
§ Amendment, by leave, withdrawn.
§ Mr. Basil Nield (City of Chester)
I beg to move, in page 6, line 6, at the end, to insert:(4) This part of this Act does not apply to any agreement the purpose of which is to recommend the adoption of standards drawn up by the British Standards Institution.The Amendment explains in a few words its exact purpose. My submission about this is that the sort of agreement contemplated in the Amendment is one which could not possibly be found to be contrary to the public interest and, therefore, should not be subject to the requirement of registration. For many years, the British Standards Institution has been recognised by the Government, by industry and by the public as the responsible authority laying down standards, producing specifications as to the quality, 242 dimensions, performance, and other characteristics of industrial products.
I have seen it said that the Institution proceeds upon two basic principles, first, that the standards shall be in accordance with the needs of industry and fulfil a generally recognised want, and, secondly, that the interests of both producer and consumer shall be considered. I imagine that both sides of the Committee would agree that it is highly salutary, when one realises the immense importance of quality, that people should be permitted and encouraged to agree together that there should be at any rate that minimum standard which is laid down by the Institution. For these reasons, I very much hope that my right hon. Friend will feel that this is a reasonable proposal to make and that this type of agreement should be outside the requirement of registration.
§ Mr. P. Thorneycroft
I readily accept the principle of this Amendment. I think the Committee will agree that it would be an unfortunate result of these Clauses if we were to make registrable and subject to examination every arrangement for fixing standards under the British Standards Institution. That, I think, would be to defeat the objects which Parliament had in mind when we established the Institution. It would also create an intolerable burden for the Registrar and the Court.
I am prepared to accept this in principle, and I suggest to my hon. and learned Friend the Member for the City of Chester (Mr. Nield) that he withdraws the Amendment, for we may have to do a little redrafting of it, for two reasons. One is that it does not go quite far enough. It is possible under the Bill as drawn that the actual association for the formulation of the standards might be registrable, and I should like to exclude that too.
Secondly, these standards are of two kinds. One kind is concerned with design, and is very wide and useful in the engineering industry where, for instance, it is agreed that nuts should be of a certain gauge. The other is concerned with quality. The kind related to design presents no particular problem, but I want to consider whether we ought, perhaps, to limit the exclusion of agreements not to produce below a certain quality or not to produce above a certain 243 quality. I think those ought to be registrable. Anyhow, I should like to give consideration to it, and I shall be happy to consult my hon. and learned Friend on the subject. Subject to that, we are prepared, in principle, to accept the general idea of the Amendment.
§ 5.15 p.m.
§ Mr. A. E. Cooper (Ilford, South)
I appreciate the reply which my right hon. Friend has given and the difficulty in which he finds himself, but I would point out that merely to lay down that a standard of the British Standards Institution be the standard which we should reach goes not nearly far enough. There is a number of other institutes and other specifications covering a very wide range of industry which ought to be included in this exemption from registration. For example, the Government themselves, in a number of Departments, lay down standards which have to be accepted for a very wide range of products in industry. Apart from those, there are the British Pharmacopoeia and institutions such as the C.C.I. and A.I.D., and a number of requirements which come within the ambit of the exclusion which my hon. and learned Friend the Member for the City of Chester (Mr. Nield) seeks. The matter is not quite as simple as it would appear on the surface.
§ Mr. William Shepherd (Cheadle)
We may be in danger of cluttering the Court to an extraordinary extent, as may be understood when we remember that the B.S.I. alone has over 2,300 committees sitting upon various standards and specifications. Remembering that, one may have some idea of the danger one may be letting oneself in for in attempting to register such agreements. Therefore, I hope that my right hon. Friend will consider this matter closely between now and Report so that he may eliminate the possibility of that danger.
§ Sir L. Ungoed-Thomas
Like the President of the Board of Trade, we on this side of the Committee are in agreement with the principle of the Amendment, but, as we were when we were considering the last Amendment moved by the right hon. and learned Member for Chertsey (Sir L. Heald), we are concerned lest this Amendment should give scope for escape from the provisions of Clause 5 and that its effect may be 244 beyond that intended by the hon. and learned Member for the City of Chester (Mr. Nield). Once we get on to exclusions, we are on a very slippery slope. As the hon. Member for Ilford, South (Mr. Cooper) and the hon. Member for Cheadle (Mr. Shepherd) indicated, we shall be in difficulty if we are to take into consideration any agreement in which there is any reference to standards. The object of the Amendment is exclusion from Clause 5, and we must take care to avoid the obvious danger that we exclude from registration any and every agreement simply because it contains provisions relating to standards. The standards might be of the lowest and the reference to them the briefest.
It was because of that danger that my hon. Friend the Member for Stechford (Mr. Roy Jenkins) put down an Amendment to the Amendment, to stipulate that the Amendment should apply only to an agreement the "sole" purpose of which was recommendation of the adoption of standards drawn up by the British Standards Institution. I am sure that the President, when he considers the redrafting of the Amendment, will have that matter very much in mind.
§ Mr. P. Thorneycroft
I shall, of course, consider the points which the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) has made during my general consideration of how to redraft this Amendment. As my hon. Friend the Member for Ilford, South (Mr. Cooper) said, this is not altogether a simple matter. There are grave dangers in extending this proposal too widely. It would be quite possible so to draft the provision that it would exclude from the Bill agreements which, I am quite certain, my hon. Friends have not in mind. I think all of us, on both sides of the Committee, are very anxious that, in our proper anxiety to deal with cases which properly should be excluded, we should not open a loophole which would allow other cases, which ought not to be excluded, to slip outside the provisions of the Bill and of the general requirement to register.
§ Sir L. Ungoed-Thomas
The right hon. Gentleman said something a moment ago which I should like him to clarify for me so that I may understand him clearly. He said that associations for the formation 245 of these standards might be excluded. I do not know exactly what he had in mind. I should be grateful if he would amplify that a little.
§ Mr. Thorneycroft
It may be that the getting together for the purpose of formulating a standard may be registrable. It is a quite complicated process, quite generally followed, by which the consumers also are brought into consultation. That is rather a distinguishing feature of the British Standards Institution and puts it very often in a rather different category from some other arrangements of this kind. The mere process of coming together for the purpose of formulating the standard might itself be registrable, and I am certain that that is not our intention.
§ Amendment, by leave, withdrawn.
§ Sir Robert Boothby (Aberdeenshire, East)
I beg to move, in page 6, line 6, at the end, to insert:(4) This part of this Act does not apply to a restriction contained in an Agreement made by catchers of fish who are remunerated wholly or substantially by a share of the catch or a share of the proceeds of the catch or an Agreement between Associations of such catchers or Associations consisting inter alia of such catchers or between any such Association or Associations and such catchers.The purpose of the Amendment is very simple; it is to bring associations of share fishermen—that is, fishermen who earn their living by sharing the profits from their boats instead of by fixed wages—into line with trade unions. I am not in the least wedded to the terms of the Amendment and should be quite ready to accept any suggestion which my right hon. Friend cares to make in drafting an Amendment to bring this class of wage earners into line with members of trade unions. I see no difference between them. In imposing any restrictions, such an association of share fishermen would impose them for the purposes of protecting the conditions of employment and the remuneration of its members in precisely the same way as a trade union; there is no difference.
If they are not excluded, a difficulty will arise. If there were a collusive agreement on the part of the buyers—for example, if the buyers attempted to 246 gang up on an association, as they might conceivably do, by means of an agreement between themselves—and if the fishermen's association then pleaded that agreement as a defence of any restrictions it might have imposed, I think the association should at least be entitled to compel the production of the relevant information and documents about any such collusive agreement. As the Bill is now drafted, it will have to register an agreement, and if it then pleads, as defence, another agreement, it will be in a very difficult situation.
In the circumstances, it seems to me that by far the best way of getting out of this difficulty is to remove bona fide associations of share fishermen—in any terms which the President may decide to set down at a later stage—from the ambit of the Bill. No question arises here of imposing restrictive practices on anybody for the sake of restriction, or of increased profits.
§ Mr. P. Thorneycroft
Let me make one point quite clear at the beginning: the method whereby the fishermen receive their money, their wages, is not registrable, whether it is by a partnership scheme or a co-operative scheme or any other scheme. It is entirely a matter for them and, as far as I can see, it is right outside the scope of the Bill.
The effect of the Amendment would be to take fish and the fishing industry clean out of the Bill. There is no doubt about it; that is the effect it would have. The fishing industry is in many ways a highly controlled industry. We have the Herring Industries Act and the Sea Fish Industry Act of 1951, which are very comprehensive and which—I say it in no offensive way—are restrictive arrangements; but they are arrangements which Parliament has itself approved and they are therefore outside the Bill. Once Parliament has approved an arrangement, however restrictive upon the consumer, whether it puts up the price of fish or not, it is outside the scope of the Bill altogether.
The Amendment would go far beyond that. It would say that in this industry restrictive arrangements not expressly authorised by Statute, not approved by Parliament, but adopted by the industry itself, would be free, unchallenged and unregistrable, although they might be 247 exactly comparable with the same kind of practice in many other industries.
I have listened, as I always listen, to my hon. Friend's persuasive speech with interest, but I am bound to say that his Amendment would open too wide a gap and that too many fish would get through.
§ Sir L. Ungoed-Thomas
I was very much relieved to hear the right hon. Gentleman's remarks. The legitimate sharing arrangements of the fishermen would be covered by the exclusion of partnerships. Our difficulty—and we on this side of the Committee were opposed to the Amendment—was the arrangement in it for excluding agreements between associations, even associations which included other than catchers. As a result, it covered the whole industry and it would take the whole fishing industry clean outside the Bill.
§ Sir R. Boothby
I thought that perhaps the second part of the Amendment went a little too far. In view of the smashing retort of the President of the Board of Trade, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Amendment made: In page 6, line 9, leave out from "any" to "restriction" in line 17.—[Mr. P. Thorneycroft.]
§ Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.
§ Mr. Nield
I should like to raise one point and ask one question about the Clause. Would it not be thought right to exclude from the requirement of registration agreements which have been considered by the Monopolies Commission and approved, or approved by the Board of Trade after negotiation?
It is always helpful to give an illustration. One industry—and I will not identify it—was inquired into by the Monopolies Commission; it operated a common prices practice. After three years of very hard work for those engaged in the industry, in preparing their case, the Commission reported and recommended that the common prices practice operated, or was likely to operate, against the public interest. The Commission went on to say that it saw no objection to the trade association issuing a price list recommending 248 certain minimum prices but laying down no sanctions. After those recommendations the industry amended the practice so as to accord with them. It went further; it approached the Board of Trade, who had no objection to that practice in its amended form being carried on.
The point about which I seek information is this: is it not proper to exclude from the requirement of registration those practices which have already been inquired into and approved? I submit that, on the face of it, it would be very hard on an industry to have to go through the requirement of registration and to go before the Court when it had presented its case to the Commission over many months and the Commission had reached its conclusions.
May I foresee one answer? Later in the Bill we shall be dealing with Clause 24, whereby agreements may be registered and brought before the court even if they have already been condemned by the Commission. An industry may seek to reopen the matter. As my right hon. Friend will, I am sure, agree, there is all the difference in the world between appealing against a condemnation, which is frequently done, and appealing against an acquittal, which is very seldom done in our law. Once a practice has been found by those responsible to be in the public interest, I submit that the industry concerned should not be required to go through the machinery of the Bill but should be excluded from its ambit.
§ 5.30 p.m.
§ Mr. A. J. Irvine (Liverpool, Edge Hill)
When the Committee was considering the effect of subsection (2) of this Clause, I think it was generally felt that a great many questions arose under that subsection which were not entirely answered by the President's treatment of them. They are complex questions. If I might respectfully say so, the right hon. Gentleman made quite clear what he intended the effect of the Clause to be, but I think it would be very unfortunate if the Committee were to part with the Clause without satisfying itself a little more thoroughly that the intentions which the right hon. Gentleman expressed as desirable are implemented by the Clause.
The effect which the Clause as it stands would have is that the Act is not to apply "an agreement for the supply of goods, not being an agreement under which 249 restrictions in respect of transactions of the same description are accepted by two or more parties". The objective in the amended Clause I regard as a perfectly legitimate and proper one. I believe the intention is to exclude the sole agency agreement to include which would unmistakably cause more trouble than it would be worth. I think there is a reasonable objective here, and I also entirely accept that the very last wish of the President is to allow loopholes to occur in the provisions of the Bill more than can possibly be avoided; but, when that has been said, the effect of the Clause as it stands appears to give rise to a very substantial loophole.
I desire to mention the case, which has been referred to already in this connection, where A, B and C enter an agreement among themselves covering the terms upon which either all of them or one of them enter into a supply agreement with D. The whole point is that as the Bill stands, if the Clause remains in this form there would in such a case be a registrable agreement between A, B and C in respect of the conditions which were to govern the supply to D; yet the agreement with D would expressly not be registrable. That seems to me to give rise to all sorts of possible difficulties. In the instance I am describing, where A, B and C in a registrable agreement have decided on the terms on which goods are to be supplied to D, the Court is to have power, having determined the fact that the agreement between A, B and C is registrable, to make an order that the parties to it—A, B and C—are not to give effect to or enforce the agreement. That is provided in Clause 15. The agreement, by order of the Court, can be made unenforceable.
I am only seeking an explanation of all this. I should have thought the consequences were very remarkable and of a kind certainly calculated to dislocate trade and commercial relations to an extent much more than is desired. If in the case I have instanced a supply agreement is made with retailer D which, under the Bill, is expressly not registrable, but which stems from or results from an agreement by A, B and C, what is the result when the Court says that latter agreement cannot be enforced? The consequences might well be very serious. I think the consequences in this particular event would be particularly serious from the 250 point of view of the obstacles which would be imposed on trade and upon legitimate arrangements for supply.
If the right hon. Gentleman has erred, as I think he has in this instance, I am bound to confess that he seems to have erred in the direction which hon. Members opposite most keenly dislike and in this context with a fair amount of reason. I think, however, that it is reasonable to expect that in the case which I have described the practical outcome would be that far fewer agreements would tend to be registered than if this loophole were not provided. The Court, having determined that a certain agreement is contrary to public policy, has discretion to make an order. When the result of making an Order is to leave all kinds of individual retailers hanging in the air, as it were—parties to an agreement which is not itself registrable, but which stems from an agreement which the Court has determined to be contrary to the public interest—the Court may well be reluctant to exercise its discretion to make an order. There may be resulting from that situation sufficient grounds to justify the Court—which has a wide discretion in the matter—concluding that it is undesirable to make an order.
What I am doing in connection with this matter is, frankly, not to offer a solution. I am not at all sure that this is not one of the several problems confronting the Government in this Bill which are as nearly insoluble as anything which the wit of man can devise. I think it is the most frightfully difficult thing to tackle. I should have thought that what was necessary in order that a useful attempt should be made to deal with the difficulty was an express provision to deal with supply agreements which are made where one party to the supply agreement has entered it as a consequence of, or partly as a consequence of, arrangements he has made with others in a registrable agreement.
I think it needs quite explicit and separate treatment if the whole matter is not to be left in a state of confusion. As I have endeavoured to indicate, I feel the most likely practical consequences of this kind of provision are that the Registrar will be reluctant to register, or to allow to be registered, and the Court will be reluctant to make orders in respect of, agreements where, as a consequence of 251 registration and of orders being made, there may be serious dislocation affecting supply agreements which are explicitly exempt from registration under the Bill. It is a complicated and difficult point. I only ventured to intervene at this stage of the deliberations of the Committee because I rather thought that the President, contrary to his intention, had fabricated a really gigantic loophole in all probability in his amended subsection (2).
§ Mr. Philip Bell (Bolton, East)
I remember that when we were discussing the appropriate Clause 5 (4) it was specifically mentioned that the very sending round of a price list by an association was "specifically recommending," and, indeed, such would be implied to be a recommendation in relation to a class of goods. This, the Committee agreed, was one of the things that should be stopped. The point which my hon. and learned Friend the Member for the City of Chester (Mr. Nield) mentioned is one that I do not think the Committee had in mind when we discussed that Clause. I feel that it is a little hard, when an association has been told, "This is one of the things you can do," to find that we are now passing a Bill overruling what the Monopolies Commission said, after considering the whole position so recently, might properly be done in respect of a specific industry.
§ Mr. P. Thorneycroft
Perhaps I may reply first to the point raised by my hon. and learned Friend the Member for the City of Chester (Mr. Nield), and referred to by my hon. and learned Friend the Member for Bolton, East (Mr. Philip Bell), regarding arrangements which have been inquired into by the Monopolies Commission. It is quite a difficult point to deal with. Arrangements of that kind fall into two categories: those which are, broadly speaking, approved, and those which were disapproved by the Commission; though very often things are rather blurred together because they might have been approved, subject to certain conditions and so on.
As was said by my hon. and learned Friend the Member for the City of Chester, the ones that have been disapproved will not immediately be revived. It would be a remarkable result of this Bill if the moment it was passed everything condemned by the Monopolies 252 Commission should be suddenly revived and become fully operative. I do not think anyone would urge that we should seek that sort of result. Equally, we cannot say that they will not be revived. There is a new law on the subject; new criteria have been set up making different presumptions, and we certainly cannot say that they should not be given the opportunity at some appropriate stage to come forward and say, "We think we fall into one of these particular categories in the Clause. We wish to argue our case." Though we do not wish to see the whole machine flooded with the applications to start with, we shall later be discussing provisions which will enable that sort of thing to be done.
If we are to do that for the ones which have been disapproved, I do not quite agree with my hon. and learned Friend that we should rule out of consideration all those which may have been approved. After all, the law on the subject has been changed, or will have been changed, and I assume that Parliament will have laid down what criteria it thinks should be imposed, where the presumption should lie, and so forth.
I think the fact that a full investigation has been held into this and arguments fully set out in the careful reports of the Monopolies Commission is a powerful argument in favour of these cases. Moreover, there is this further consideration, that the Board of Trade has some control over the order and timing in which these matters are brought forward. We can discuss later whether it is appropriate or not to have it, but I think it would be the commonsense view that one would not rush before the Court—unless one was very much urged to do so—with a large number of matters which, after careful investigation, someone had said did not operate against the public interest. I do not think such cases would have a high priority. I do not think we should be right in excluding from the Bill any agreement, because at some stage it had been considered by the Commission, whether it had been wholly disapproved or approved, or approved subject to conditions.
The hon. Member for Edge Hill (Mr. A. J. Irvine) raised the important and difficult point about the new drafting of Clause 6. As I said at the time we were considering that Amendment, I am not 253 wholly wedded to these words. We are agreed about the objective which we should have in mind and, in considering any possible redrafting, I shall certainly take into account the detailed arguments advanced by the hon. Gentleman. He took the point that where three suppliers came mutually to a restrictive arrangement it would be a registrable arrangement. There would be two or more of them making restrictive arrangements for the same kind of transaction, and there is no doubt that it is registrable.
As the Bill is drafted, it appears that the agreement between them and the person supplied is registrable. This was mentioned earlier in our discussions when I said it was for consideration whether we should not concentrate our attention upon the root agreement, that is to say, when A, B and C agree together that they will supply to everyone at a common price. That is plainly something which should be registered and examined by the Court. I am a little anxious that we should not register every agreement between three persons—as it may sometimes be—and the retailer. If that is done, we are likely to have a great rush of cases for registration and the principles which govern the individual sales by two people jointly to someone else will be precisely the same as governed the root agreement when they all came together and said, "This will be our policy."
These are complex and difficult subjects. I am not now trying to do any drafting, but I am saying that these are the issues to which the hon. Gentleman, in a most interesting and informative speech, was directing the attention of the Committee. I make this reply to indicate that we have them well in mind and will take them into account in any redrafting which may be done.
§ 5.45 p.m.
§ Sir L. Ungoed-Thomas
This is a very important point. We are a little concerned about the Amendment itself, and as the President will consider the drafting it is rather important that we should get our ideas about it quite clear and make sure that we understand each other and know exactly what the President has in mind before he comes to the drafting.
I am here concerned, as I have been with all the Amendments to Clause 6, 254 with the loopholes in the Bill. From a business point of view, I fully understand the difficulties where A, B and C enter into a contract for the supply of goods to D. The question arises regarding the two conceptions in the same agreement, one conception of an agreement between A, B and C, and the agreement between three of them, either jointly or separately, with D. As I see it, this is the crux of the matter. Obviously, the agreement between A, B and C should be registrable. That, obviously, is the intention. If A. B and C were jointly in the venture and agreed to sell to D, in that case it should be included in the Bill. I think the answer is that if we do not include it in the Bill we are running a very grave risk.
The whole position is opened up. All one would have to do in order to escape the provisions of Clause 5, would be to say, "In our association we will sever our agreements to deal with separate items if need be." Where there is an agreement between any member dealing with the supply of goods to another party, then they are taken outside the Bill altogether. That is the danger as I see it. Somehow or other there must be a severance between what the President has called the root agreement and the sales agreement. Unless that severance is achieved we are simply driving a coach and four through the Bill.
§ Mr. P. Thorneycroft
I am as anxious as the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) not to open up a loophole here, and we shall look at the drafting of the Clause very carefully. It was not in my mind that merely by importing a fourth party it would be possible to get round the provisions of the Bill. What I had in mind was that what really matters is the mutually restrictive arrangements reached between a ring of suppliers—agreements laying down a policy of selling at common prices, or only to certain people. That is something which should properly be brought before the Court and judged upon its merits and criteria.
I am assuming that we are here dealing with the case of persons undertaking a joint venture. It would be a pity if, on each occasion when a joint sale or 255 arrangement of that sort came forward, it should be registered and the whole argument gone over again. I can see chaos resulting if that device were adopted. Therefore, I suggest that in redrafting the Bill we should seek a way of cutting out most of the arrangements which would be imparted by registering each transaction, while not in any way weakening the provision that the main agreement should in all cases be registered.
§ Sir John Barlow (Middleton and Prestwich)
I am not entirely satisfied with the reply which my right hon. Friend gave to my hon. and learned Friend the Member for the City of Chester (Mr. Nield) in relation to those industries which have appeared before the Monopolies Commission since it began its work three or four years ago. It is a known fact that it has meant a tremendous amount of work for the industries involved, and that it has taken time for the Commission to investigate these subjects. It has arrived at varying conclusions, saying that certain arrangements were bad, and others were good.
Arising out of the Commission's findings, arrangements have been made with the Board of Trade to ensure that certain industries should drop certain practices. Although the Bill will override those decisions, it is to be presumed that the arrangements arrived at were fairly good and common-sense arrangements on the whole, and I suggest that an enormous amount of work would be involved if those industries which had already been under fire during the last four years were investigated again. A tremendous amount of time and energy is required in relation to these inquiries, and before the Bill reaches a later stage I urge the President to see if he cannot do something in this matter. We are anxious that industry should produce and export more, and not devote the time of its chief executives to matters of this kind.
§ Mr. Shepherd
I do not want the impression to be gained that all hon. Members on this side of the Committee support the view originally expressed by my hon. and learned Friend the Member for the City of Chester (Mr. Nield). I should take very grave exception to any provision which expressly excluded 256 certain classes of persons for all time. That would be the effect of the Amendment. It would be a most regrettable action, and I am very surprised that my hon. and learned Friend has suggested it.
There is no permanence about the decisions taken by the Court. It may be that after a period of years those who have had their agreements disapproved can bring them forward again and, in different economic circumstances, have them approved. It would clearly be quite wrong if, having set up this idea of flexibility, an absolute rigidity were introduced in respect of a certain number of practices by a certain number of firms. I want to reassure my right hon. Friend that there is by no means unanimity of view on this side of the Committee, and that many of us would take very grave exception to any exclusion of certain classes of persons from the provisions of the Statute.
§ Mr. P. Thorneycroft
I do not think that there is any real disagreement about this matter. From what my hon. Friends have said, there may be some difference of emphasis. No one suggests that certain classes of persons should be excluded for all time, although that is the effect of the Amendment. I think the general view is that nobody should be exempted for all time. At the same time, there is general agreement that practices which have been disapproved should not be taken first before the new Court.
It may be that we can say that there is not so much urgency to deal with cases which have recently received very full examination, but I would ask the Committee to remember that an industry itself may sometimes wish a case to come forward, especially in respect of an agreement which has previously been disapproved. It may even wish to do so in other cases. From time to time, especially when some of the earlier decisions of the Court have established a line of precedents, an industry may wish to be cleared in respect of a certain agreement and have a certainty introduced into the matter. I think the best thing to do is to leave the Bill as it stands, and not try to exempt a particular category for all time.
§ Sir Peter Roberts (Sheffield, Heeley)
One of the difficulties I foresee is the trouble which various industries will have to go to in order to register agreements, even though the Registrar does not propose to take their cases for three, four or even five years. Is it not possible to reconsider this matter in the light of Clause 7, under which it might be possible to give the Registrar power to exclude certain agreements for a specified period? We want to avoid industries having to go through all the rigmarole of registration, and so on, when it is probable that the Court will not investigate them for a number of years.
§ Mr. Thorneycroft
It is not for me to say what would be in order for discussion upon the next Clause, but I think we should have to stick to the arrangements which are in the Bill with regard to registration, namely, that the categories for registration would be laid down by Orders moved by the Board of Trade. Those Orders are debatable in the House, and I imagine that many of these arguments could be advanced in such debates.
§ Mr. Jay
I should like to ask two further questions so that the Committee can be clear what it is doing, and also that it is doing what it wants to do. My questions relate to the connection between subsection (2) and the individual resale price maintenance which we come to later on. When I first read subsection (2) I found it quite unintelligible, and when I read it further times I thought that it was concerned with individual resale price maintenance.
Suppose an ordinary case of a one-man factory, the owner of which makes a resale price maintenance agreement with one retailer which is mutual in the sense that there are reciprocal benefits from the manufacturer. Would that agreement be excluded from the Bill by subsection (2)? Secondly, can the President of the Board of Trade assure us that if such agreements as were discussed earlier, made by trade associations, by which a number of producers or suppliers make an agreement that they will all enforce individually resale price maintenance, that such an agreement would remain within the scope of Clause 5 and that he is not inadvertently pushing it out of the Bill by Clause 16?
§ Mr. P. Thorneycroft
The answer to the first question is "No" and to the second "Yes." The first case is of a straightforward deal between supplier and retailer, and there would not be two or more persons engaged in restrictions in regard to the same kind of transaction. We could not register every deal between a supplier and a retailer. We should get into an impossible position.
If two manufacturers arranged together that they would both maintain their prices, we would have two or more persons entering into a mutual restriction as in the case of a trade association, which is an elaboration of this second case. That would be a registrable agreement, because it would be a mutual' restriction within the purposes of Clause 5.
§ Clause, as amended, ordered to stand part of the Bill.