PATENTS (FEES) (Hansard, 20 November 1970)

§ The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley)

I beg to move, That the Patents (Fees Amendment) Order, 1970, a draft of which was laid before this House on 29th October, be approved. The purpose of the Order is to increase the maxima of the fees which may be charged for patents. It is at present impossible to increase the fees of the Patent Office because the existing fees are already up to the statutory maxima. The last Order of this sort was laid in 1961 1668 and the one before that in 1949, so that there are two fairly recent precedents for Orders of this nature.

I think that it has always been accepted on both sides of the House, that the fee-paying branches of the Patent Office should be required to balance their costs with the fees they receive and that there should be no net subsidy from the Exchequer. The fee-paying branches of the Patent Office are the services which deal with the granting and maintenance of patents and the registration and continuance of trade marks and designs. The other activities of the Patent Office are excepted as being the responsibility of the taxpayer and no fees are charged.

The fees were last increased in April and December, 1969, and, as I have said, the level of fees now pertaining is up to the statutory maximum. Nevertheless, despite fairly rapid increases in fees in the past, the Patent Office has been in deficit almost continuously, although it is hoped that there will be a balance achieved, if not slightly better, during 1970. Unless, however, the fees are increased again in the not too distant future, the Patent Office finances are likely to go into deficit. Indeed, the estimate is that on the present level of fees there will be a deficiency of £2 million over the four-year period 1969 to 1972 unless something is done.

The Order does not enable fees to be increased. It merely enables the maxima to be increased. In due course, regulations will be laid before the House to increase the fees. Those regulations will be subject to the negative Resolution procedure in case objection should be taken to them. At this stage, we are merely facilitating the laying of such regulations by laying the Order to increase the maxima which can be charged.

The only point which I should like to draw to the attention of the House or the Order is that a £1 fee is still all that will be permissible for an application for a patent. This is kept at a deliberately very low level so that any inventor, however impecunious, may register a provisional application for a patent and will have one year in which to discover whether he can find a commercial application or a backer for his invention. Thus, nobody can claim that high patent fee levels frighten him from attempting to register his invention and to find sources by which he can 1669 exploit it during the period of one year. Otherwise, the remainder of the fee maxima are being quite considerably increased. If any hon. Member is interested, I can, of course, give full details.

It is necessary to increase the maxima because the costs of the Patent Office have been steeply rising. The total cost of the fee-earning branches in 1960 was £1,912,500. By 1968 it had risen to £3,848,000 and the estimate for this year is £4,689,000. The estimate for 1972 is £6,536,000. Therefore, in the 12-year period from 1960 to 1972 there has been an almost three-fold increase in the likely cost of the fee-earning branches.

I have been critical of this steep increase in costs in the past, but I am satisfied that there has been a large increase in the amount of business transacted by the Patent Office. I am satisfied that there has been an increase in the productivity and efficiency of the Patent Office during this period.

Nevertheless, the Government are aware of the need to be vigilant in this sphere. An O & M study has been taking place for the last year and the Government are awaiting the report into the scope for mechanisation and improvement in the techniques of the Patent Office. There is also a continuing need for inquiry into the structure and efficiency of the Patent Office and, in this context, perhaps the most important point is for a solution to be found to the problem of accommodation.

At present the Patent Office operates in several buildings. It is clearly unsuitable that this should be so because this operation should be brought together under one roof. We are trying to solve this problem by finding a suitable building in the centre of London where the whole of the staff of the Patent Office can be bought together.

A considerable number of uncertainties lie ahead. There is the question of the Banks Committee which, as the House knows, has reported. The Government will soon be giving their views on the recommendations of that Committee and we hope that in the not too distant future there will be legislation reforming the British system of patents.

In this Order we have moved slightly towards the new fees structure recom- 1670 mended by the Banks Committee, so that nothing we are doing today is likely to be in contradiction to the sort of recommendations which that Committee made. We are also watching Continental developments in patents—in particular the proposed European Patent—and what moves the Common Market is making in this direction.

With all these uncertainties ahead, it is impossible for the Government at this stage to make a clear statement of future objectives for the British patents system, nor of methods by which we can keep the costs of the Patent Office under control. I therefore ask the House to approve the Order, which we regard as a holding operation so that we may put up the fees of the Patent Office for the two or three-year period which will intervene before it is possible to bring forward legislation containing final solutions to these problems. I assure the House that the increase will be kept to the minimum and that it is necessary to balance the books of the Patent Office.