HC Deb 30 April 1976 vol 910 cc800-10

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

4.2 p.m.

Mr. Michael Neubert (Romford)

The week began on Monday with Oral Questions to the new Secretary of Sate for Trade, including one seeking ratification of the European Patent Convention. The weeks ends with my Adjournment debate this afternoon on the same subject, thus aptly providing two matching book ends for the week's business.

The neatness of the arrangement will appeal to those, including yourself, Mr. Deputy Speaker, who have an aesthetic appreciation of the form and structure of our parliamentary life. However, the reason for this sequence of events is far less satisfactory, since it appears that the cause of early ratification of the European Patent Convention is no further advanced today than it was on Monday or, indeed, at any time in the six months that have elapsed since the omission of all mention of it from the Queen's Speech last November. This delay is causing increasing concern.

It seems that in matters of patent law, delay tends in recent times to have been the most characteristic feature. In 1967 the Government of the day—I stress that dilatoriness does not lie with this Government alone—set up the Banks Committee to review the patent system and the prevailing statute, the Patent Act 1949. That committee, under its chairman, Sir Maurice Banks, reported in July 1970. The meritorius Sir Maurice was knighted in 1971, but in the six years which have passed from the date of his report being lodged with the Government, there has been no further end product as a reward for his public endeavours.

Similarly, the opportunity was lost of the location of the headquarters of the European Patent Convention being secured for the United Kingdom in the inaction of five months from October 1971 to May 1972 by the time our tardy bid was made. Eventually it went to Munich.

Likewise, the conference on and the signing of the Community Patent Convention, as opposed to the European Patent Convention, was delayed for 18 months from May 1974 to December of last year at the request of the United Kingdom. It is in an endeavour to ensure that there should be no further delay in this matter that I take the opportunity of raising it this afternoon.

First, let us be in no doubt about the strength of the support for this proposal. It is supported, as will be known, by the Chartered Institute of Patent Agents, the Confederation of British Industry, the International Chamber of Commerce, the Association of British Chambers of Commerce, the Trade Marks Patents and Designs Federation and, so far as is known, by the Department of Trade under successive Ministers. But, despite that support, the history of this proposal is very disappointing.

Let us consider the Government's record. They produced a White Paper entitled "Patent Law Reform" in April 1975, Cmnd. 6000, in which they accepted most of the main recommendations of the Banks Committee. They committed themselves to introducing legislation during the next parliamentary Session—namely, the present Session. But when the Queen's Speech was made last autumn there was no mention of this proposal, although it could be covered under the head of other matters.

In view of the anxiety among patent agents and others outside the House, Questions were asked on 15th December 1975. The Under-Secretary of State for Trade, the hon. Member for Hackney, Central (Mr. Davis), whose attendance I welcome here this afternoon, replied: I am aware that ratification by the United Kingdom of the European Patent Convention at the end of 1976 is important for British interests, and my right hon. Friend intends to introduce a comparatively short Bill to enable this as soon as circumstances permit. Further legislation will be necessary to enact the White Paper proposals for patent law reform and to permit ratification of the Patent Cooperation Treaty and of the Community Patent Convention which is being signed in Luxembourg today. Due to pressure of parliamentary business it will not be possible to introduce this more comprehensive legislation during the present Session."—[Official Report, 15th December 1975; Vol. 902, c. 944–5.] That was clearly a setback, but at least it offered the promise of a small measure to achieve the specific ratification of the European Patent Convention.

On Monday 26th April the Secretary of State for Trade gave a no more encouraging reply when he said: I agree that it is important for the United Kingdom to ratify the European Patent Convention before the end of this year. For this purpose legislation is required and I will introduce this as soon as circumstances permit. In answer to the following supplementary question the right hon. Gentleman said: I recognise that it is an important question. I shall do what I can to introduce legislation at the earliest possible time so that we can ratify it before any serious disadvantage is caused to this country."—[Official Report, 26th April 1976; Vol. 910, c. 18–19.] It is important to realise that ratification of the convention does not depend upon us alone. The proposal is that the convention should come into effect by the beginning of next year provided that by the end of 1976 at least six countries should have ratified the convention which had an aggregate of 180,000 applications filed during the course of 1970. Germany which has about 60,000 applications to its account, has already begun to take a measure through the Bundestag. Similarly, France is on the way. France accounted for about 60,000 applications in 1970.

It will be seen that already those two countries alone would muster two-thirds of the necessary support. When we realise that countries such as Holland and Italy, where merely a simple resolution is required, are also moving towards ratification, it is clear—perhaps on this occasion I might be allowed to say that it is patently obvious—that the Government are in a race and are stuck at the starting gate.

The disadvantages which will flow from any failure to meet the deadline at the end of the year are very serious for the patent agents' interests, and those interests are national. On Monday we welcomed last month's trading figures. The visible trade deficit of only £19 million was offset by a surplus on invisible earnings of £120 million, thus creating a surplus overall of £101 million.

Among those invisible earnings there will undoubtedly have been patent agents' fees from overseas clients. It is estimated that in the course of the average year £10 million in foreign currency earnings are brought into this country in this way. One of the first and most important results of failing to ratify the convention would be that we should lose that business, particularly that from Japan and the United States. Patent agents naturally are concerned with the situation.

Furthermore, patent agents in industrial companies would have to lodge their applications with agents locally—for example, in Germany—and there would then have to be a transfer of currency from this country to pay the German patent agents to present applications before the European Patent Office. There would then be the possibility that senior British officials would lose the opportunity of securing positions in the European Patent Convention.

Finally, there would be the loss of leadership and influence generally in patent matters in the United Kingdom. That is the great feeling of apprehension on the part of anybody concerned with the cause of Europe, particularly when we appreciate that it is estimated that if we become parties to the convention, fully ratified, 60 to 80 per cent. of the business and applications made would be conducted in the English language.

For all these reasons, it is important that the Government should introduce the necessary legislation to enable these matters to go ahead, and in particular to enable our patent agents to secure the necessary business in support of our foreign earnings.

Up to this point in my remarks I have been relatively mild-mannered and, if my remarks take on more pungent flavour, it must be attributed to my personal responsibility and not to anything felt by supporters of these proposals outside the House.

We are well aware that the problem faced by the Government is the finding of legislative time for the short Bill that has been promised. When we bear in mind that 49 Bills have already been introduced, which are being considered in 10 Standing Committees, it is not only Opposition Members but hon. Members in all parts of the House who are beginning to think that that number could be cut by half.

Surely where measures of relative brevity and simplicity are awaiting introduction and enactment—measures that would bring certain benefits, as confirmed by the Government's White Paper—it would be wrong to give priority to other more doctrinaire Socialistic measures which are not sufficiently supported by a mandate in the country, having been brought forward by a minority Government. These matters can be covered by a relatively inoffensive measure. My fear is that if the measure is further delayed, it may be embraced within a much wider measure which might not of itself be so uncontroversial.

In support of this view, I quote the opinion of the Under-Secretary of State on 15th December 1975, stated in reply to a supplementary question. The Minister said: The Banks Committee put forward a variety of propositions which we would seek to enact in a comprehensive Bill. This would have included a number of cotroversial aspects."—[Official Report, 15th December 1975; Vol. 902, c. 945.] The specific and narrow issue of the ratification of the European Patent Convention is, by general acknowledgement, not controversial. There has been an Early-Day Motion on the Order Paper on this matter for some time. There is a certain imbalance in the number of signatures on the motion, but I would not call it anything but bipartisan. There is no general controversy about this proposal, except for those for whom the very mention of the word "Europe" is enough to bring about a chronic bout of anathema.

I turn to a less contentious note and leave the last words to the Comptroller-General of Patent Designs and Trade Marks. In presenting the 93rd Report of his organisation he said in April 1975: If the United Kingdom is to be a party to the European Patent Convention from the setting up of the European Patent Office, early legislation to that end will be necessary". The Government should take note and act fast. The Minister should bring in a short, 10-clause Bill this Session to ratify the European Patent Convention. If he does so, he will contribute significantly to the nation's prosperity.

4.15 p.m.

The Under-Secretary of State for Trade (Mr. Clinton Davis)

I shall ignore the more bellicose and less relevant part of the speech by the hon. Member for Rom-ford (Mr. Neubert). It was otherwise helpful. On behalf of the Government I fully accept the case that has been made for the early ratification of the European Patent Convention by the United Kingdom. I do not hide my disappointment that we have not yet been able to find legislative time for it.

We recognise that, without British participation, it might not be possible to adhere to the internationally agreed timetable for the opening of the European Patent Office, although the preparatory work for this is now at an advanced stage. Even more undesirable would be the situation that would arise if the convention came into force before we ourselves had ratified it. The problems that either eventuality would create can be foreseen, and during the past few months we have been constantly reminded of these by bodies representative of industry and the patent profession, as well as by many individuals having an interest in patents.

All this we well understand. But I think that the convention, important though it is, should not be looked at in isolation, but should be seen in the context of all the developments in patents that have been taking place in recent years.

The past 10 years or so have been remarkable for their activity in international patent co-operation. The pressures behind this have been twofold: from the many industries who trade internationally in one way or another, and who would obviously benefit if the principal national patent systems could be harmonised so that patentees enjoyed much the same rights wherever they were obtained, and could obtain those rights without the necessity, as at present, of proceeding country by country, and from national patent offices burdened with the administrative problems created by the enormous growth in patent activity in the post-war years.

The full results of this activity are now emerging. First, there is the Council of Europe, or Strasbourg, Convention, of 1963 providing for harmonisation of basic patent law. Then there is the Patent Cooperation Treaty of 1970, a potentially world-wide system of work-sharing, promising substantial benefits to patentees and national patent offices, and providing for a degree of harmonisation amongst national patent laws. Next, there is the subject of today's debate—the European Patent Convention of 1973—which will centralise much European patent work, both from EEC and non-EEC States, in the European Patent Office in Munich, and also ensure that patents granted by the European Office will have much the same legal effect in all the contracting States. Finally, there is the Community Patent Convention signed as recently as December of last year, which provides for a single supranational patent, giving the same rights in all Community States. All these international instruments are, moreover, interlinked and should eventually give inventors and innovators the opportunity of obtaining uniform patent protection over much of the world much more easily than is possible today.

But these important international arrangements must all be grafted on to national patent systems, since these do not cease to exist under the new arrangements but will continue to serve those whose interest in obtaining protection is confined to their own shores, as well as providing the legal framework for those patents obtained on one or other of the international routes. So the task of modernising our patent system will not be completed merely by ratification of the treaties to which I have referred, but must be complemented by a thorough overhaul of our domestic law and procedures, following the proposals in the White and Green Papers published in April of last year, and which stemmed from the report of the Banks Committee, published in 1970. Only then shall we have reached the goal of a patent system able to protect the results of industrial research and development through the grant of strong patents, both here and abroad.

Of course, the new procedures will inevitably have their complexities. They exist today. But we expect them to be better attuned to the needs not only of those who obtain patents, but also of those, less commonly considered in discussions on patents, who wish to challenge the existence of patent rights. The final objective must, therefore, be a British patent system reformed to meet all the national and international objectives that I have outlined. It scarcely needs underlining that it would be preferable if all the changes in our law necessary to achieve those objectives could be made in comprehensive patents legislation.

Piecemeal legislation obviously has its dangers. It would be expensive in legislative time. It is, generally speaking, less desirable to do it in this way. It would create the possibility of patents effective in the United Kingdom being granted to two different standards, one in London and the other in the European office in Munich. There could be uncertainty about the future form of the British patent system if there were that approach.

It remains our hope, therefore, that time can be found early next Session for a Bill that will deal with all the changes that will be needed in the patent system during the next few years. It is true that, as the hon. Gentleman pointed out, the changes in law that will permit the United Kingdom to ratify the European Patent Convention could be made in a comparatively short Bill. Indeed, we have been urged both in this House and in the heavy correspondence we have received on the subject from industry and individuals to introduce such a Bill this Session. That is what the hon. Gentleman has invited the Government to do. It would ensure our early ratification of the convention.

I must tell the hon. Gentleman, though he must have gleaned the information from the answers he read out—it is always possible to read between the lines even in parliamentary answers—that we should very much have liked to see this happen this Session, but the demands on parliamentary time have been very heavy. I think that the hon. Gentleman will agree that even if we were to leave out the more contentious issues before the House there are difficulties even with a short Bill.

Ten clauses do not seem very much but they can be very complex in what is undoubtedly a most complex field of the law. Moreover, there would be likely to be four schedules. The Bill would have to graft on to the Patents Act 1949 the obligations imposed by the European Patent Convention as regards patents. This would involve giving effect in the United Kingdom to a European patent as if it were a United Kingdom patent founded on an application filed in the United Kingdom Patent Office.

Secondly, arising from that in a way, the proposition would be subject to a number of important qualifications which would have to be spelt out in the Bill—for example, the validity criteria for a European patent are to be different from those of the weaker United Kingdom patent.

Thirdly, it would be necessary to give effect in the United Kingdom to a European application and to provide protection rights for the applicant as from a date much earlier than is the case for a United Kingdom application.

Fourthly, the powers of the Comptroller must be widened to permit the Patent Office to undertake certain functions relating to the European system, such as agency work.

Fifthly, the Bill would have to provide for European applications by United Kingdom residents relating to defence matters for atomic energy, and to enable conversion of those and of European applications in respect of other matters into United Kingdom applications on certain conditions.

Sixthly, the rules in the 1949 Act concerning agents would have to be amended.

All those are points of considerable difficulty and complexity, since there is a remarkable difference between the structure and terms of the 1949 Act and the European Patent Convention. Therefore, it is not as simple as the hon. Gentleman might have given the impression.

The difficulties could no doubt be overcome if we had a little more time, but the demands upon parliamentary counsel are considerable, and when we consider legislation of this kind, particularly in a highly technical area, we must get it right. If we were to hasten into something and have legislation ultimately found to fall short of the standard required, I am not sure that we should have advanced the cause all that much.

But the hon. Gentleman may have this assurance from me. As we have said repeatedly over some months, we shall do our best to ensure that the British interests in all the matters to which he alluded are not sacrificed by delay. We shall do our best to get the legislation on the statute book at the earliest possible moment. We may have to fight a little for that, but we shall fight.

As the hon. Gentleman conceded, the desire of the British Government is to protect the industry and the profession as much as possible. I assure him that in our performance we shall do our utmost not to be found wanting and I hope that the industry and the profession will derive some satisfaction from these words of mine, although I have given no specific undertakings about time.

Question put and agreed.

Adjourned accordingly at twenty-five minutes past Four o'clock.