HC Deb 22 July 1977 vol 935 cc2088-109
Mr. Clinton Davis

I beg to move Amendment No. 45, in page 112, line 7. at end insert '(but not in relation to patents and applications for patents under this Act)'.

This is a drafting amendment.

Amendment agreed to.

Mr. Clinton Davis

I beg to move Amendment No. 46, in page 112, line 8, leave out from '12 to 69' in line 9 and insert '13, 15 to 17, 19 to 21, 22(1) to (3), 23 to 26, 28 to 33, 46 to 53, 55, 56, 59 to 67,'. This is essentially a structural rather than a substantive amendment. I do not think that I need to spell it out.

Amendment agreed to.

Mr. David Crouch (Canterbury)

I beg to move Amendment No. 47, in page 112, line 34, after 'years', insert 'or, in the case of a pharmaceutical patent, fourteen years,'.

Mr. Deputy Speaker

With this we may take the following amendments:

No. 48, in page 112, line 39, at end insert— '(bb) a pharmaceutical patent for these purposes means a patent related to the manufacturer of organic chemical compositions capable of use and, to the extent only that they are so, applied in medical diagnosis, therapy or prophylaxis.'

No. 50, in page 113, line 5, at end insert 'and in considering any application under the relevant section for an extension of an old existing pharmaceutical patent the court shall take into account the special circumstances of the pharmaceutical industry.'

No. 55, in page 113, line 37, after 'patent', insert 'other than a pharmaceutical patent'.

Mr. Crouch

I am afraid that at this stage there may be some slowing up in our rapid progress, but I shall try not to slow up any more than is necessary to put my argument to the Minister. This is not a day when I am seeking to sway the House, but it is a day when I seek to communicate my ideas to the Minister, for whom I have considerable regard and who I know has had a great deal of information given him about the matter of which I am about to speak, in Committee, in the other place and in his Department.

I must first declare an interest. We are talking about the pharmaceutical industry. I must declare that I am in that industry and am a director of a pharmaceutical company.

The Bill is undoubtedly an improvement on the 1949 Act. In one important sense it is a great improvement, in that it grants a 20-year life to new patents, compared with only 16 years granted under the old Act. But the Bill goes further, and grants an extension to existing patents. It rightly recognises the need to make this reform effective at once. The Bill is not only about the inventions and patents of tomorrow; it seeks to produce an immediate change for the better. This is a reforming Bill and an imaginative one. It recognises the importance of existing patents. It requires the advantage and protection of these new inventions and it is an advance towards helping British industry, British science and British technology.

The Bill is designed to encourage British innovation, initiative and invention. It is part of a plan to regenerate British industry not in the long distant future but at once, with no delays or bureaucratic interference. It will, of course, present problems for the administrators, for the careful co-ordinators of Government regulations and for the lawyers, the patent attorneys and agents, and all those who toil away so assiduously to protect British industry from unlawful interference and from contamination by predators, copyists and imitators.

These protectors—the patent lawyers and other Government protectors—will have to accept the changes made in this new Bill, because the Bill offers industry more protection—a longer patent life. Technology today needs strong patent protection. Scientific and technological achievements must have patent protection if they are to mean anything. Nothing can be done with them if that protection is weakened in any way.

Industry as a whole has welcomed these changes for the future and the changes that are offered for existing patents. After lengthy consideration, the industry has produced a recommendation, through the Standing Advisory Committee, that existing patents with more than five years to run should be extended from a 16-year life to the full 20 years that will become law for all new inventions after the appointed day.

I think that that was a very reasonable recommendation as a general rule and as a norm, but all industry does not fit the norm. We cannot ignore the argument for a differential in some cases. I believe that the Bill will be inadequate and imperfect if it does not take into account that differential factor in regard to one industry, the pharmaceutical industry. I am making a plea for the industry not because I am connected with it but for a number of special reasons.

There is a very good reason for not extending all existing patents across industry at the drop of a hat. Manufacturers tend to wait in the wings for patents to run out, and while they wait they prepare themselves to go into production of a patented product as soon as they are legally free to do so when the patent expires. They not only commit themselves to investment; they often embark on great plans of expansion. We should do nothing to inhibit such initiative and investment and the growth that can come from them for those manufacturers who seek to take up a patent, who seek properly to muscle in on a patent when their rightful opportunity occurs.

That is why the limit of five years or more to run has been included in the Bill for existing patents. I do not argue against it in general, because manufacturers have been waiting to take up patents near the end of their 16-year life and a decision to enter the lists as producers is not a light one. It is often a very expensive decision, which can mean a big investment. To take up a major industrial patent can involve many millions of pounds. In the petrochemical industry, for example, the scale of investment is from £200 million to £300 million, in the nuclear industry it is much higher, and in the aviation industry it is likely to be even higher.

Therefore, manufacturers are not likely to rush in when they see a patent running out. They must take into account their capacities and capabilities, the availability of resources and finance, before they can enjoy the advantage of a patent that is running out, whether it be held in this country or owned by a foreign company.

But one industry stands out as different from all the rest in the patent business—the pharmaceutical industry. A pharmaceutical product does not require massive plant or complicated machinery for its production. It is a small process to produce a pill, a tablet, a cream, a powder or a liquid. The starting chemicals, the intermediates, can be bought freely in this country and other parts of the world. It is the putting of those intermediates together to form a hitherto protected and patented drug that is the necessary task. No great cost is involved, once one gets one's hands on a patent, because all the expense is in the research, which has already been paid for. Here I am talking of research paid for by a British patent holder, because we are one of the leading countries in the world in innovation in the development of pharmaceuticals.

I shall name one British firm that I know of—not one with which I am connected—that in recent years has moved out of the old-fashioned chemical business into the new-fashioned organic chemical business and the pharmaceutical industry in particular. That firm, Fisons, is currently spending on research one-third of the disposable profit from its pharmaceutical production. It is ploughing profits back into the business of science and technology and research, not into new machinery or new plants. It is finding it necessary to make its major investment in scientists and scientific equipment because that is the only way to keep ahead. One cannot afford to fall behind in that business. One must match one's competitors' efforts in scientific research and development.

A pharmaceutical product is unique, not because it is a protected invention of which we can be proud, and which can earn great financial rewards for this country, but because it cannot earn great rewards for the best part of its patent life. From the day application is made for a patent for a lifesaving drug, a major curing drug or simply a pain killer, the sale of the new drug is forbidden. It must be tested first under the most rigorous conditions and by lengthy procedures. It must pass a Government Committee—the Committee on Safety of Medicines, set up in 1971.

That is absolutely right. I would not ask that the process be accelerated in any way. I would prefer delay if it meant a better safeguard for public health. I would certainly rather see a new drug with possibly great potential fail to pass its test and not be allowed to be marketed if that would prevent any risk to a patient to whom it might be given.

The money involved would not have been wasted. The cost is something that the pharmaceutical industry has come to expect. The time would not have been wasted. That is something else that the industry must endure. It is used to failure. But if it succeeds in getting a product past the Committee it is entitled to financial success in the few years left to it for that patent. The industry is one of our most successful, innovative and competitive, and one of the most valuable creators of wealth for Britain. Last year it earned a net balance of payments surplus, after all imports were subtracted of £313 million. The Minister is well aware of these figures. Its exports amount to no less than 7 per cent. of the exports of all manufacturing industry in this country. Last year it sold at home about £420 million-worth of its products, almost entirely to the National Health Service. That is a large figure, but the much larger figure of £450 million worth was sold overseas. This is an export-earning industry for Britain, because it is an innovative industry. It draws on the great advantage that this country has a scientific base. It draws on our people, who are able to serve the country and a special technical industry so well as a result of a good educational base.

1.0 p.m.

However, the question will be asked of me, and it would be asked of anyone who made the plea that I am making, whatever its success or achievements: why should pharmaceutical industry be given special help, albeit for a few more years? The amendment requests that it be given help, not for five or 10 years but for three years.

Let me give one reason why the pharmaceutical industry should be given special help. I believe from the figures that I have seen that if the Minister is prepared to extend existing patents for three years he will save this country up to £100 million, which will be lost if the Bill is passed in its present form. The patents that are presently covered could, if the amendment were accepted, continue for another three years, with this great export-earning potential for the country. If the Minister is not prepared to do that, we shall lose the opportunity and, what is more, welcome, so to speak, to this country competition from foreign copyists—not manufacturers who invest in research but manufacturers of pharmaceuticals who go around the world seeking to pick up patents and to muscle in when patents are running out.

It will cost £100 million if in the next five years we give away our existing patents to Italy, Romania and other Eastern European countries which have been waiting for us to let them slip through our hands. That will help not the Government nor the public but our foreign competitors. I do not wish to attack our bureaucrats, but I appreciate that what I am suggesting may not be helpful to them or to the lawyers, who like to see everything in its place, tidy and orderly, with no exemptions. It must be a nightmare to a lawyer for him to feel that there is a loophole or an exemption clause anywhere.

Mr. Clinton Davis

As one of the lawyers, may I say that we thrive on loopholes?

Mr. Crouch

Lawyers outside the Government service may thrive. I am thinking of the lawyers who serve the Minister and other Ministers and who like legislation to be neat and tidy, without exemption clauses and loopholes. I accept that my proposition is somewhat anti-lawyer, and I stand condemned. Perhaps I should withdraw. Perhaps I am guilty of untidiness. For once I feel a little dishevelled.

Mr. Clinton Davis

No.

Mr. Crouch

It is nice to hear that observation. As a non-lawyer, I am trying to make better law, not to please the lawyers. I am trying to improve the Bill and to safeguard research and technology in this country. A change of the sort that I am suggesting is needed if we are not to cut off our nose to spite our parliamentary face.

The pharmaceutical industry wants a little more time to enjoy its patent protection, without which it cannot exist. In Committee I asked for five years, but today's amendments are the result of our reflection on what was decided in Committee and on the Government's view, as expressed by the Minister. They take account of the Government's view and of the vote, although they did not defeat our proposition in Committee; they could only force a draw.

I realise that the Minister is anxious not to forget the rest of industry in listening to my plea for an exception to be made for one industry, no matter how strong my argument may be. I believe that he is aware that the sponsoring Department for the pharmaceutical industry, the Department of Health and Social Security, supports my case. The industry is seen by that Department as a valuable export earner and as being in a special position, not able to enjoy the full life of its patents like the rest of industry. It knows, as I know, that it takes between six and eight years for a new drug to pass its tests and be approved by the Committee on the Safety of Medicines before it can be sold to the National Health Service or abroad. That means that existing patents with five years or less to run will probably enjoy and profit from about eight years' instead of 16 years' protection from the copyists and foreign competition.

Like Oliver Twist, all I am asking for is a little more—another three years of patent life to give about 11 years of earning opportunity. I know that the Minister has had many serious representations made to him by the leaders of the British pharmaceutical industry. I know, too, that the National Economic Development Office, through its little NEDC for the industry, has written to him this week and to the Secretary of State lending support to my argument. The little NEDC is not simply comprised of manufacturers; it is a combination of manufacturers and trade unionists. It strongly supports the case, as I know from the letter, as does the sponsoring Department, which recognises the need to give the industry stronger patent protection for three years more than is provided for in the Bill.

Does the Minister agree that our case is fair and responsible and, most important of all, that the amendment would be of advantage to one industry, the pharmaceutical industry, and to the country as one of the leading developers and producers of life-saving drugs in the world? Although this is the eleventh hour, I hope that the Minister will pay regard to what I have said as fairly as possible and with as little emotion as possible.

Mr. Richard Wainwright

Since the commencement of the Register of Members' Interests, I have registered an interest in a company which, among other things, deals wholesale in medicines, but I hasten to add that that does not give me any superior knowledge or experience which I can offer the House. I mention it simply as a precaution.

I agreed so much with what the hon. Member for Canterbury (Mr. Crouch) said that I do not wish to take up time by repeating his argument. We are debating a matter which has a strict time limit on its operation. I do not think that the Government should make a great meal of it on the ground of a basic principle. It is a tidying-up process to deal with the transfer from one form of legislation to another. By its nature it is something that is bound to admit to differences of treatment and of attention to specific problems. If we were dealing with a provision which had to last as long as Parliament was willing to allow it to last, I should listen with greater care to the Government's view. I see no difficulty in using the law to make adaptations for a specific industry.

The CBI—TUC package is entitled to respect. It received respect in Committee and in the House. We recognise that intricate matters of this kind must sometimes be negotiated outside the House. We are willing to go along with that. However, in such negotiations between outside bodies, however august and powerful they are, the Government must take the precaution of warning the parties concerned that the matter is subject to the will of Parliament. That is not an empty phrase, because hon. Members are not as docile to their party Whips as they were, perhaps, a few years ago. They must warn that upsets occur in the House almost weekly and, more important, that the House of Commons is still a place where an extraordinary variety of experience and knowledge is available.

He would be a bold Minister who would forecast to people outside that a substantial measure would go through Parliament without several hon. Members throwing an entirely new light on the legislation and bringing to bear an experience which had not been available to those putting together the package in an honourable way outside the House.

This issue is a case in point. For the generality of companies and individuals the transitional proposals are reasonable, but the House has thrown up an exception.

Mr. Clinton Davis

Not only has the House of Commons thrown up the exception. The hon. Member for Colne Valley (Mr. Wainwright) would be the first to accept that he has articulated a case without any new facts. The debate in Committee did not produce any new concepts. It articulated a particular view.

Mr. Wainwright

That is not the way in which I look at it. I have no information, and I stand to be corrected, but I doubt whether, in the construction of the CBI-TUC package, the special circumstances of the pharmaceutical industry were ventilated as fully as they have been in the House. Even on a Friday it is important that the House should look carefully at new facts which have come to light since the construction of the package. There is no doubt that the Lords, through a vote, differed from the Government as the result of persuasive evidence put to them by a noble Lord who was not able to play a part in constructing the package.

However much deference we pay to bodies of influence outside, we have a duty to consider new circumstances that are brought to light. This is one of them. Since it is a tidying-up operation, I see no reason why obstacles of legal principle or fine points of definition should be raised against the arguments of the hon. Member for Canterbury.

1.15 p.m.

Mr. Clinton Davis

I have devoted a great deal of time and attention to this subject, as has my right hon. Friend the Secretary of State for Trade. We have not approached the matter as a bureaucratic effort to achieve a tidy solution. That is far from reality.

The House is entitled to take account of the background when it assesses the right solution to this difficult problem. Careful consideration has been given by industry as a whole through the standing advisory committee. I readily accept the doctrine enunciated by the hon. Member for Colne Valley (Mr. Wainwright) that simply because a committee, industry as a whole or the CBI and the TUC working together in tandem, has come forward with proposals the Government do not necessarily have to accept them. Ministers must make up their minds about what is in the best interests of the country and of industry as a whole. That is what I have tried to do, but I have not managed to satisfy the interests of the pharmaceutical industry.

To be fair to the hon. Member for Canterbury (Mr. Crouch)—I do not wish to withhold any evidence—he referred to strong representations that I have received from the API. He articulated those representations more eloquently than did that organisation. Its members are not parliamentarians, but they did a pretty good job.

I have received letters from the National Economic Development Office and, literally at the eleventh hour, from Dr. Kay of the National Research Development Council. That was a letter based on the assumption that the rest of British industry might not cavil at the proposal. It is a broad assumption which has not been tested. We have not had time to test the widespread reaction of industry to the selective treatment of the pharmaceutical industry. The hon. Member for Canterbury conceded that in Committee. Between then and now, a proper and extensive inquiry could not have been undertaken.

My objective has been rendered no easier because I am not a technologist. I am faced with the same problems as were described by the hon. Member for St. Ives (Mr. Nott) in Committee. He said: It is difficult for us, not having great knowledge of the industries concerned, or of the impact of our decisions about one industry on other industries, to judge whether this subjective special commercial pleading will be damaging to other interests."—[Official Report, Standing Committee D, 5th July 1977; c. 223.] The hon. Member put that elegantly and fairly.

However, having said that, we have to make decisions. [Interruption.] I have just overheard what I do not think was intended to be too private a comment. The Government have had three months in which to canvass the ideas of the rest of industry. What has just been said by the hon. Member for St. Ives is really not a totally fair statement, because, until this issue was raised very forcibly in literally the last few days, the view of the standing advisory committee and the view of the rest of industry was quite clearly that no exceptions should be made. I do not think that I am misstating the position in any sense.

Therefore, if the hon. Member for Canterbury is now arguing, as does the pharmaceutical industry in the documents that it has sent to hon. Members, that the rest of British industry would not be harmed, although that is a point that is made I am not satisfied that it constitutes more than an assertion, and a bare assertion is not necessarily the naked truth.

Mr. Nott

I was consulting my hon. Friend the Member for Canterbury (Mr. Crouch) just now. The point that I was making to him was that, as the Minister will recall, industry generally was hoping for the five-year period. To be fair to the pharmaceutical industry, it was arguing throughout, from the very outset, as I understand it, that it wanted a complete run-out, which is what we debated in Committee. Then Lord Lloyd of Kilgerran proposed in the other place the two-year compromise. When I was consulting my hon. Friend, I was merely making the point that the two-year compromise, after all, arose and was voted for by their Lordships a very considerable period ago. Therefore, the period of consultation, which the Minister says has been so limited, has extended not simply since the end of the Committee stage but since the end of the proceedings in the other place. That was all that I was consulting my hon. Friend about.

Mr. Davis

Not quite—because the position of industry has been very consistent throughout. Throughout the debates in the House of Lords and the period following the debates there up to the point at which we were discussing the matter in Committee, there was a view that there should be no selectivity of approach here. I understand that there is some softening of attitude on the part of the CBI in that it is adopting a neutral posture. It is certainly not coming out in favour or against this.

I cannot adopt a neutral posture in this matter. I think that my point is absolutely right. I hope that to some extent I shall be able to help the hon. Member for Canterbury in what I shall be saying shortly. It will not help him in relation to the Bill, but it may help in reflection after the Bill has been enacted, as I hope it will be.

First, perhaps I ought to summarise the arguments that I have adduced for rejecting a powerfully argued case. First of all, there is the principle which I put to the Committee and which was not seriously argued against. That is that the principle that all patents should have the some term is an important one. It is not a matter purely of administrative convenience, but it recognises the importance of trying to do justice in the matter of the term as between one branch of industry and another. To accept the logic of the ABPI argument—although it has not been argued at all; the contrary has been argued today—about the maintenance of export earnings and so on may point to a perpetual term for pharmaceutical patents. This has not been pursued by the hon. Gentleman, who was at pains to avoid doing that.

Secondly, if we were to accept the proposals, as things stand at present it would unquestionably undermine the basis on which the consultations with outside interests have taken place. Industry has twice expressed its support through the standing advisory committee for a policy on the term of existing patents which was a compromise between differing views of various parts of industry. We adopted that policy. To give favourable treatment to one sector of industry without the most careful regard for and consultation with the rest of industry, which is bound to take time, would be a very dangerous thing to do.

The hon. Member poured some scorn on the third point that I now make. That is the question of legal and administrative problems that might arise if one applied the selective approach. Frankly, I am not deeply concerned about that. I think that if the right decision was to provide for some selective form of approach and it led to bureaucratic difficulties, so be it. I raise no particular objection to that. However, we also have to look at the other side of the coin, which is what sort of problem would spring from inevitable uncertainties which could develop from this position. The problems would affect not only, or even primarily, the Patents Office. I think that they would affect the chemical industry far more widely through the uncertainties that would be created.

Fourthly, it is far from fair to say that the Government have ignored the interests of the pharmaceutical industry. I think that the hon. Gentleman, on reflection, will concede that we have provided for the protection of medical uses of known compounds, in Clause 2(6), in a form of protection which is uniquely available to the pharmaceutical industry. We have not sought to reinstate in the Bill the special compulsory licence provision, which was the old Section 41 of the 1949 Act. It was removed in the House of Lords, and on mature reflection I think that that was a proper decision. We have also provided a 20-year term for new patents and the great majority of existing patents. In that way, therefore, we have met at least part of the case.

In the specific comments that the hon. Member made this morning, he argued substantially the case that I have just dealt with, or tried to deal with, but he raised one or two points that had not been made previously.

On one of the points, he posed the question "Why should successful industry be given special help for three years?" He then went on to talk of a saving of perhaps £100 million to the country, which would be lost if the Bill went through. That argument has never been put to me by the industry. It was only on 19th July that I saw the Chairman of Glaxo and six others, who, significantly, did not raise that argument with me. Certainly the figure was not mentioned. They have raised the question of the possibility of loss of export earnings, but no figure was mentioned.

Mr. Crouch

Is the hon. Gentleman saying that, if the Chairman of Glaxo and representatives of the industry had made those claims, he would have been more receptive to them than he has been when they have come from me? I have made my own research into the matter.

Mr. Davis

I am always receptive to the hon. Gentleman's constructive arguments. He has tried to be helpful. I am merely saying that it is somewhat significant. The fact is that here is a powerful argument, and it is somewhat significant that it was not raised previously.

But that is a figure that has been plucked out of the air. I do not know where the hon. Gentleman has produced it from, what authorises the use of the figure £100 million and what are the ramifications elsewhere. It is not all one-way traffic. This constitutes part of the difficulty in dealing with this matter. There are likely to be serious ramifications in other spheres of British industry, otherwise the objections would not have been raised in the first place.

Mr. Nott

I really do not want to be too controversial at this stage, but what the Minister said was "substantial ramifications in other parts of industry". That is just the point that we were trying to elucidate in Committee. What are these substantial ramifications in other parts of industry? It is that upon which the whole argument turns. We do not know what they are.

Mr. Davis

I have to act on the basis of evidence that is produced to me, and I have no specific knowledge myself about these issues. However, I am advised—this was the point canvassed by the standing advisory committee—that if one were to benefit the pharmaceutical industry in this way, although it is conceivable that there might be some advance in export earnings derived in this way, the corollary, however, was that losses could be derived in other efforts of British industry. There were dangers for British industry in doing that, because there was the possibility of opening up avenues for foreign interests in this country which are difficult to quantify—in fact, I think, impossible to quantify. That is the general point that I am seeking to make.

1.30 p.m.

I now go on to be a little more constructive. I told the hon. Gentleman that I should try to do that. The probable commencement date of the Bill is 1st June 1978. I should not at this stage, on the basis of the inadequacy of evidence available, be prepared to agree to the amendment. What I am, however, prepared to offer to the whole of industry is that, against the background of a Bill having to be introduced at fairly short notice to ratify the European Patent Convention, I cannot assert that I have all the answers right. I should be an absolute fool if I were to do that in this area of high technology.

If, over the next six months or so, I can be convinced that the case for the pharmaceutical industry is accepted without damage to other industries, if I can be satisfied that the other points that I have elucidated in Committee and here today—points one to four—can be met, I think that, without giving any undertaking or commitment at all, it would be right for the matter to be re-examined, and possibly even for further legislation to be introduced. However, I am bound to tell the hon. Gentleman that it is a case that has to be much more powerfully argued than has been done hitherto.

It is right that the standing advisory committee should investigate this matter deeply in the course of the next few months. The industry should be fully consulted. I am not suggesting that I have any degree of amour proper. If I am shown reasonably to have made a wrong decision, I shall not hesitate to admit that, but, on the evidence that has thus far been adduced, I cannot believe that I have got into that situation.

I cannot promise new legislation, but I think that this is a matter that is deserving of further study. There is an opportunity for such study. Whether that will produce the results that the hon. Gentleman wants, I have no idea of knowing at this stage, but I hope that in the light of that he will feel able to withdraw the amendment.

Mr. Crouch

With the leave of the House, perhaps I may reply to the Minister. I was interested to hear his response to the arguments that I advanced. At one stage he described my presentation of my case as powerful, but at another stage he said that it was not powerful enough. I confess that I have no more guns available this morning.

The Minister has not accepted my amendment, because of his concern for the whole of British industry, and of course as the Under-Secretary of State for Trade he has that responsibility, but I have sought to put forward my arguments on the basis of the trade advantages to the Government and to the country of what I am proposing. The Minister has not been convinced by what I have said. Nevertheless, he has said that he does not want to shut the door altogether.

The hon. Gentleman remembered at the last moment that he is one of the Ministers responsible for trade matters. I quoted some figures. The hon. Gentleman said that he had not heard them before, and that there was not adequate evidence to support them. I said that if British manufacturers were not able to operate their existing patents for three years, between £50 million and £100 million would be lost on earnings abroad. It is difficult to justify trade figures of the future, but one can look backwards, and I am drawing on the experience of the past.

This industry has earned a good deal of money abroad across the balance of payments. Last year alone the figure was £313 million. I can remember when the figure was only £100 million. The industry is advancing considerably. Only recently the Secretary of State for Social Services, when addressing the annual meeting of the pharmaceutical industry, declared that he was so pleased with its export achievements that he was calling on it to achieve something further, to raise the figure beyond £313 million net profit to this country and to make it £400 million or more.

I believe that the Minister may be losing some of that advantage—be it £50 million or £100 million. I cannot say what it will be, but certainly a substantial figure could be lost across the balance of payments. Copyists will get at these British patents, which are the result of British science, work, technology and investment.

At this last minute the Minister has said that his mind is not closed. We must be grateful to him for that, and I am personally grateful for his statement. I feel, however, that at this last minute he could have made a judgment and come down on my side. Ministers are meant to lead their Departments. I should have liked the hon. Gentleman to lead his Department and say "This is a good argument. It is powerful enough for me. I think that the hon. Gentleman has sustained his case." However, the Minister wants to look at the matter again, and I am grateful to him for that.

I do no know how the Minitser can do anything to deal with this problem under the Bill unless he accepts the amendment. There is nothing in this measure that will affect any future decision by the courts. They have to go by what is in the Bill.

Mr. Clinton Davis

I tried to make it plain that nothing could be encompassed within the provisions of the Bill. What can happen is that, at the very best from the hon. Gentleman's point of view, because the probable commencement date for the substantive provisions is 1st June 1978, there is time for further mature reflection, but I want the hon. Gentleman to be in no doubt that any changes would need further legislation.

Mr. Crouch

I have a feeling that we may have time in the new Session for a small piece of legislation. I shall have my begging bowl with me. I shall be here as Oliver Twist, asking for a little more. I am sorry that the Minister is not prepared to make this a heyday for me, because this is the first time that I have spoken to him from this Dispatch Box and the House, unfortunately, has not filled up as I had expected it would.

I am grateful for small mercies. I am grateful, too, to know that the Minister will look at this again and that there will perhaps be nine months in which the matter can be considered.

Amendment negatived.

Mr. Nott

I beg to move Amendment No. 49, in page 113, line 1, leave out subparagraphs (3) and (4).

Mr. Deputy Speaker (Mr. Oscar Murton)

With this we may take Government Amendment No. 51.

Mr. Nott

These amendments could be closely related to the debate that we have just had on pharmaceutical patents. My amendment has not been tabled solely to meet the difficulties that we have been discussing, but it is relevant to our earlier debate. We are not entirely satisfied that the Government amendment meets fully the point that concerns us, because we are here introducing a new set of laws for patents, and in the process of doing so are changing a recognised system under the old law.

I am sure that the Government Chief Whip, who is talking to the Minister, would like to know that we are drawing to a speedy conclusion, but I hope that the Minister will listen to my last remarks, because this is an important point. As I understand it, under the old law there was a recognised system that enabled individual companies and persons to apply to the court for an extension of a patent on the ground of inadequate remuneration. One could apply for an extension up to five years, or in an exceptional case there could be an extension of up to 10 years. Under the present system the pharmaceutical industry and other industries have made applications to the court on the ground of inadequate remuneration.

However, under the Bill the full processes available under the existing law will not be available. As my hon. Friend the Member for Canterbury (Mr. Crouch) has pointed out clearly, we are here dealing with existing arrangements by a reform of the law. We do not feel that anything contained in the Bill should be made retrospective or confiscatory of existing arrangements. My serious point to the Minister, to which I know he is listening is one to which we may well ask our noble Friends in another place to return.

The Minister has said that he cannot go along with my hon. Friend the Member for Canterbury in meeting the case of the pharmaceutical industry in the Bill but that he will be prepared to consider new legislation. No doubt he attends what is known as the Legislation Committee—if mentioning the fact that it exists does not breach the Official Secrets Act —and he will know what kind of reception he will have in that Committee if he comes along before June with a proposal to bring in new legislation to amend the Bill. I do not think that he will have a great welcome from his colleagues.

The Minister and I know that the likelihood of either coming to the right decision or getting the legislation through is not very high. Why does he not therefore consider this amendment? It is not intended to be a compromise. I do not suggest for a moment that our amend- ment will meet the wishes of the pharmaceutical industry, but it will remove a certain retrospective element—I use the term fairly and accurately here—in the new law.

I do not wish to press this amendment today, but I wish to tell the Minister that his Amendment No. 51, to leave out subparagraph (4), does not meet our point, because he intends to leave in sub-paragraph (3). It would have been right and proper, since the case of the pharmaceutical industry in the last group of amendments has not been attached to the Bill, to accept this amendment.

The period for which a patent may be extended, on application to a court, is reduced to four years under the new procedures. The right to go to court because of inadquate remuneration has been effectively reduced. We are asking that it should remain the same in the new arrangement as under the old Act.

The right to go to court because of inadequate remuneration should include the right to apply for an extension for up to five years, or up to 10 years in exceptional cases.

I shall take an example from the pharmaceutical industry. If there is an extremely valuable patent over a particular drug, and this drug is bringing major balance of payments and other benefits to this country, the running out of the patent would allow an Italian pharmaceutical company, for example, to copy us and sell the product in the United Kingdom, as well as being able to compete abroad. I am making large assumptions here, but the result of the Italian firm being able to sell the products in the United Kingdom would be substantially to reduce the remuneration of the British pharmaceutical company, so that its remuneration became inadequate. The pharmaceutical company would then be able to go to court pleading inadequate remuneration and possibly get an extension of up to 10 years if it was an exceptional case.

1.45 p.m.

I do not think that this would meet all the wishes of the pharmaceutical industry, but we could expunge the restrospective and the confiscatory elements from the Bill by accepting the amendment, if not in this House then in the short proceedings that are coming in the Lords.

Mr. Clinton Davis

The policy that we have enunciated in relation to the Bill is that patents should have an unextendable term of 20 years and that the same should apply to new existing patents, those with five years or more of their 16-year term to run.

In so far as the term of old existing patents can still be extended after the appointed day, it therefore seems logical that the maximum extension should not result in a total term of 20 years, otherwise potential competitors of the patentees would be more at risk from an old existing patent than they would be from a new existing patent.

I recognise that there is an argument that the Bill retrospectively and unfairly deprives old existing patents of a potential 26-year term, but so it does new existing patents, to which the amendment does not apply. Therefore the amendment stops short of its own logical conclusion.

I do not want to make an unfair point here. I do not think that the hon. Gentleman is arguing that his amendment is the last word in drafting. In practice, applications for extensions have proved very rare. Not a great deal may turn on this amendment either way. My reason for resisting it is that it has long been announced Government policy that no patents should have a term of more than 20 years after the new Act comes into force and that to make the proposed change at this late stage in the passage of the Bill might work to the disadvantage of those who expected the announced policy to be implemented.

As far as I am aware, this is the first occasion that an amendment having this effect has been moved. It was tabled in Standing Committee—I think it was then Amendment No. 162—but it was not called. That amendment had the same purpose as the present amendment. It is very late in the day, and I think that the logic of the amendment is very dangerous. The same arguments that I have adduced before, about consulting industry, apply to this question. It is not possible between now and further consideration of the Bill in another place, to consult the industry to ascertain the views of those in it. It may be a matter for further reflection by the standing advisory committee.

Mr. Nott

The Minister has made some interesting points, and some of them are valid. I cannot remember why we did not deal with this matter in Committee. I have to accept that if we were now to accept the amendment it could raise the sort of problems that the Minister mentioned. I confess that I had not appreciated the full implications of the amendment. I believe that it would probably be unwise to press it at this stage. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 51, in page 113, line 6, leave out sub-paragraph (4).—[Mr. Clinton Davis.]

Mr. Clinton Davis

I beg to move Amendment No. 52, in page 113, line 16, leave out from 'to' to second 'and'in line 17 and insert: 'section 25(3) to (5) above'.

Mr. Deputy Speaker

With this it will be convenient to take Government Amendment No. 53.

Mr. Davis

These amendments have the effect of making the conditions under which existing patents will be renewed those of the Bill rather than the corresponding provisions of the 1949 Act. I need not enunciate the reasons.

Amendment agreed to.

Amendment made: No. 53, in page 113, line 19, leave out from 'under' to 'except' in line 21 and insert: 'section 25(3) to (5) above'.—[Mr. Clinton Davis.]

Mr. Clinton Davis

I beg to move Amendment No. 54, in page 113, line 31, after 'shall', insert: 'after the end of that year'. The amendment is needed to make clear, in relation to new existing patents the term of which is increased from 16 to 20 years, that the provision transforming exclusive licences into non-exclusive licences has effect only after the end of the sixteenth year of the patent.

Amendment agreed to.

Mr. Nott

On a point of order, Mr. Deputy Speaker. We should be happy for the Minister to move the remainder of his amendments formally, if that would be acceptable to the House. We have followed them. I know that other hon. Members wish to carry on with further business. I shall wish to speak on Third Reading, but we have no objection to the remainder of the Government amendments being taken formally.

Mr. Clinton Davis

I am grateful to the hon. Gentleman for that intimation. We are agreeable if you are content, Mr. Deputy Speaker.

Mr. Deputy Speaker

So be it. I think that the best thing to do is for me to call the numbers of the amendments, and if any hon. Member desires to halt me in the process, I shall be pleased to be halted.

Amendment made: No. 56, in page 114, line 28, at end insert 'for that patent '—[Mr. Clinton Davis.]

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