HC Deb 22 July 1977 vol 935 cc2069-77
Mr. Mikardo

I beg to move Amendment No. 19, in page 34, line 20, leave out from 'shall' to end of line 37 and insert: 'be taken to belong to that employee for the purposes of this Act and all other purposes, unless the employer can show that the invention was made in the course of undertaking or managing research work for which the employee was employed or in the course of a specific project on which the employee was working and the circumstances in either case were such that an invention might reasonably be expected to result from such work: Provided always it shall not be presumed against an employee that an invention is ex- pected to result from the carrying out of such work unless it is specified in his contract of employment. (2) Where an invention made by an employee is deemed under subsection (I) above to belong to the employer and where the employer having patented that invention has not within a period of two years from having been awarded the patent fully worked that patent, the comptroller, upon application by the employee, shall revoke the patent and assign it to the employee who made the invention.'. I shall detain the House for only a few minutes in moving this amendment. I do not need to do more than that, because it covers an area that was widely and exhaustively canvassed in Committee and to which hon. Members on both sides gave earnest and close attention. It would be wrong if I did not begin by expressing appreciation to the Government for having introduced provisions for the protection of the employee inventor, because such provisions had not previously existed and do not today exist in our legislation. My only regret is that, having done that—they deserve full marks for having done it, especially as it must have been difficult to draft these provisions—they did it half-heartedly, not full-heartedly. They have used a number of catch-all phrases in the Bill—that is the only way they can be described—which considerably weaken the position of the employee inventor against his employer in a number of circumstances.

We moved many amendments on this matter in Committee. My hon. Friend the Under-Secretary of State did not argue that the amendments were wrong. His argument all the time was that the drafting was a compromise agreed by what he called "both sides" and that it would be wrong to upset that compromise.

I should explain what is meant by "both sides". They comprised a group of people who were representative of a number of organisations. There were two who might be expected to look after the interests of the employee inventor and a much larger number who might be expected to take the opposite view. In other words, it was an unbalanced, one-sided Committee. It was not a compromise. The Committee was weighted heavily in one direction. Therefore, I do not find it easy to accept the answer so frequently given by my hon. Friend, and supported by Opposition Members in Committee, as a substantive answer to the points that we made in Committee.

12 noon.

I found it not altogether surprising, and in many ways indicative, that the great majority of my amendments were voted down in Committee by a majority which consisted of the Minister, the Whip and hon. Members opposite, the minority consisting of the rest of the Labour Members on the Committee. There is some significance in that and it will be noted in a number of quarters.

Mr. Richard Wainwright

Perhaps the hon. Gentleman would like to sharpen up his definition in speaking about "hon. Members opposite" in the context of what happened in Committee, because I was glad to support many of the hon. Gentleman's amendments.

Mr. Mikardo

That is absolutely right, and I am grateful to the hon. Gentleman for that and for now reminding me about it. I always find it difficult to consider the hon. Gentleman as a member of an Opposition party and, therefore, I did not include him in that general condemnation.

My last point is a practical one and it is about the danger that exists—it is not a theoretical danger, because anyone who has worked in a high technology industry for any length of time knows that it has happened repeatedly—that an employee's invention may be taken over by his employer and then sat on and no patent taken out, or else the patent is taken out but nothing is done about it. There are many authenticated and well-documented cases in which this has happened. If that happens, the employee gets nothing.

It was for that reason that I moved a number of amendments in Committee which were designed to secure that when that happened the employee would still receive some benefit. I did not succeed in Committee. That is why I have moved this amendment, which is intended to achieve the same conclusion by a different means.

It is in the interests of British industry that a worthwhile invention should not be thrown into a bottom drawer and the drawer locked upon it. The inventor loses through that, and so does the eco- nomy of the whole nation. We ought to do everything possible to discourage this practice. Sometimes an employer has a legitimate interest which means that it would be to his advantage not to pursue the invention. That is his business, and if he chooses to follow such a line no one has the right to interfere. However, the employee should have the right to have his invention back so that he can develop it if he wishes to do so and if he can find somebody willing to help him.

Mr. Nott

As the hon. Member for Bethnal Green and Bow (Mr. Mikardo) said, we debated this in Committee, so I shall make only a short intervention. Contrary to what the hon. Gentleman implied, my hon. Friends and I are extremely pleased that the position of the employee inventor has been substantially improved in the Bill. We entirely accept that under the arrangements that hitherto applied the employee inventor was not adequately safeguarded and treated. That has been our position throughout.

I am sure that the hon. Gentleman will not disagree with me when I say that the only question that was raised in Committee was about the balance in the Bill between the interests of the employer—that includes the interests of the whole company, its employees and shareholders —and the interests of the single employee inventor. I do not agree with the hon. Gentleman that the panel which considered the matter of balance was one-sided. It contained representatives of the trade unions.

During the course of the debate on the Bill in the Lords, I had to persuade a number of employers and representatives of large companies not to press their side of the case further, to accept that the balance between the interests of employer and employee which had been achieved was about right, and that it would be mistaken, given the progress that had been made with the Bill and the fact that we wanted the Bill—I know that the hon. Member for Bethnal Green and Bow wants it to—not to leave the Bill as it was and to reopen the question of balance.

The amendment that the hon. Gentleman has just moved in a rather low key fashion shifts the balance much further in the direction of the employee. It would make the operation of companies in many fields of research, design, production and development largely unworkable. I must repeat the point I made in Committee that one must look at the activities of employees and employers within a firm as being essentially a team exercise. If too much emphasis is placed upon the rights of single employees, it will detract from the interests of other employees and the prosperity of the firm. It will therefore interfere with the prospects of other employees.

The balance in the Bill is right. I know that the Government take the same view, and I therefore cannot go along with the amendment. I shall not go into specific reasons now, because no doubt the Minister will wish to say a few words on that.

The hon. Member for Bethnal Green and Bow was right about one thing even if he was not correct about anything else. He was right in excluding the Liberal spokesman from his phrase "the other side". The representative of the Liberal Party who is here today should be sitting alongside the hon. Gentleman. The Liberal Party is now in full support of the hon. Gentleman, Labour policies and political attitudes. I therefore congratulate the hon. Gentleman on the manner in which he made his statement because he was, as always, accurate, although I do not entirely share his political beliefs.

Mr. Mikardo

The hon. Member for St. Ives (Mr. Nott) is having a nice bit of fun about the Lib-Lab pact but he is up the wall about it. I made exactly the same references to the hon. Member for Colne Valley (Mr. Wainwright) several years ago, before the Lib-Lab pact had ever been dreamed of.

Mr. Nott

I do not suppose that the hon. Member for Colne Valley (Mr. Wainwright has much changed his political views over a long time. However, I was referring to the Liberal Party, which is now in alliance with the hon. Member for Bethnal Green and Bow and his hon. Friends, so we should leave the matter there. I do not agree with the amendment for reasons that I gave in Committee, but I shall not extend the debate further now.

Mr. Clinton Davis

I do not propose to follow the remarks of the hon. Mem- ber for St. Ives (Mr. Nott), except to say that he is being churlish, insensitive and unrealistic and that I hope that his attitude will eventually receive the attention from the electorate that it deserves.

My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) and the hon. Member for Colne Valley (Mr. Wainwright), as well as some of my hon. Friends who raised the matter in Committee, have done a service to the House because it is right that attention should be focused on this important issue. I am grateful for the remarks that my hon. Friend the Member for Bethnal Green and Bow made about the introduction of the scheme. My hon. Friend was absolutely right, because if the Government had chosen the soft way out—and that way was open because we were under no great prssure from industry to do this—and if this initiative had not been seized by the Government, these provisions would not be in the Bill.

This proposal was the result of consultations on a wide scale, not restricted simply to the working group. People were at liberty to formulate their own views. Therefore, I find it rather surprising that, if the trade union movement as a whole felt as strongly as my hon. Friend feels—that the package needed to be beefed up—its representations were at such a low level, so low, indeed, as almost not to be heard at all.

Although my hon. Friend does not altogether applaud the fact that the working group was established, I believe that it was necessary. It was not as unrepresentative as he suggests. It was broadly representative of the various strands of interest. It could not be too large an organisation. The employee inventor's interests were represented by the TUC and Institute of Patentees and Inventors representatives. I cannot accept that it was unevenly balanced. Nor can I accept that its conclusions, which were closely argued. ought to be rejected.

This must be seen against the background that not all the participants were enthusiastic for the aims or conclusions of the working group. But a consensus was achieved. It is noteworthy that it was achieved in the circumstances. It was a compromise. If the working group had disagreed, the position would have been infinitely more difficult. I believe that the Government are right to assert that they should be slow indeed, unless the evidence was overwhelmingly the other way, to undo the package arrived at.

Having appreciated the fact that we have gone further than ever before, my hon. Friend says that we have weakened the position of the employee inventor as against his employer. That is not a fair summation of the situation. The hon. Member for St. Ives was right to say that if we had reopened the whole issue there would have been considerable demands, by those opposed basically to what was happening in opening up opportunities for employee inventors, to reopen that issue too. That would have been a grave error. It would have imperilled the passage of the Bill, and in the light of its fundamental importance in the context of ratification of the European Convention it would not have been justifiable to take that risk.

I do not believe, however, that the Bill will have the effect that my hon. Friend suggests. One must also remember the collective agreements. The steps towards collective agreements in this matter will probably cover the position of many employee inventors who are trade unionists and are covered by working agreements. These provisions will not touch them. I do not think it necessary for me to underline the philosophy of these provisions, but I must deal with the amendment because it is not enough simply to oppose it on Report as a matter that was simply dealt with upstairs.

My hon. Friend would change the whole balance in favour of the employee inventor—at least supposedly, because, again, I think that the point taken by the hon. Member for St. Ives is a good one. If we did that to the extent that I think would be achieved by the amendment, it would be capable of giving rise to a good deal of resentment on the part of other employees. It could be divisive, and that would not be in the interests of the employee inventor or of British industry.

12.15 p.m.

The other point that my hon. Friend omitted to mention is the compulsory licensing system set out in Clause 48, in particular in subsection (3), which sets out the grounds on which a patented invention which is frustrated through the inactivity or idleness of an employer can be used. That is an important facet of this package.

The amendment also contains a proviso to the proposed new subsection (1). It reproduces Amendment No. 57 moved by the hon. Member for Colne Valley in Committee. That amendment was negatived. I said then, and I repeat, that I appreciate the concern that the proviso shows for the interests of employees, but it is aimed at a target that is simply not there. It seeks to negative a presumption which does not exist. I do not believe that the courts would presume against an employee anything of the kind alleged in the proviso. There is no such presumption, and even if there were, like all other legal presumptions, it would be rebutted with proof to the contrary.

There is more to the substance of the proviso. It would not be right to make the presence or absence of a term in the contract of employment conclusive on this issue. I cannot believe that that would be justifiable. An employee's duties are not unchangeable. They change from time to time, and there must be flexibility. It would be a great inconvenience, to put it no higher, to industry if, instead of getting on with the job, employers and employees had first of all to renegotiate all the terms of the employee's contract of employment and while that lengthy process was going on a competitor, domestic or foreign, could gain decisive advantage. What we are seeking to achieve—letting the parties get on with the business in hand—is, we believe, the right approach on this aspect.

I believe, too, that such a proviso as part of one law would bedevil industrial relations. It would lead some employers to require of new employees an agreement to a term making inventions that they might achieve the property of the employer whether or not there was real prospect of an invention resulting. Even where that was not done, employers would surely hesitate to embark on a renegotiation of an employee's contract of employment. They would surely tend to give the work to those employees whose terms of contract they considered most satisfactory to themselves. This could lead to the best man for the job not getting it. That would constitute a source of frustration to the employee as well as to his employer and could hardly be said to be in the national interest.

Having regard to the tremendous variety of circumstances in which inventions are made by employees, I believe that the wording of Clause 36 gets as near as possible to resolving the issue of ownership and if we made the test more rigid, as by limiting cases in which the employer is the owner to those involving research work—I do not know what "research work" in this context really means—it would lead to the practical difficulties I have referred to.

My hon. Friend's proposed new subsection (2) is similar in substance to the latter half of Amendment No. 224 that he moved in Committee. That amendment was fully discussed before it was negatived. I need not rehearse the arguments again, because he has chosen not to do so today, but I hope the House will find that what the Bill proposes is a satisfactory way to deal with the matter.

I believe that the compromise which has been worked out will confer considerable advantages on employee inventors. We should be very slow to try to unravel them. The risks are too great. I believe that the Government were right to avoid unnecessary division on this issue and that if the unions had felt that the employee inventors they represented would be seriously disadvantaged they would not have been slow to react. I hope, therefore, that my hon. Friend will not press his amendment.

Amendment negatived.

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