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Amendment made: No. 2, in page 16, line 28, at end insert—
'In section 106, in the heading, the words "under s.40".'.—[Mr. Sutcliffe.]
§ Order for Third Reading read.
1.12 pm§ Mr. SutcliffeI beg to move, That the Bill be read the Third time.
I am grateful to hon. Members for their contributions on Report, especially the right hon. Member for North-East Hampshire (Mr. Arbuthnot), who was the architect of the thought pattern behind our second amendment. I thank him for that.
Our debates on the Bill have been interesting and well argued. On Second Reading, some reservations were expressed about the Bill, but it is fair to say that it was, by and large, welcomed on both sides of the House and I am pleased that hon. Members on both sides of the House have examined it in a constructive and detailed manner, both in Committee and again today. I thank them for that.
I shall make a few remarks before I commend the Bill to the House. The Government fully understand the importance of giving support to innovative and creative UK businesses. The patents system is one important way in which that support is provided and the Bill will help to ensure that our patents system is robust in its operation, while also being well-balanced and accessible to all. We are committed both to ensuring that protection continues to be available for those businesses that have the creativity and drive to make technical advances that help us all and to improving and modernising the patents system so that it meets the needs of its users.
As hon. Members know, the Bill brings our law into line with the revised European patent convention. I am, of course, pleased that it has been broadly welcomed for doing so, as there are significant advantages for UK businesses. The House will be aware that the Bill also makes some changes which, we believe, will help in the difficult area of the enforcement of patent rights.
As I said on Second Reading, we are much more alive to the concerns expressed by patent holders, especially patent holders in small and medium-sized enterprises, 1426 about the costs and time associated with patent litigation. In that debate and in Committee, we heard the view that the enforcement measures in the Bill do not go far enough to address those problems, especially in helping SMEs.
We believe that the changes we are making will certainly help all types of business, in particular SMEs, to resolve disputes over patents. We debated in detail clauses 12 and 13—two of the important ways in which the Bill will amend existing patents legislation, to help with the resolution of patent disputes.
I promised to consider the careful analysis made in Committee by the right hon. Member for North-East Hampshire of the relationship between clause 12, the Brussels regulation and proceedings for declaration of non-infringement. It is fair to say that although his analysis is, in essence, correct, his proposed solution would, in our view, undermine the delicate balance provided by the threats provisions—merely to circumvent the way in which the Brussels regulation applies in respect of proceedings for declaration of non-infringement. We should accept the operation of that regulation, and its effect on businesses operating in a global market.
The Bill is but one of the ways in which we are trying to improve patent enforcement. We realise that we cannot be complacent about the enforcement of intellectual property rights. Some new initiatives are being explored, and possible ways of addressing certain difficulties are being considered. We will continue to explore other possible ways to help patent holders enforce their rights, and to help patent holders and third parties resolve disputes over patents.
That exploration will not end simply because the Bill may be nearing the completion of its parliamentary journey—far from it. For example, there is our continued work on the patent enforcement project, and the results of the Patent Office-led study into that project will, as I indicated in earlier debates, be available shortly. We will no doubt look carefully at those results and how best to take them forward. To give another example: we have already said, during deliberations on the Bill in another place, that we will monitor the ongoing improvements to the patents county court to ensure that it provides access to a simpler, less expensive forum in which to litigate patent disputes.
The Government's innovation report, published at the end of last year, provides another example of our commitment not to let those issues pass us by. In addition, the joint project of the Prime Minister's strategy unit and the DTI on wealth creation from innovation and the knowledge economy will include an analysis of the current regime of intellectual property rights and their role in encouraging innovation in the knowledge economy.
We also had an interesting debate on the pronunciation of the word "patent". Colleagues with an interest in the Bill referred to it as the parents Bill and the patients Bill and there was much discussion of what it was actually about. However, the measure is vital.
§ Paul FlynnMy hon. Friend will remember the outrageous suggestion that I tried to pull the wool over the eyes of the Committee by saying that the 1,000 people in Newport who have to say "patent" hundreds 1427 of times a day decided that as it took three nanoseconds more to pronounce it with a long "a", they would pronounce it with a short "a" so that they could go home earlier for their tea. The outrageous and flimsy counter to that truth from the right hon. Member for North-East Hampshire (Mr. Arbuthnot) was to suggest that the Romans pronounced the word differently. How does he know that? Can he explain?
§ Mr. SutcliffeI await the reply with interest. I congratulate my hon. Friend for his involvement in the Committee and I also thank the Patent Office in Newport for its excellent work and its support to industry.
In conclusion, I am proud that the Bill plays a part in the continual process of reform and improvement of the patents system—a process that can be traced back four centuries and which will no doubt continue. Our deliberations have truly been part of the long-standing and admirable tradition of making sure that patent law keeps pace with changes in the economy. We will continue with that process, to ensure that the patents system supports and encourages innovation, for the benefit of everyone.
I commend the Bill to the House.
§ Mr. ArbuthnotThe Bill deals with something extremely important to our national economy: innovation and scientific advances. At the Lisbon summit in 2000, the Council of Ministers told us that Europe would become the most competitive and dynamic knowledge-based economy in the world by 2010. That is what the Bill is about. Well, jolly good. So why are we going so fast in the opposite direction? Why did a survey in May by the Swiss business school IMD show that the most competitive economy in the world was that of the USA, and that the UK had fallen another three places to 22nd? Why do we have the lowest growth in the English-speaking world? Why has our productivity collapsed in recent years? Why do we have the largest trade deficit for 300 years? One reason is that we have a Labour Government. Another reason is that this country's patents system is not in tune with that of the modern world.
Britain is falling behind in Europe. The Financial Times said in an article in 2001:
Bottom of the pile for patent enthusiasm was the UK, where only 23 per cent"—of small and medium-sized enterprises—had used the systemThat compared with more than 50 per cent. in Spain. Europe is falling behind in the world. In the USA, taking out a patent costs £10,000. In Europe, it costs about £50,000. In the USA, it takes about a year to take out a patent. In Europe, it takes three years. All that is partly because of the costs of translation, but they only amount to about £12,000 of the £50,000 that must be paid in Europe.Enforcing patents is very difficult in this country. As we have heard, the patent reform group has been trying to put pressure on the Government to do something to help, and they have come up with the Bill, which will achieve little and deals with none of the real concerns of 1428 the business world. It is, as the Minister said, a necessary Bill because it introduces some minor changes to allow Britain to continue to be a signatory to the European patent convention. If we failed to do that, British inventors would have to take out lots of patents in many different countries in Europe, which would be expensive and time-consuming. There is no point in trying to force them to do that, but no one could say that it is a frightfully important Bill.
I come now to the key issue raised by the hon. Member for Newport, West (Paul Flynn)—the pronunciation of the word "patent", a matter that exercised the Committee for some time. I said that he had led the Committee and the House up the garden path in suggesting that his constituents were supposed to get home earlier to tea, but I am afraid that he has got me wrong: I was agreeing with his pronunciation of the word "patent", on the basis that the Romans would have pronounced patens—meaning, "open"—with a short "a". I just think that he got his reasoning wrong.
We do not oppose the Bill. How could we oppose it? There is virtually nothing in it, and it represents a sadly missed opportunity.
§ Malcolm BruceI am conscious of the fact that another hon. Member wishes to speak, and I will allow him the time to do so.
The Bill is rather disappointing, given that there was a pretty ferocious debate about what people had hoped for. Many hon. Members' core concern is that the reason why there is a lack of enthusiasm for patents in this country is that people do not have enough confidence that they can enforce them. The cost of enforcing patents is so great that is raises the question whether the cost of registering is justified. The Committee addressed that issue, and I am disappointed that the Minister, having been unable to accept one or two of the amendments that I proposed—I understand the reason why—was not able to develop them in ways that would have met those concerns more than the Bill currently does.
First, we discussed frivolous patents, or vanity patents, and tried to suggest a way to deal with them so that the time, energy and cost were not expended on them. My hon. Friend the Member for Weston-super-Mare (Brian Cotter) entertained the House on Second Reading with examples not of bogus patents—they were fully approved—but of bizarre, irrelevant and rather unworkable ones. Secondly, I remain seriously concerned about the inequalities of defending patents for small and medium-sized companies. It was pointed out and not really challenged that the vast majority of new ideas come from small businesses, which may become larger businesses if they can patent the idea and develop that patent. I cited the example of Mandy Haberman, who invented the "anyway up" cup. I guess that, at the end of the day, she needed the benefit of the defence of her patent to maintain her business, but it cost her almost £1 million to achieve that. That is a good example, and I hope that new clause 1, which the Minister has just introduced, will help someone in that situation in the future, inasmuch as the allocation of the costs will be a little more equitable if one gets to the end of the process.
1429 The Bill, assuming that the House will approve it this afternoon, remains unfinished business. We must return to some issues if we are to ensure that the role, defence and legitimacy of patents are properly enshrined in future. There are serious concerns if people are not registering patents because it is too costly or they have no confidence in the system and if large companies—[Interruption.]
§ Mr. Deputy SpeakerOrder. I am sorry to interrupt the hon. Gentleman, but there must be quiet in the House. There may have been a late surge of interest in the debate, but it must be completed without disturbance.
§ Malcolm BruceRarely has the House filled up so enthusiastically for a speech of mine as it has in the past couple of minutes. I simply want to conclude because I am anxious to ensure that the hon. Member with the Patent Office in his constituency has an opportunity to put on record his remarks on the Bill.
My final concern is that the Minister must continue to keep open the dialogue to try to find ways to ensure that there is confidence in the system, that the cost of registering is kept under control, that enforcement is kept within reasonable cost bounds that are fair and just for small and medium-sized business and that the process of attrition that large businesses can sometimes apply does not get out of hand. Of course, I welcome and support the small improvement that the Bill constitutes, but I hope that the Minister will acknowledge that this is not a closed book.
§ Paul FlynnMy hon. Friend the Minister can take consolation in the fact that his eloquence and the growing realisation of the Bill's importance has drawn hon. Members into the Chamber in such numbers. Only every 25 years does the House debate a Bill on patents, and it is right that hon. Members should have that experience at least once in their parliamentary careers.
On the vexed question that has dominated the proceedings on the Bill—the pronunciation of the word "patent"—it is not reasonable to make any assumption on how the Romans spoke their Latin. The pronunciation of the simple word "Davidus", which gave the two Welsh versions of the name—Dafydd and Dewi—has been deliberated for years. There can be no certainty about the interpretation of Roman pronunciation made by the right hon. Member for North-East Hampshire (Mr. Arbuthnot).
1430 It is a matter of great importance to my constituency that the Bill is passed. Of course, 2,000 years ago the Romans were in Newport, where the Patent Office is now, at a time when Europe had a common currency. It worthy of note that, after the collapse of the European union that existed in Roman times and the disappearance of that common currency, we entered the dark ages. That might well be a lesson for us all.
The Bill will do a great deal to modernise our patent service. Although the right hon. Member for North-East Hampshire was a bit sour in his negative comments at the end of his speech, he should note that one of our nation's great successes is our innovation and creativity, and we continue to be brilliant in coming up with new ideas and in building our stock of intellectual property. It was right to relocate the Patent Office to Newport, where it has been a huge success. The office's staff turnover in London was 17 per cent. It has now gone down to nil. The people who came from south-east London have settled happily there, and many of them have now retired and stayed in the area. This is a fine piece of legislation and we look forward to the House passing it without a Division.
§ Mr. SutcliffeWith the leave of the House, I should like to respond to this excellent debate. The right hon. Member for North-East Hampshire (Mr. Arbuthnot) said that the Bill was not important, but just look at the House filling up, as hon. Members clamour to come in to hear the detail of the Bill, which is vital to industry. The hon. Gentleman will know that the science and innovation budget has been increased under the comprehensive spending review and that we have a commitment to ensure that British businesses improve.
We have had good debates on the Bill. As the right hon. Gentleman says, our commitment is to come in line with the European patent convention. That is vital to ensure that our patent system works, and all hon. Members agree with that. It is an important Bill. I am sorry that the hon. Member for Gordon (Malcolm Bruce) is not in his place. [Interruption.] Oh, he is in his place. I should have liked to accept many of his amendments, but they were found to be unworkable. I know that he appreciates the spirit in which we tried to resolve many of the complicated issues involved.
The Committee was visited by people from the patent reform group and others who wanted to share with us their expertise and views. We had to try to find a way to ensure that we were effective and efficient—
It being half-past One o'clock, MR. SPEAKER put the Question already proposed from the Chair, pursuant to Order [12 July].Bill accordingly read the Third time, and passed, with amendments.