SECOND READING. (Hansard, 20 August 1907)

§ * LORD GRANARD
The Bill which I have the honour to introduce to your Lordships' notice is, I fear, one of a very complicated and complex character, and I doubt whether I shall be able to explain it adequately. If I fail in that respect, however, there are many noble Lords who are lawyers and are much better 421 able to explain its provisions. The Bill has for its object the remedying of the difficulties in the present law as regards patents and designs. It is well to remember in discussing this Bill what the origin of patents has been. As your Lordships are aware, the Crown originally claimed a right of bestowing monopolies on certain industries and subjects, and when in later years, I think in the time of the Stuarts, it was abolished, monopolies were reserved for the purpose of bestowing them on inventors in order to encourage them to foster and create new inventions. That system worked well for a considerable time, but for some time past foreigners have been taking out patents in this country with no intention whatever of working them here. It may be of interest to your Lordships to know how many patents have been taken out in this country and how many of those patents have been taken out by foreigners. During last year there were something like 14,700 orders, and of these 6,500 were granted to foreigners. In some industries this significant proportion is still more apparent. I would venture to draw your Lordships' attention to the industries of dyes and saccharine. In the case of dyes I think 95 per cent. of the total patents were taken out by foreigners, and in the case of saccharine the number, I think, was something like 92 per cent. A lot of foreigners take out these patents without any intention whatever of working them in this country, and under the Bill which I have the honour of presenting to your Lordships we hope to afford a remedy for this. We intend to ask a foreigner who takes out a patent and therefore obtains a monopoly in this country to give us adequate reasons why he does not work the patent in this country, and, if he is unable to do so, we shall either insist upon his granting a compulsory licence or in some way revoke his patent. There has been a certain amount of criticism on this clause, and it has been directed so far as I can make out on two points. One line of argument is that it savours of protection. I do not know how your Lordships can agree with this argument, for it seems to me to be strongly in favour of free trade. At the present moment the man who works a 422 patent in this country is certainly at a great disadvantage, for foreign patentees take out patents in this country with no intention of working them here. Surely it is fair to ask a foreigner who obtains a monopoly to give some adequate return for the monopoly the State grant him, and I do not think it is unfair in any way to ask him what we suggest in this Bill. As your Lordships are aware, in the Bill which I think the Board of Trade brought in in 1902, the question of compulsory licences was considered. It was hoped that by that Bill compulsory licences would be taken out, but, as a matter of fact, the result has not been at all satisfactory. The mode of procedure was very expensive. The appeal was to the Privy Council, and I understand that that is a tribunal very expensive to plead before. No poor inventor of any sort or kind would be able to pay the amount necessary. Under the present Bill, we propose if possible to make this somewhat cheaper. The appeal will be to a single Judge, and that single Judge will be appointed by the noble Lord who sits on the Woolsack, and his decision will be final.
Another section which has been to a certain extent talked about is Section 24. Its object is to prevent unfair conditions and restrictions being attached to the acquisition of patented articles. There has been a certain amount of ground for complaint in that respect, and it has especially been brought before us very forcibly in regard to the boot trade. They are bound in that trade to enter into agreements which they are forced to keep, under which they may only use one particular machine, although many better machines may come out in the future. They are tied down to these original machines during t time their contract exists, and they are not allowed to use any other of any sort or kind. There are a great many other minor improvements in the law of patents. There is, I have pointed out, the simplification of the Patent Laws, the cheapening of procedure, and the securing of a diminution in the number of invalid orders. There is a provision for the revocation of patents and another provision that a patent is not 423 to be invalid by reason of an invention having been published which was not within the knowledge of the man who invented the patent. There are also provisions made as regards patent agents. There are, as your Lordships' doubtless know, a certain number of what are known as registered patent agents, over whom the Board of Trade have absolute control, and the Controller can refuse to deal with these people. As regards unrecognised patent agents, he has no power whatever. Under the Bill at present before your Lordships this is intended to be remedied, and the Controller will be able to refuse to recognise unregistered patent agents who have been guilty of disgraceful professional conduct, and also to refuse to have anything to do with foreigners who have not a place of business in this country.
The latter part of the Bill deals completely with designs, and the provisions of this part of the Bill have been approved by the whole of the Chambers of Commerce. I do not know that there is very much more that it is necessary for me to say. Perhaps I might say that this Bill has been welcomed in the House of Commons almost universally. The colleague of the noble Lord opposite, Mr. Bonar Law, who was at the Board of Trade with him, made, if I remember right, one great complaint against the Government. He said that while all his colleagues had ample opportunity of criticising measures of the Government, he was in the unfortunate position of always having to agree with the measures brought forward by my right hon. friend the President of the Board of Trade. I only hope that the noble Marquess, whose colleague Mr. Bonar Law was at the Board of Trade, may take the same view and give this Bill a favourable consideration on Second Reading.
Moved, "That the Bill be now read 2^a."

§ THE MARQUESS OF SALISBURY
I am afraid I owe your Lordships a very humble apology for once more presenting myself to address you. I do so upon a very much less exciting topic but one which is not less important in its character. I can only promise I will be 424 very short. The noble Earl who has explained this Bill has expressed the hope that the amicable relations which subsist between the representatives of the Board of Trade and the ex-representatives of the Board of Trade in the House of Commons will be found to be true in this House also. I do not think he has reason to complain of my attitude during the last two years in respect of Board of Trade business, and, as regards this Bill, there is no reason why there should be any great difference of opinion between us. On its principle and on most of its details I think it will be found that no great difference of opinion exists in your Lordships' House, but I am bound to say that I think the way in which this Bill has been presented to the House does call for comment, and, indeed, for serious complaint. I ask your Lordships—is it a proper thing to present for the first time to the House of Lords a Bill of this enormous importance upon 20th August at eleven o'clock at night? This Bill with all its merits, is a Bill of detail, and any matters of dispute in it are all matters of detail which under happier circumstances would be far better discussed in your Lordships' House than anywhere else, because in your Lordships' House are contained men of great experience, both in industrial matters and in matters of law, men whose equal, with all respect to the House of Commons, are not to be found in that branch of the Legislature. I think that it is almost wanton, if I may use such a phrase, of His Majesty's Government to use the House of Lords so badly in respect of this most important Bill. There is really no reason in the world why the Bill should not have been brought before us at an earlier period of the session. Why was it not introduced in your Lordships' House? That would have been an easy and proper method. I am sure if it had been introduced in your Lordships' House in the earlier part of the session, it would have been sent to a Select Committee which would have threshed out its details, brought to bear upon it first-class knowledge, and turned out a first class Bill. But as it is, what are we to do? I look around. One or two legal luminaries are still here, but where, for example, is the Lord 425 Chief Justice? He is known to be a great authority on Patent law. He is not here. Where is Lord Coleridge? He is not here. He was always introducing a Patent Bill when I was in the House of Commons. The same thing may be said of those who are engaged in industry. Where is Lord Avebury? He is on the Associated Chambers of Commerce and on the Board of Trade Advisory Committee. He is not to be found. Discussion in your Lordships' House under these circumstances is nothing less than a farce, and is not deserving of the name of a real discussion by a legislative assembly. I have made my protest, and I earnestly hope the members of the Government who sit in your Lordships' House, and who, I am sure, cannot approve of such treatment, will exercise their influence on the Government next year and see that Bills of this kind, which are pre-eminently those which ought to be introduced here, are introduced here at an earlier part of the session.
I do not propose on the present occasion to say much as regards the Bill itself. There are considerable difficulties which I think ought to be explained when we get into Committee. I will only enumerate them more for the purpose of giving notice of the kind of thing which ought to be discussed in Committee than with the view of dwelling upon them. There is, for example, the question under Clause 3, which makes it incumbent under certain circumstances upon an inventor of chemicals, who seeks a patent, to produce sample s of his work. It is alleged that that will press very hardly upon the poor inventor who very often has not access to the machinery to produce a sample. There is a question in Clause 4 as to cognate orders—a most difficult and intricate matter. It is alleged that great confusion may arise in respect of the fact that your cognate patent is antedated to the same date as the original patent. Then there is the more important clause, Clause 7. The noble Earl knows that that is a question which excites a good deal of feeling. Under Clause 7 the Controller, in the first instance at any rate, has power to refuse the patent altogether if he thinks it has 426 been completely anticipated. Hitherto, if a man has taken a patent out under those circumstances, he has taken it out at his own risk, and no one has had the right to stop him altogether. When the proper time comes I shall be prepared, I think, to explain to your Lordships how it is that such a change in the law may act with considerable hardship upon inventors, but I will content myself for the moment with saying that a very important document was, I think, prepared and presented to the Board of Trade, signed by an enormous number of persons of great importance in the world of invention, including a most eminent member of your Lordships' House—Lord Kelvin—which protested against the conditions of Clause 7. Then there is the question of the single Judge. I quite agree for my own part that there is a great deal to be said for referring these questions to a single Judge, but there seems to be a necessity that there should be some means when we reach important and intricate matters of Patent law, to refer the decision to a higher Court of Appeal. I shall be very glad as regards the other clauses of the Bill, when we come to them, if the noble Earl is able to explain upon what principle the words. "exclusively or mainly manufactured in this country" will be interpreted. I am not opposed to the principle of this clause, but I think some of the words are so vague that they will give rise to very expensive litigation. I should also like to ask in connection with that clause what are the positions of foreign treaties which are referred to in the latter part—whether in foreign treaties, which, of course, are very much complicated by the existence of the most-favoured-nation clause, it will be possible for this clause to operate at all. I may just say one word as to compulsory licences, and it shall only be one word. The noble Lord said that the section in the Act of 1902 had failed. He was quite right in that observation, but I would call to his notice the fact that it failed because of the expense and the expense alone. It does not, however, follow that because the clause in the Act of 1902 failed, the principle of compulsory licences is a bad principle. I am glad, therefore, 427 to find that the principle still appears in the Bill, although the tribunal is no longer the Privy Council but a single Judge.
There only remains one word to be said in regard to Clause 24. That clause is a very novel clause. I do not deny that the argument the noble Earl used just now has a great deal in it. I am not at all prepared to say that the nation has not the right, in return for the monopoly which it grants, to impose certain conditions upon the use of that monopoly. That appears to me perfectly defensible in theory,and, indeed, it may be defensible in practice too. But I think we ought, before we part with that clause in Committee, to have some account of the reasons which have led the Government to put it in the Bill. Until I have heard those reasons I should like to reserve my opinion as to whether the clause deserves the complete support of your Lordships' House. It will be seen from the observations I have ventured to make that none of the objections to which I have called attention are objections of principle. They are all matters of detail, and, if I have detained your Lordships for a few moments, it is for the purpose of giving notice to my noble friend of those matters which seem likely to arise when we get into Committee and not for the purpose of stopping the passage of the Bill.

§ THE LORD PRIVY SEAL (The Marquess of RIPON)
I must admit that the noble Lord has some cause of complaint. All I can say is that the Bill was very carefully considered in the other House. I believe it was six weeks in Grand Committee. That is one of the reasons why it comes up to us so late. I have always been very pessimistic, whether I sat on this side or on the other side of the House, with reference to the dates on which Bills come up to this House. If the Bill, however, be late here, there is no doubt that the noble Marquess thoroughly understands it, and that he will be prepared when we get into Committee to make any observations he desires. I am quite sure my noble friend behind me will be equally ready to make a reply. The Bill is a very important one, and it does deserve food consideration. I regret that a Bill 428 of this kind should have come up at this period of the session, but it is not the first occasion on which things of this sort have happened, and I am afraid it is not likely to be the last.

§ VISCOUNT ST. ALDWYN
It is very difficult to say much after the generous apology the noble Marquess has made, but, as a past President of the Board of Trade, I would venture to say this much in addition to what he has said as to whether a way might have been found out of the difficulty. This is not a party measure, and it is a Bill the details of which can really be discussed only by experts such as lawyers or gentlemen concerned in some industrial occupation. It is a Bill which, of all others, I should have thought, speaking with some little official acquaintance of the subject, might have been introduced in your Lordships' House earlier in the session. I hope the noble Marquess opposite will at any rate use his influence next year to see that something of the kind will be done as regards measures of a similar character to the present Bill.
On Question, Motion agreed to.
Bill read 2^a, and committed to a Committee of the Whole House on Friday next.