PATENTS AND DESIGNS BILL.

HL Deb 04 December 1919 vol 37 cc602-71

Order of the Day for the House to be put into Committee, read.

Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL of DONOUGHMORE in the Chair.]

Clause 1:

Provisions for the prevention of abuse of monopoly rights.

1. For section twenty-seven of the Patents and Designs Act, 1907 (hereinafter referred to as the principal Act), the following section shall be substituted:—

"27.—(1) Any person interested may at any time apply to the comptroller alleging in the case of any patent that there has been an abuse of the monopoly rights thereunder and asking for relief under this section.

(2) The monopoly rights under a patent shall be deemed to have been abused in any of the following circumstances:—

1. (a) If at any time after the expiration of four years from the date of the patent, the patented invention (being one capable of being worked in the United Kingdom), is not being worked within the United Kingdom on a commercial scale, and no satisfactory reason can be given for such nonworking:
• Provided that if an application is presented to the comptroller on this ground, and the comptroller is of opinion that the time which has elapsed since the date of the patent has by reason of the nature of the 603 invention or for any other cause been insufficient to enable the invention to be worked within the United Kingdom on a commercial scale, the comptroller may adjourn the application for such period as will in his opinion be sufficient for that purpose:
2. (b)If the working of the invention within the United Kingdom on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by the patentee or persons claiming under him, or by persons directly or indirectly purchasing from him, or by other persons against whom the patentee is not taking or has not taken any proceedings for infringement:
3. (c)If the demand for the patented article in the United Kingdom is not being met to an adequate extent and on reasonable terms:
4. (d) If, by reason of the refusal of the patentee to grant a licence or licences upon reasonable terms, the trade or industry of the United Kingdom or the trade of any person or class of persons trading in the United Kingdom, or the establishment of any new trade or industry in the United Kingdom, is prejudiced, and it is in the public interest that a licence or licences should be granted:
5. (e) If any trade or industry in the United Kingdom, or any person or class of persons engaged therein, is unfairly prejudiced by the conditions attached by the patentee, whether before or after the passing of this Act, to the purchase, hire, licence, or use of the patented article, or to the using or working of the patented process:

Provided that for the purpose of determining whether there has been any abuse of the monopoly rights under a patent, it shall be taken that patents for new inventions are granted not only to encourage invention but to secure that new inventions shall so far as possible be worked on a commercial scale in the United Kingdom without undue delay.

(3) On being satisfied that a case of abuse of the monopoly rights under a patent has been established, the comptroller may exercise any of the following powers as he may deem expedient in the circumstances:—

1. (a) He may order the patent to be endorsed with the words "licences of right" and thereupon the same rules shall apply as are provided in this Act in respect of patents so endorsed, and an exercise by the comptroller of this power shall entitle every existing licensee to apply to the comptroller for an order entitling him to surrender his licence in exchange for a licence to be settled by the comptroller in like manner as if the patent had been so endorsed at the request of the patentee, and the comptroller may make such order; and an order that a patent be so endorsed may be made notwithstanding that there may be an agree- 604 ment subsisting which would have precluded the indorsement of the patent at the request of the patentee:
2. (b) He may order the grant to the applicant of a licence on such terms as the comptroller may think expedient, including a term precluding the licensee from importing into the United Kingdom any goods the importation of which, if made by persons other than the patentee or persons claiming under him, would be an infringement of the patent, and in such case the patentee and all licensees for the time being shall be deemed to have mutually covenanted against such importation. A licensee under this paragraph shall be entitled to call upon the patentee to take proceedings to prevent infringement of the patent, and if the patentee refuses, or neglects to do so within two months after being so exiled upon, the licensee may institute proceedings for infringement in his own name as though he were the patentee, making the patentee a defendant:
• In settling the terms of a licence under this paragraph the comptroller shall be guided as far as may be by the same considerations as are specified in section twenty-four of this Act for his guidance in settling licences under that section:
3. (c) If the comptroller is satisfied that the invention is not being worked on a commercial scale within the United Kingdom, and is such that it cannot be so worked without the expenditure of capital for the raising of which it will be necessary to rely on the patent monopoly, he may, unless the patentee or those claiming under him will undertake to find such capital, order the grant to the applicant, or any other person, or to the applicant and any other person or persons jointly, if able and willing to provide such capital, of an exclusive licence on such terms as the comptroller may think just, but subject as hereinafter provided:
4. (d) If the comptroller is satisfied that the objects of this section cannot be attained by the exercise of any of the foregoing powers, he may order the patent to be revoked, either forthwith or after such reasonable interval as may be specified in the order, unless in the meantime such conditions as may be prescribed in the order with a view to attaining the objects of this section are fulfilled, and the comptroller may, on reasonable cause shown in any case, by subsequent order extend the interval so specified:
• Provided that the comptroller shall make no order for revocation which is at variance with any treaty, convention, arrangement, or engagement with any foreign country or British possession:
5. (e) If the comptroller is of opinion that the objects of this section will be best 605 attained by making no order, he may refuse the application and dispose of any question as to costs thereon as he thinks just.

(4) In settling the terms of any such exclusive licence as is provided in paragraph (c) of the last preceding subsection, due regard shall be had to the risks undertaken by the licensee in providing the capital and working the invention, but subject thereto the licence shall be so framed as—

1. (a) to secure to the patentee the maximum royalty compatible with the licensee working the invention within the United Kingdom on a commercial scale and at a reasonable profit;
2. (b) to guarantee to the patentee a minimum yearly sum by way of royalty, if and so far as it is reasonable so to do, having regard to the capital requisite for the proper working of the invention and all the circumstances of the case;

and in addition to any other powers expressed in the licence or order the licence and the order granting the licence shall be made revocable at the discretion of the comptroller if the licensee fails to expend the amount specified in the licence as being the amount which he is able and willing to provide for the purpose of working the invention on a commercial scale within the United Kingdom, or if he fails so to work the invention within the time specified in the order.

(5) In deciding to whom such an exclusive licence is to be granted the comptroller shall, unless good reason is shown to the contrary, prefer an existing licensee to a person having no registered interest in the patent.

(6) The order granting an exclusive licence under this section shall operate to take away from the patentee any right which he may have as patentee to work or use the invention and to revoke all existing licences, unless otherwise provided in the order, but on granting an exclusive licence the comptroller may, if he thinks it fair and equitable, make it a condition that the licensee shall give proper compensation to be fixed by the comptroller for any money or labour expended by the patentee or any existing licensee in developing or exploiting the invention.

(7) Every application presented to the comptroller under this section must set out fully the nature of the applicant's interest and the facts upon which the applicant bases his case and the relief which he seeks. The application must be accompanied by statutory declarations verifying the applicant's interest and the facts set out in the application.

(8) The comptroller shall consider the matters alleged in the application and declarations, and if satisfied that the applicant has a bonâ fide interest and that a primâ facie case for relief has been made out he shall direct the applicant to serve copies of the application and declarations upon the patentee and upon any other persons appearing on the register to be interested in the patent, and shall advertise the application in the Illustrated Official Journal (Patents).

(9) If the patentee or any person is desirous of opposing the granting of any relief under this section he shall within such time as may be allowed by the comptroller or within such extended time as the comptroller may on application further allow deliver to the comptroller a counter statement verified by a statutory declaration fully setting out the grounds on which the application is to be opposed.

(10) The comptroller shall consider the counter statement and declarations in support thereof and may thereupon dismiss the application if satisfied that the allegations in the application have been adequately answered, unless any of the parties demands a hearing or unless the comptroller himself appoints a hearing. In any case the comptroller may require the attendance before him of any of the declarants to be cross-examined or further examined upon matters relevant to the issues raised in the application and counter statement, and he may subject to due precautions against disclosure of information to rivals in trade require the production before him of books and documents relating to the matter in issue.

(11) All orders of the comptroller under this section shall be subject to appeal to the Court, and on any such appeal the law officer or such other counsel as he may appoint shall be entitled to appear and be heard.

(12) In any case where the comptroller does not dismiss an application as hereinbefore provided, and

1. (a) if the parties interested consent, or
2. (b) if the proceedings require any prolonged examination of documents or any scientific or local investigation which cannot in the opinion of the comptroller conveniently be made before him;

the comptroller may at any time order the whole proceedings or any question or issue of fact arising thereunder to be referred to an arbitrator agreed on by the parties, or in default of agreement appointed by the comptroller, and where the whole proceedings are so referred the award of such arbitrator shall if all the parties consent be final, but otherwise shall be subject to the same appeal as the decision of the comptroller under this section, and where a question or issue of fact is so referred the arbitrator shall report his findings to the comptroller.

(13) For the purposes of this section the expression 'patented article' includes articles made by a patented process."

LORD PARMOOR moved, in subsection (2) (b), to leave out "or by other persons against whom the patentee is not taking or has not taken any proceedings for infringement." The noble and learned Lord said: When the Bill was before the House on Second Reading I indicated that there were many matters which would have to be discussed when we came to the Committee stage, but the Lord Chancellor expressed the view, from which I did not desire to dissent, that those matters could be discussed fairly and properly in your Lordships' House without the necessity of the appointment of a Select Committee. The noble and learned Lord also said that in his opinion the general provisions of the Bill were in favour of the inventor—I think, but I am not quite sure, he went a little further and said in favour of the poor inventor. This Amendment deals with a matter which I think would press very hardly on any inventor, and particularly on a poor inventor.

The general idea of this clause is that if the conditions under it are not fulfilled there is what is called an abuse of the patent right, and there are various penalties, all of a stringent character, among others an actual provision which enables the patent itself to be revoked. I am afraid it is rather a technical matter in some ways, but I will try to explain what is meant by the words that I propose to omit. Paragraph (b) says— If the working of the invention within the United Kingdom … is being prevented or hindered by the importation from abroad of the patented article by the patentee or persons claiming under him, or by persons directly or indirectly purchasing from him … So far I am entirely in favour of the provision, because I do not think these monopoly rights should be used for any indirect purpose whatever, and certainly they ought not to be used to prevent the working of the invention in the United Kingdom.

But we come now to the words which I propose to omit; and they are not directed against the inventor at all in the first instance. So far as the patentee is concerned the infringer is a wrongdoer, and therefore the provision is that the patentee enforces his rights against the wrongdoer, and so far as he is concerned certain penalties as regards a patentee shall ensue. Is that right? I think there is nothing less favourable to the position of a poor patentee than litigation. Whatever we may say about litigation, the trump card is in the hands rather of the financial exploiter than of the inventor himself. What reason, therefore, is there that the inventor or patentee should be driven to take action against persons on the ground that they are infringing the patent? Surely it might work intense injustice. In the first place, litigation is costly; in the second place, a person might be set up as an infringer by adverse interests, or he might be a mere man of straw, or he might be infringing to such a small extent that it would not be worth the while of the patentee to take action against him. I agree that if you want to put a person (against whom the patentee has not taken any proceedings for infringement) under certain penalties for his wrong action, well and good. That might be a proper provision to insert in a Bill of this kind. But a patentee is not in the position of a public prosecutor, and I think to put an obligation of this kind upon him or to render him liable to the revocation of his patent rights is an extreme hardship.

In my opinion one of the hard features of this Bill, so far as inventors are concerned, is that it opens the door to an immense amount of litigation. Almost every clause of this Bill implies litigation. To force a man to take action whether he wants to do so or not, whatever the cost or risk may be, against a wrongdoer and, if he does not proceed against a wrongdoer, to render him liable to the revocation of his patent, certainly appears to be not only extremely harsh but unjust in principle. Why should you force him to take this action against an infringer? If you think it is wrong that a person under those conditions should import into this country patented articles, or articles subject to the patent, by all means introduce a provision to that effect. I beg to move the Amendment standing in my name on the Paper.

Amendment moved— Page 2, lines 6 to 8, leave out ("or by other persons against whom the patentee is not taking or has not taken any proceedings for infringement'').—(Lord Parmoor.)

LORD MOULTON

I fully sympathise with the feelings of the noble and learned Lord who has just spoken in not wishing to force litigation on any unwilling persons; but I must ask your Lordships to take a rather wider view of the dangers and also of the circumstances which surround patentees before you pronounce your opinion upon this clause. The phrase "abuse of the monopoly rights" has been introduced at the beginning of the clause as a generic term for those things that the Government, on behalf of the nation, wish to stop. The phrase is ill-suited to some of the things to which it refers; but, after all, it is a phrase that is introduced only for the purposes of the clause and we need not trouble whether it sounds like a phrase which casts blame on the individual or not. We have to see how it is used in the clause and for what purposes.

The evil which this part of the clause is intended to remedy is a very serious one to the trade of England. Patents are now usually taken out in more than one country. I will take the case of a German inventor who has taken out an English and a German patent. He sells the English patent to some individual, but he keeps the German patent in his own hands. The individual who has bought the English patent cannot prevent the German manufacturer from swamping England with the patented articles manufactured in Germany except by bringing actions for infringement; because the importation of an infringing article is an infringement. Supposing he has sold the English patent to someone whom he persuades not to bring actions for infringement or who is unable to do so on account of his want of funds. The English trade finds England—in spite of an English patent which is in English hands having been granted—swamped with these infringing articles. Who can stop it? No one but the person who happens to hold the English patent. But that person may have granted many licenses; and these people who have paid for the licences see these infringing articles coining into England in multitudes, but, because they are not patentees, they cannot bring an action. The consequence is that, thanks to the English patent, Germany gets the control to the extent that the invention is not worked in England at all.

The clause, which is a very elaborate one and which requires considerable study, is aimed at stopping that; and it does it in this way. It says that if these articles are coming in, and if the person who hold the English patent will not stop them, then the Patent Office can grant a licence and give to the licensee the power to bring an action in his own name against the people who are importing the infringing article. Im other words, it gives the licensee the power to stop infringement. If the noble and learned Lord will look at paragraph (b) of the remedy he will find that this paragraph is directed against what he considers to be the injustice, apparently, of making a patentee enter into litigation. Paragraph (b) says that a licence can be granted, and that the licensee can defend the country from this importation. If you take the phrase which brings the patentee within the limits of those who abuse the patent rights, and if you take the remedy that is provided, there is no injustice. There might be an injustice if you simply said that he abused his monopoly and had not a specific remedy for it. Taken as a whole, this compels no one to go to litigation who does not wish to do so; and, at the same time it protects the country against one of the most serious dangers—namely, the separation of the English from the German patent, and the German patentee, having lost all interest in the English patent, freely pours infringing articles into England. I earnestly recommend your Lordships to leave this part unaltered in view of the fact that a specific remedy, meeting the difficulty which has aroused the sympathy of the noble and learned Lord, is coming afterwards, and will remove all traces of injustice.

THE LORD CHANCELLOR (LORD BIRKENHEAD)

The very weighty speech just delivered by my noble and learned friend who, as your Lordships know, has a unique experience upon this branch of our law, must, I think, have been of great assistance to your Lordships, and I am not without hope that it may have produced an impression on the mind of my noble and learned friend who moved the Amendment. No useful purpose would be served by my repeating the arguments which have just been addressed to the House. I will, therefore, only add that. I accept and welcome them as expressing a point of view which I should have attempted, with far less knowledge, to place before the House. I would summarise there by saying that if this Amendment were accepted it would open the door to all kinds of improper arrangements between patentees and others. It might easily lead to the defeat of the whole object of the clause.

My noble and learned friend is under no delusions—we are none of us under any delusions—as to the subtlety of the German people in these matters, or as to the skill with which in the past they have been able to resort to various devices to mask the true character of their activities. It might easily be, if these words were not maintained in the clause, that it could not be proved that any person was acting under the authority of a patentee, to take one of the alternative cases dealt with, but, at the same time, the patentee would be acquiescing in the importation from abroad by such person. I would ask my noble and learned friend to apply his mind to the simple case, if he will assume the facts to take the illustration—that there is a case in which there is overwhelming ground for supposing that the patentee is acquiescing in such importations from a abroad, the importations being, as the noble Lord said, the importations of a wrongdoer. If these words are not inserted, there is no means whatever of dealing with such a case even under the provisions of the Bill, and it is a case with which it is specially necessary to deal.

LORD PARMOOR

As regards the principle to be adopted, I am entirely of the same view as my noble and learned friend Lord Moulton, whose arguments I understand have been adopted by the noble and learned Lord, the Lord Chancellor; but I am not satisfied either that these words are necessary, or that they would in themselves be a protection against the danger (which is undoubtedly a danger as every one knows who has dealt with patent cases) of preventing the working of an invention in this country by importation from abroad. But having regard to what has been said, and giving the due weight that I should give to the views of my noble and learned friend upon this point, I shall not press my Amendment to a Division.

Amendment, by leave, withdrawn.

LORD PARMOOR moved, in subsection (2) (e), to leave out "unfairly.'' The noble and learned Lord said: This is a matter which raises a question of far-reaching importance, and I think it would be well to discuss it at this stage, which appears to be the proper stage at which it should be raised. In order that your Lordships may appreciate the meaning of the Amendment I think it is necessary to read paragraph (e) to which my Amendment refers. It runs— If any trade or industry in the United Kingdom, or any person or class of persons engaged therein, is unfairly prejudiced by the conditions attached by the patentee, whether before or after the passing of this Act, to the purchase, hire, licence, or use of the patented article, or to the using or working of the patented process. In my opinion no patentee is entitled to increase the area of his monopoly rights and monopoly claim beyond the terms of the patent grant. In other words, the patent grant gives not only the terms of the monopoly right, but gives the protection, and the only protection, that there ought to be as regards the enforcement and use of the monopoly right.

I should lay this down as a general principle if I might, before I come to the actual use of the word "unfairly"—that no patentee should, by attaching conditions to the purchase, hire, license, or use of the patented article, or to the using or working of the patented process, prejudice in any way any trade or industry in the United Kingdom or any person or class of persons engaged therein. Surely the general statement is almost self-evident. You are not given patent rights in order to prejudice the trade and industry of the United Kingdom or of any persons or class of persons engaged therein; you are given the patent rights for what is an entirely different purpose; and the only reason for which you are given the patent right, and the only ground on which a monopoly can be sustained, is that it shall not be used to the prejudice of any trade or industry in the United Kingdom.

I move to leave out the word "unfairly." The words are "unfairly prejudiced." I do not think there ought to be any prejudice at all, and immediately you introduce the word "unfairly" you introduce not only a very uncertain factor as regards litigation (because different minds will come to different conclusions as to what is meant by the term), but, what is much more important, you give sanction to a system which is being introduced into this country—it is generally a matter of prejudice now to say it is of foreign origin, but it certainly is of foreign origin—under which, by a system of tied leases, you not only seek to preserve your monopoly right as regards the use of a manufactured article, but you seek to impose limitations on the person who is to have the benefit of the use of the patent in a large number of other directions. In fact, you attach conditions which must necessarily interfere with trade or industry in the United Kingdom and a large number of persons or classes of persons engaged therein.

I think every one of your Lordships must have had, in connection with this Bill, rival views put forward upon the position of patentees who seek to attach these conditions if the patented article is to be used for manufacturing purposes, and, particularly, I think we have all had brought before our attention the position of the British United Shoe Manufacturing Company. Their apologia is this—we are entitled to attach very severe and stringent conditions to the use of articles protected by patents, because we are in the nature of benevolent bureaucrats. We do it, not to obtain benefit to ourselves, but because we believe that these conditions so attached are of benefit to the trade and industry in which we are interested.

I think that is an argument which deserves, and demands, very careful analysis. I beg to say personally that I do not think the motive is benevolent action; I think the motive is to get the greatest possible financial return from the patent rights, and, although the patentee is entitled to do that directly, I think he is not entitled to do it indirectly. The matter should really be argued on principle and apart from the special claims or position of a particular company. I dare say it has happened to your Lordships, as it has happened to me, that there has been a conflict of opinion on the point. The conclusion I have come to is this—that, as regards producers of shoe machinery in this country, they are all opposed to this system of what is called "tied leases." to which I shall have a reference to make by and by. As regards the manufacturers of this country—that is, shoe manufacturers—a very large number (I cannot say all of them) are also opposed to this principle.

May I point out to your Lordships on this matter what is the nature of this tied lease which, according to the argument of those who bring it forward, does not unfairly prejudice the trade and industry of the manufacturers of this country? I have a covenant which says, as regards repairs that "he must also exclusively obtain from the company who have the patent rights all the parts needed for repairs" and pay for them whatever price the machinery company may charge. He is also bound to go on using the patented article although, as a matter of fact, it has been superseded by better machinery. He is bound to purchase all additional machines from the same source—and there is what is called the "prohibitive clause." He may not use the machinery of any other manufacturer in the manufacture of any such machine or machines unless the machinery used has been leased by the machinery company. It is not too much to say, as regards these provisions, that they practically bring under the power of the patentee the whole industry.

I do not want to argue the general principle, although I am bound to say that I am opposed to these financial trust arrangements. What I want to say is this. Although it may be perfectly open to the manufacturer and the supplier of machinery to enter into an arrangement of this kind, if it is not contrary to public policy and thought to be for the convenience of the two parties, yet it is wholly wrong that the manufacturer should use his position as a patentee and say, "You cannot have the advantage of my patented machinery unless you come under terms of this description." It is a matter on which I feel strongly, and I shall have to ask the opinion of your Lordships' House upon it by taking a Division.

I have studied rather carefully what is called the "tied-up" system of leasing shoe manufacture machinery put forward by a manufacturing company which seeks to impose this tied lease. They say—and it is very remarkable as evidence for the action they have taken—that they have 400 machines which they manufacture, and that this tied-up lease system only affects 150 of them. Just conceive, as regards the boot manufacture in this country, there are 150 machines which are necessary for carrying on the manufacture at a commercial profit, which no shoemaker can use unless he comes under conditions to which I have called attention. Think what this really means. A monopoly right, as regards the patentee, was given in contravention of the Ordinary Statute Law and Common Law, and at the same time that this monopoly right was given an extension of it was carefully laid down and defined by the Legislature itself. It is defined in this way, that you cannot use a monopoly or patented article without the assent of the patentee, or coming to terms with him as to the amount you have to pay. Can it be legitimate to add to that the additional monopoly right, or claim that not only are you not to use it without his consent, but unless you use a patented article according to the terms of the tied lease you shall not use it at all. And this is given for all time; not only for the duration of the patent, but far beyond that, extending the monopoly not only as regards the area but also as regards time.

This is not a new matter. It has been discussed for a good many years. It is necessary to call your Lordships' attention to what happened when the Act was passed in 1907. When that Act was introduced there was in it Section 38, which prohibited any conditions of this kind being attached to the sale of a patented article. The section reads— It shall not be lawful in any contract made after the passing of this Act in relation to the sale or lease of, or license to use or work, any article or process protected by a patent to insert a condition the effect of which will be—

1. (a) to prohibit or restrict the purchaser, lessee, or licensee front using any article or class of artices, whether patented or not, or any patented process, supplied or owned by any person other than the seller, lessor, or licensor or his nominees."

In other words, you were only to use your monopoly grant to protect your monopoly on the terms which the Legislature laid down. It also was illegal—

1. (b) to require the purchaser, lessee, or licensee to acquire from the seller, lessor, or licensor, or his nominees any article or class of articles not protected by the patent."

This is what the Act of 1907 said, as introduced; and it passed the House of Commons in that form. If it had stopped there it would not have been necessary to have addressed your Lordships at the present time.

Subsequently, in your Lordships' House, two provisoes were introduced; and it is because of the duration of these provisoes that the people interested in these financial trust companies have been enabled, in my opinion, really to undo what was intended—namely, that the monopoly right should not extend beyond the terms of the monopoly grant. The provisoes, which I think were unfortunate, were these— Provided that this subsection shall not apply if—

1. (i) the seller, lessor, or licensor proves that at the time the contract was entered into the purchaser, lessee, or licensee, had the option of purchasing the article or obtaining a lease or licence on reasonable terms, without such conditions as aforesaid."

Really that has been found to be little better than camouflage. An agreement of this kind may be reasonable in itself, yet it may be so framed as to be impossible for the manufacturer to take advantage of it as against the tied lease. The second proviso reads— Provided that this subsection shall not apply if—

1. (ii) The contract entitles the purchase, or lessee, or licensee to relieve himself of his liability to observe any such condition on giving the other party three months' notice in writing and on payment in compensation for such relief in the case of a purchase of such sum, or in the case of a lease or licence of such rent, or royalty for the residue of the term of the contract, as may be fixed by an arbitrator appointed by the Board of Trade."

How does that work out in practice? There has been only one case, in which the question involved was with regard to an article costing £40. The question of compensation was raised because it was in the interest of people who want this tied lease to make the conditions as burdensome as possible. There were compensation proceedings before an arbitrator, and they cost £430. Therefore, the manufacturer who wanted to rid himself of the terms of the tied lease by paying compensation found himself forced to pay a sum of £430 in respect of machinery the total value of which was only £40. It is one of the illustrations which show that the more you introduce litigation into Acts of this kind the greater is the hardship against the comparatively poor man; and this, as I said before, is one of the factors which appear to me to be a great hardship in the present Bill. Why should you have a proviso of that kind? If the word "unfairly" is excluded here I shall be called upon in a subsequent Amendment to repeal these provisoes. The matter will arise in the schedule of the Bill, because already Section 38 is proposed to be amended in the schedule. I do not want, however, to go into technical matters of that kind, here. I am dealing with the general principle, whether a trade or industry in the United Kingdom, or any person or class of persons engaged therein, ought to be prejudiced by conditions of this kind, such as are introduced into these tied leases. Are you going to extend the monopoly right by giving protection of conditions of that kind? That is a point which you have to decide and which your Lordships cannot escape deciding on the present occasion.

I am bound to admit that there seems to be no answer to the proposition as I put it. Let the monopoly grant be protected in the way the Legislature has already done—namely, that no one shall then sell or use articles without the permission of the patentee, but do not add to the monopoly grant clauses of this kind which ought not to be added and which the Legislature has not sanctioned. That is the reason why I propose that the word "unfairly" should be left out. I hope that I have made my point clear. It is rather complicated and difficult, but I think it is a matter of the first importance, and I move that the word "unfairly" be omitted.

Amendment moved— Page 2, line 21, leave out ("unfairly").—(Lord Parmoor.)

LORD MOULTON

The question before your Lordships is whether the word "prejudice" should stand unqualified, or whether it should be "unfairly prejudiced." The noble and learned Lord has appealed to your sympathy by reference perpetually to cases where, I may say frankly, I should think that the industry was unfairly prejudiced. That is not the way to decide a question of this kind. If the clause says that no trade is to be prejudiced a man might bring an action against a rival manufacturer of we will say a patent threshing machine, because the rival charged one-third of the royalty that his opponent did, and a royalty lower than the opponent could afford to charge.

LORD PARMOOR

May I interrupt the noble and learned Lord for a moment? That really is not so under my Amendment. That is a question of the royalties charge. It is a condition attached which I dealt with.

LORD MOULTON

One of the conditions is the royalty that is to be paid; but I could think of a condition as to the use of a patent which would similarly be perfectly fair, which any man possessing non-patented articles could fairly attach to the use of those articles which he let out, but which would seriously prejudice de facto the trade of the rival. What the word "unfairly" is put in for is to intimate that there must be something which steps out from the legitimate competition with another article. I will show your Lordships in a minute how complete is the protection against all the evils that the noble and learned Lord has referred to; but what I mostly rely upon is this: I have not to appeal to any individual cases of which I may know, and which I might ask your Lordships to accept upon my assurance, but upon the general principles of legislation the word "prejudice" could not justly have a meaning which would not leave the element of unfairness. In a case like this, where we are interfering with the grant which the patentee has received from the Crown, it surely is our duty to say that all he has to take care is to impose no unfair condition—that he has not to consider whether his conditions are so liberal that they hurt a neighbour; that provided there is nothing unfair in it, there is no reason why the law should interfere.

I heard my learned friend talk about the poor man who is crushed by these conditions for the hire of machines, and from my noble and learned friend's language it is obvious to which company he refers. The crime of that company was that it came to the assistance of the poor man, and that in a great revolution in the system of manufacture it enabled the poor man to use at once, on reasonable terms, plant which he would have had no chance of obtaining on his own capital. The attack never came from the poor man, and in my whole experience I never knew a revolution like that, involving expensive machinery for a whole industry, come about so rapidly and on such reasonable terms. I do agree that, we have to take care that others cannot follow the same lines and do injustice by it. The particular company so far from doing injustice was extremely popular with those who took the benefit of its leases, but restrictive covenants have got to be most carefully watched.

Just consider how in the Act of 1907 this was done. I know of no striking cases that have come up since the 1907 Act. You were allowed to insert a condition "to prohibit or restrict the purchaser, lessee, or licensee from using any article or class of articles, whether patented or not, or any patented process, supplied or owned by any person other than the seller, lessor, or licensor or his nominees." You are not allowed to say, "You must treat with me alone." Further than that, you are not allowed to require the purchaser or licensee to acquire any article or class of articles not protected by the patent from the patentee. You could not tie him down to come to you. You could not tie him down to use your own special machinery. Those two, which are the conditions of restriction to which my learned friend has referred, were deliberately forbidden, but there was a proviso, and the proviso I believe due to your Lordships' House. I will call your Lordships' attention to it, because it seems to me to go in the direction of the greatest freedom compatible with complete protection.

These permissions to attach conditions of any kind were subject to this, that the patentee had to prove that the man had at the time the opportunity of getting the machinery on reasonable terms without the conditions; in other words, it was worth his while taking the conditions although he could not have got the machinery on reasonable terms without them. What is more, if after that he repented he had the power to give three months notice in writing and get rid of the conditions, paying only such compensation as an arbitrator appointed by the Board of Trade thought fair for getting rid of them. It had to be shown that he could get the thing without conditions, and if he repented he could take the equivalent of the conditions, fixed by an independent authority, and so free himself. With that protection how can it be said there was any possibility of injustice.

I quite agree that there ought to be freedom in the use of patented articles; that is, that you ought to be able to get a patented article on fair terms. But that is protected by Article 38. The person who wants a special contract has to show that the public can get the article without the special contract, but if the terms of the special contract are so much better that the people would prefer them and prefer to remain under them, then it seems to me to be a perfectly unjustifiable interference with the liberty of dealing with your own property that the public should not be allowed the choice. I therefore think that the protection which your Lordships' House gave in the 1907 Act is perfectly adequate.

Let me go back to the real point that we are on now. Are we to say "unfairly prejudiced" or merely "prejudiced"? Surely with these protections, if we are going further to interfere with the liberty of commerce and competition, it ought to be because the conditions that are sought to be imposed do an unfair prejudice to someone who, like all the rest of the English nation, is entitled to pursue his own trade. Merely to say that it prejudices a trade appears to me to be a latitude of expression which would lead to very serious injustice. Therefore I advise your Lordships most earnestly to leave it as it has come to us from the Commons, so that this shall only apply when there is unfair prejudice.

THE LORD CHANCELLOR

The criticism of the Amendment to which we have just listened I confess appears to me to be shattering in its force, and still more so when it is recalled that the noble and learned Lord to whose argument the House has just had the opportunity of listening has, I suppose, conducted about ten times as many important patent cases as any advocate now at the Bar or any Judge now upon the Bench, and the Government are very fortunate indeed to have one of his high authority assent to the view taken by them of the form in which this clause is drafted. In my view his argument, founded upon the principal Act and upon the earlier Act, seems to be of overwhelming weight. I am not sure whether the noble and learned Lord who moved this Amendment had observed that on page 21 of the Schedule the addition made to subsection (1) of Section 3—

LORD PARMOOR

Yes, but I did not deal with it.

THE LORD CHANCELLOR

It is not without its bearing in this connection. It says in proceedings under this Act, "no person shall be estopped from applying for or obtaining relief by reason of any admission made by him as to the reasonableness of the terms offered to him under subsection (1) (i)." That is a provision. I say, which has some bearing even if the case put forward by the noble and learned Lord had as much substance as in my judgment, if I may say so without offence to him, it has little substance. His Amendment is most unhappily chosen to carry out his own particular purpose.

As the last speaker pointed out, the effect of the noble and learned Lord's Amendment is to broaden the provisions of this clause to a degree which the Government does not contemplate, and to which it certainly will not be a party. As your Lordships have been told, the object of this subsection is to enumerate the cases in which the monopoly rights under a patent shall be deemed to have been abused, and it is a serious thing to lay it down artificially that the monopoly rights of a patent shall be deemed to be abused except on real and substantial grounds, each of which can be defined in relation to its own merits.

If the Amendment were adopted the cases of the abuse of a patent under subsection (e) would be enormously and most dangerously widened. No one could support such a state of affairs. I could easily conceive many cases in which it might be contended, perhaps successfully, that there was prejudice, but in which it would be most unreasonable to argue that there was an abuse. Take the simple case of fountain pens. This is not a matter on which I can speak with authority, but to give an illustration there are, I believe, cases in which a special pen is sold only on condition that a certain ink shall be used in it, the justification of that stipulation being that mechanically no other ink could be used in it. Undoubtedly that would be prejudicial to other sellers of ink, but to say that it would be an unfair prejudice and an abuse of a patent would be most unreasonable. I am not sure whether the noble and learned Lord who moved this Amendment appreciated that the very words to which he objects are borrowed from two earlier Acts, and have worked with the utmost success—and in a very similar context—not, I agree, an identical context—

LORD PARMOOR

Not identical.

THE LORD CHANCELLOR

But in every relevant particular the same, as I will satisfy the noble Lord. In Section 24 (5) of the principal Act the following provision is contained— For the purposes of this section the reasonable requirements of the public shall not be deemed to have been satisfied.… And then you get a numerical statement under four or five heads, precisely as you get in this Bill a numerical statement under four or five heads, of the circumstances under which an abuse shall be unfair. So that the case is precisely identical, with the single and unimportant variation to which I have called attention. Under Sub-section 5 (b) you get the following provision— If any trade or industry in the United Kingdom is unfairly prejudiced … the very same words— by the conditions attached by the patentee before or after the passing of this Act to the purchase, hire, or use of the patented article or to the using or working of the patented process. And if the word "unfairly" had been omitted there that subsection would have been just as dangerously wide as this clause in the opinion of the Government would have been dangerously wide if the word "unfairly" were omitted here. The noble and learned Lord indicated his intention of dividing your Lordships on this Amendment. He is, of course, absolutely entitled to test his opinion in the Division Lobby but I am quite sure that my noble and learned friend is far too experienced a Member of Parliament, both in the other House and in this House, to put your Lordships to the trouble of a Division, unless he is satisfied that his proposal has some substantial measure of convinced support.

LORD PARMOOR

As regards what has been said by the noble Lord on the Woolsack, one is perfectly familiar with the argument he has used, to which I cannot assent. The argument used is—Give a trust company or a large financial corporation powers of this kind and they will use them beneficially for the purpose of traders, particularly small traders. I entirely dissent from that. I entirely dissent from the proposition, and from the inferences which are drawn from it, but that is a matter of general discussion, and I need not re-open it. My argument was within much narrower bounds than that, and to that argument no answer at all has been given. My argument was this, That if you grant a monopoly right under legislative powers you ought not to allow any patentee to use that monopoly right for indirect and other purposes. That was the basis of my argument, and, as far as I can see, no answer whatever has been supplied, and it is on that ground that I shall certainly seek to divide. Are you going to extend the monopoly granted against the trade of this country or not? That is the wide question, and the only question, to my mind, which is involved in this matter.

There are two other points which I think ought to be mentioned. I cannot agree with the noble and learned Lord that by putting restrictions on the use which a patentee may make of his monopoly right, and limiting them to the area of his patent grant, you interfere with what he called free contract at all. I say you interfere with free contract by allowing a person who has monopoly rights to make a contract dealing with those monopoly rights because he holds them. There is not the slightest reason why this philanthropic contract to which my noble and learned friend referred should not be carried out under principles of free contract. The only argument is that you must not use the monopoly right to enforce terms to which otherwise traders would not submit, which is a very different proposition.

One thing I might say with reference to what the Lord Chancellor has said. What we are dealing with here is the use of patent right for the prejudice of traders or manufacturers in the purchase, hire, licence, or use of the patented article. Surely, that ought not to be allowed at all. "Unfairly" there is not introduced in the way of ordinary limitation. It is not limited enough. Are you going to allow these patent rights to be used in order that the person who has them shall attach conditions to the purchase, hire, or licence of the patented article which are prejudicial to the industry of the United Kingdom? I regret that I have not got terms of the 1882 Act, to which the Lord Chancellor referred, before me, and I am not sure whether that section is any longer in force. My idea was that it had been repealed by the 1907 Act, and repealed by the 1907 Act certainly in terms by the provisions to which I referred, and which were quoted by the noble and learned Lord. But those provisions are not sufficient. Those provisions enabled any holder of patent right practically to enforce these conditions. It is all very well for the noble and learned Lord to say that you have an alternative. You have not got a practical alternative. If a man has got four machines—patented machines I presume—and if you want to use one of them—any person has a right to use them merely under the terms of the patent grant—you are told you are not to use it or the other machines unless you have certain terms attached to them. You do not have the free choice, and you cannot have the free choice, and that is what the manufacturers feel. I am sorry on this point to differ from the noble and learned Lord, but I have also had some experience in these patent matters, and I am bound to say I take an entirely contrary position from him.

On Question, Amendment negatived.

LORD PARMOOR moved, in subsection (3) (b) to leave out "A licensee under this paragraph shall be entitled to call upon the patentee to take proceedings to prevent infringement of the patent, and if the patentee refuses, or neglects to do so within two months after being so called upon, the licensee may institute proceedings for infringement in his own name as though he were the patentee, making the patentee a defendant."

The noble and learned Lord said: This is another matter which I want to bring to your Lordships' notice, because it appears to me it is one of the provisions in the Bill which presses harshly and unduly upon the inventor. If an inventor likes to grant an exclusive licence, of course, the person who holds the exclusive licence can take proceedings to prevent infringement of the patent, and also a licence may be granted in terms by the patentee, which gives the licensee a right to take steps to prevent the infringement of the patent. But this clause goes much further. It says that a licensee shall be entitled to call upon a patentee to take proceedings to prevent infringement. Surely that is very hard as regards the patentee himself. No doubt the patentee can be made a party to the proceedings, because he can be put in the position of a defendant. At the same time the position is that a licensee, who has not got exclusive rights and whom the patentee has not given a claim to bring an action in his name, can bring an action for an infringement (whether the patentee himself thinks it a right case or not), by merely adding the patentee as a defendant. I myself do not profess to think that this matter is of the same importance as the last revision, but I think it is very hard on the patentee that this power should be given. However, I am open to hear what is to be said upon it in support of the proposal.

Amendment moved— Page 3, line 18, to leave out from ("importation") to the end of the paragraph.—(Lord Parmoor.)

LORD MOULTON

Without a very short explanation this will be unintelligible to your Lordships, because it is purely a concession to the scruples of our Law Courts. It is proposed to give a licensee the power of defending his rights by bringing an action against an infringer; but by the law no one but the patentee can bring the action. The consequence is that the patentee is a necessary party to the action, and it is a rule of the Courts that all necessary parties to the action must be present. The result is that the licensee is allowed to bring in the patentee, but he cannot bring him in as a plaintiff so he is allowed to add his name as a defendant. Adding him as a defendant is a merely formal thing; and in order to render that clear I propose that there should be inserted, at the end of the paragraph which is objected to, these words: "A patentee who shall be added as defendant shall not be liable for any costs unless he enters an appearance and takes part in the proceedings. Service upon him may be effected by leaving the writ at the Patent Office." In other words, he is a formal party. He is not liable for costs; he need take no part in the matter; and, as he probably will be resident abroad, I suggest that merely leaving the writ for him at the Patent Office will be a proper provision. If the Courts would allow it, I think the best form would be to say that in such a case the patentee need not be a party to the action, but that would clash with the Rules of Law. I think my Amendment would remove all the difficulties that prompted my noble and learned friend to move his Amendment, and if his Amendment is rejected and mine substituted for it, I believe a satisfactory solution would be reached.

LORD PARMOOR

This would quite meet my view if the words are likely to be added.

THE LORD CHANCELLOR

I must confess that the intervention of my noble and learned friend (Lord Moulton) to-night in the debate is far more agreeable than it was last night. I would make this further observation, that I will certainly adopt his Amendment for the purposes of the Committee stage, guarding myself only in this respect that it may be that, between this stage and the Report stage, it might be proper to consider whether some discretion as to costs may be proper in a case where the patentee himself had, in the opinion of the Court, been guilty of some impropriety. The noble and learned Lord will be more familiar than I am with this kind of case, and he will no doubt between now and the Report stage apply his mind, as I will apply my mind, to that point.

Amendment, by leave, withdrawn.

Amendment moved— Page 3, line 25, insert ("A patentee who shall be added as defendant shall not be liable for any costs unless he enters an appearance and takes part in the proceedings. Service upon him may be effected by leaving the writ at the Patent Office."—(Lord Moulton.)

On Question, Amendment agreed to.

LORD EMMOTT moved to omit paragraph (d) of subsection (3). The noble Lord said: Section 27 of the principal Act, which is, being replaced by the new clause 27 now under discussion, is a very much shorter section, and its marginal note is "Revocation of Patent." Therefore the principle of revocation exists in the present law. At the same time, this new clause provides for new procedure. In paragraph (a) it provides for licences of right; in paragraph (b) it provides for the grant of an exclusive licence in certain cases; and in paragraph (c) it provides that in case an invention is not being worked owing to-shortage of capital an order may be made to grant to an applicant and to other people jointly with him (provided they find the money) an exclusive licence. Then it goes on in paragraph (d)—the omission of which I ant moving—to say that if the Controller is satisfied that the objects of the section cannot be obtained by the exercise of any of the foregoing powers he may order the patent to be revoked.

I should like to ask what cases of any importance are not covered by (a), (b), and (c)? If all the conceivable cases are covered by (a), (b), and (e), I suggest that paragraph (d) is not wanted. I think it is a mistake to revoke licences unless there is a very strong ground for doing so, and some cases can be named in which it might be an injustice. Sometimes there are a number of patents giving alternative methods of producing the same article, or having the same effect, all of which have been patented by the same man; one of which is being worked and the article is being produced, but the others are not being worked. If one that is not being worked is revoked, the value of the other patents that are being worked goes at the same time. That, I think, would be an injustice. This is not a very important point, but I should like to know why the power of revocation should be retained in this new Clause 27, and whether paragraphs (a), (b), and (c) do not cover any possible cases which can be brought.

Amendment moved— Page 4, lines 3 to 16, leave out paragraph (d).—(Lord Emmott.)

LORD MOULTON

This is a question on which I would advise the House to take the view of those who are accustomed to administer the jurisdictions under this Act. It is a question as to whether the provisions in paragraphs (a), (b), and (c) will in all cases be adequate to remedy abuses. It is needless to say that all remedies that have suggested themselves as applicable are specifically referred to in paragraphs (a), (b), and (c), but, ex abundanti cautela, the framers of the Bill have said that if there is a case in which these fail to remdy abuse it does not add at all to the list of things for which the remedies in paragraphs (a), (b), and (c) are to be used—but if they fail, there should, at the last, be a discretion in the Comptroller to go so far as to revoke the patent. I cannot think of any classes in which paragraphs (a), (b), and (c) would not be sufficient or I should advise that that class should be specifically dealt with; but, seeing that it is only a discretionary power, I think your Lordships would be quite safe in leaving it in the hands of a tribunal which is sure to be reluctant to exercise it, in order that, if such a case arises, they might have the power. It is a matter on which, speaking for myself, I should follow the view expressed in the Bill, not (as the last speaker has said) regarding it as a very important matter, but as a reasonable precaution in case there should be something which could not be dealt with otherwise.

LORD PARMOOR

Before the Lord Chancellor answers, I may say that I have an Amendment down in similar terms to that of the noble Lord for the omission of paragraph (d). I agree with him that it is not a matter of first-rate importance, but my view that he is right has been confirmed, I think, by what has been said by the noble and learned Lord, Lord Moulton. Lord Moulton with all his experience, says that he is satisfied that paragraphs (a), (b) and (c) cover all cases that you can foresee. I do not say that you can always foresee everything. Undoubtedly, the matter has been very carefully considered, and so far as I have read the paragraphs through, they appear to be exhaustive.

Then he says, Why not add this power of giving what is a discretion to the Comptroller? I think the answer to that is very strong. If you have really provided for everything in paragraphs (a), (b) and (c) it is a very drastic matter for any one to have his patent revoked. He has been given his grant for a period of time, whatever it may be; he has got his statutory right during that period; and I do not think that revocation ought to be at the discretion of any one, unless there is some real cause shown that there are probable cases in which the revocation might be useful and might be utilised. That is one of the provisions of the Bill which I think tell hardly, certainly against the inventor. Why, if he is subjected to the penalties and provisions of paragraphs (a), (b) and (c), should he also be subjected to the risk of revocation? It is a serious matter for him. I certainly agree with the noble Lord that no ground has been shown for its retention, and I think the noble and learned Lord gave strong grounds to the contrary.

LORD CLIFFORD OF CHUDLEIGH

As an inventor and patentee—I have taken out eight patents this year, and I mean to take out the same number every year—I think there is no necessity for the paragraph. The previous paragraphs have already provided for everything that is necessary, and to give such a power of revocation without some special reason for it, seems to me to be penalising the inventor unnecessarily. I should, therefore, support the omission of the paragraph. It might—I do not say it would—lead to evils which are not apparent on the face of it.

THE UNDER-SECRETARY OF STATE FOR WAR (VISCOUNT PEEL)

I am very glad to have the powerful support of the noble and learned Lord (Lord Moulton) against this Amendment. The noble and learned Lord said he desires to leave the matter in the discretion of the officials as it is now. The argument of my noble friend Lord Emmott was this. He said, "You have provided in the earlier portions of the clause different remedies for the different mischiefs that might arise as regards the non-use of patents; you have provided in certain cases for 'licences of right'; and you have provided in certain cases that exclusive licences should be granted; what other cases are there left for which provision should be made by the more severe remedy of the revocation of the patent?"

Before I say a word on that subject may I point out what is the history of the clause? Before the clause appeared in this Bill the Comptroller bad only one remedy—that is to say, he could revoke the patent. These other provisions are inserted in order that the milder remedies may be used in these cases of difficulty. Now my noble and learned friend wants to cut away the remedy of revocation, which was the only remedy before the Bill was brought in. I submit that it would be unwise to cut away this old remedy.

My noble friend asks, What are the cases which are not met in paragraphs (a) (b), and (c) but which could be met in (d)? I think there are such cases. May I give an example of the kind that I mean? Suppose you have a German who has a patent which he does not want to work and does not want to say very much about, because there is another patent dealing with the same matter, in which he is interested and which is bringing him in a certain amount of money. You are there, by the English law, protecting this patent. Certain remedies are provided in the way of giving an exclusive licence to other people. What has this particular German done in this case? He really has made use of the laws of this country to conspire against the advancement of trade in this country by deliberately preventing an advantageous patent from being worked.

If this case is brought before the Comptroller, why should this man get the advantage of having money paid him for licences granted under this patent? Is it not really a case of the abuse of monopoly and of the abuse of the rights which he is granted under the law? Is it not fair, in cases of that class, not merely to give some particular person or persons the right over payments to this man for working the patent, but to say, "You really have abused your right under the Patent Law, and we are going to revoke the patent." I submit that in cases of that kind, and in other cases which no doubt will occur to your Lordships, that the right should be retained.

May I read the first words of the paragraph— If the comptroller is satisfied that the objects of this section cannot be attained by the exercise of the foregoing powers. … Therefore, before use of the extreme remedy is made, he has to satisfy himself that none of the previous remedies can meet the case. That, I submit, is sufficient protection against any sort of arbitrary use of this power of revocation on the part of the Comptroller.

LORD PARMOOR

In answer to the noble Viscount I should like to say that revocation at the present time is not applicable to these matters which are called the "abuse of monopoly" under this Bill. Of course, there are terms on which patents can be revoked. They are well known and very special, but they are not as regards the abuse of monopoly right with which we are dealing here. It would be quite novel as regards these matters.

LORD EMMOTT

I must confess I am not at all convinced by the arguments used against the Amendment. No real case has been brought forward, with all due deference to the noble Viscount, who instanced two patented articles, one being used and the other not being used. In paragraphs (a), (b) and (c) you have ample powers of dealing with that case, and you would not need the power of revocation which would never be used. The reason I brought it forward is this. The Bill is said to be an attempt to help poor inventors. What is there in the Bill which does that? If the power of revocation is not really required I maintain that it should be struck out. If it is required, let it be kept in; but no case has been made out that it is required.

THE LORD CHANCELLOR

Surely the last observation made by Lord Peel ought to have dispersed any apprehensions in the mind of the noble Lord. My noble friend called attention to the fact that there is nothing to which this sub-section can apply, and the noble and learned Lord, Lord Moulton, also called attention to the fact that all human ingenuity, when exercised, is both fallible and incomplete. Nothing is a more common thing in our experience than that cases have been overlooked. The long series of supplementary legislation which has been passed is full of cases where some one has failed to foresee a contingency which nevertheless soon happened. This subsection cannot operate unless such cases arise.

LORD EMMOTT

it is a bureaucratic remedy; and I hate bureaucracy.

THE LORD CHANCELLOR

Had the noble Lord put his argument in that form, which apparently is the real one, my noble friend would have addressed different arguments to your Lordships.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in subsection (3) (e), to leave out "he may refuse" and to insert "under the above provisions of this section he may make an order refusing." The noble and learned Lord said: This is merely a formal Amendment.

Amendment moved— Page 4, line 19, leave out ("he may refuse") and insert ("under the above provisions of this section he may make an order refusing").—(The Lord Chancellor.)

On Question, Amendment agreed to.

LORD PARMOOR moved, in subsection (6), to leave out "may if he thinks it fair and equitable" and to insert "shall." The noble and learned Lord said: This is an Amendment which I have put down in the hope of protecting the inventor. The words of the subsection are: "but on granting an exclusive licence the Comptroller may, if he thinks it fair and equitable, make it a condition that the licensee shall get proper compensation." I think in all cases where an exclusive licence is granted proper compensation, fixed by the Comptroller, ought to be given. It should not be a matter within his discretion. The words "fair and equitable" leave it in his discretion. I do not see what discretion there ought to be. An exclusive licence is granted and proper compensation should be given. The words amount, after all, to the outlook of a particular person, whereas under circumstances of this kind a patentee ought to be protected and ought to have proper compensation.

Amendment moved— Page 5, line 12, leave out ("may if he thinks it fair and equitable") and insert ("shall").—(Lord Parmoor.)

LORD MOULTON

I hope that these words will be left in. If a patentee uses his patent for the purposes of hindering trade and brings this penalty upon himself by his misbehaviour, I cannot see why you must pay him all he has expended in making his invention, of which he refused to allow the State to have the benefit. I quite agree that fair and equitable compensation should be given, but to say that it must automatically be given, when it is a case of punishment for misuse of the special rights he has been given would, I think, be a very grave blot on the Bill.

THE LORD CHANCELLOR

I could not add a single word to the admirable statement of the reasons given by the noble and learned Lord (Lord Moulton) why it is not possible to accept the Amendment.

LORD PARMOOR

Where I think Lord Moulton is wrong is that he seems to assume that the grant of an exclusive licence is in the nature of a penalty. It need not be so at all. I shall not press the matter to a Division against the views expressed.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in subsection (8), to leave out "on" [appearing on the Register"] and to insert "from." The noble and learned Lord said: This is a drafting Amendment.

Amendment moved— Page 5, line 27, leave out ("on) and insert ("from").—(The Lord Chancellor.)

On Question, Amendment agreed to.

LORD PARMOOR moved, in subsection (11), after "section," to insert "or made on an application to amend the specification." The noble and learned Lord said: The effect of the Amendment is to make an appeal from the Comptroller go before the Court and not before the Law Officers.

THE LORD CHANCELLOR

Would it save time if I pointed out to the noble and learned Lord that this Amendment has no reference to the matters dealt with in this clause? If he will look at Section 21 of the Act of 1907 he will see that it deals with the amendment of specifications, and an appeal is provided in that section to the Law Officers. If he desires to change this appeal to the Court, an amendment should be made at a later stage.

LORD PARMOOR

I think the noble and learned Lord is right, and I will reserve the point.

Amendment, by leave, withdrawn.

Clause 1, as amended, agreed to.

Clause 2:

Provision, as to patents endorsed "licences of right."

2. For section twenty-four of the principal Act the following section shall be substituted:— 24.—(1) At ally time after the sealing of a-patent the comptroller shall, if the patentee so requests, cause the patent to be indorsed with the words 'licences of right,' and a corresponding entry to be made in the register, and thereupon—

1. (a) any person shall at any time thereafter be entitled as of right to a licence under the patent upon such terms as, in default of agreement, may be settled by the comptroller on the application of either the patentee or the applicant:
• Provided that any licence the terms of which are settled by agreement shall be deemed, unless otherwise expressly provided, to include the terms and conditions specified in paragraphs (c) and (d) of this subsection as if they had been imposed by the comptroller thereunder in like manner as if the terms had been settled by the comptroller:
2. (b) in settling the terms of any such licence the comptroller shall be guided by the following considerations—
1. (i) he shall, on the one hand, endeavour to secure the widest possible user of the invention in the United Kingdom consistent with the patentee deriving a reasonable advantage from his patent rights;
2. (ii) he shall, on the other hand, endeavour to secure to the patentee the maximum advantage consistent with the invention being worked by the licensee at a reasonable profit in the United Kingdom;
3. (iii) he shall also endeavour to secure equality of advantage among the several licensees, and for this purpose may, on due cause being shown, reduce the royalties or other payments accruing to the patentee under any licence previously granted:
• Provided that in considering the question of equality of advantage the comptroller shall take into account any work done or outlay incurred by any previous licensee with a view to testing the commercial value of the invention or to securing the working thereof on a commercial scale in the United Kingdom:
3. (c) any such licence the terms of which are settled by the comptroller may be so framed as to preclude the licensee from importing into the United Kingdom any goods the importation of which, if made by persons other than the patentee or those claiming under him, would be an infringement of the patent, and in such a case the patentee and ail licensees under the patent shall be deemed to have mutually covenanted against such importation:
634
4. (d) every such licensee shall be entitled to call upon a patentee to take proceedings to prevent the infringement, of the patent, and it the patentee refuses, or neglects to do so within two months after being so called upon, the licensee may institute proceedings for the infringement in his own name, as though he were patentee making the patentee a defendant:
5. (e) if in any action for infringement of a patent so indorsed the infringing defendant is ready and willing to take a licence upon terms to be settled by the comptroller no injunction against him shall he awarded, and the amount recoverable against him by way of damages (if any) shall not exceed double the amount which would have been recoverable against him as licensee if the licence had been dated prior to the earliest infringement:
• Provided that this paragraph shall not apply where the infringement consists of the importation of infringing goods:
6. (f) the renewal fees payable by the patentee of a patent so indorsed shall as front the date of the indorsement be one moiety only of the fees which would otherwise have been payable.

(2) The comptroller shall, before acting on any request to indorse a patent made by the patentee under this section, advertise such request in the Illustrated Official Journal (Patents), and shall satisfy himself that the patentee is not precluded by contract from making such request, and for that purpose shall require from the patentee such evidence, by statutory declaration or otherwise, as he may deem necessary:

Provided that, a patentee shall not be deemed to be so precluded by reason only of his having granted a licence under the patent where the licence does not limit his right to grant other licences.

(3) Any person alleging that a request under this section has been made contrary to some contract, in which he is interested may apply to the comptroller within the prescribed time and in the prescribed manner, and the comptroller, if satisfied of the truth of such allegation, shall refuse to indorse the patent pursuant to the request or shall cause the indorsement, if already made, to be cancelled.

Any order under this subsection shall be subject to appeal to the court.

(4) All indorsements of patents under this section shall be entered on the register of patents and shall be published in the official journal of the Patent Office, and in such other manner as to the comptroller may seem desirable for the purpose of bringing the invention to the notice of manufacturers.

(5) If at any time it appears that in the case of a patent so indorsed there is no existing licence the comptroller may, if he thinks fit, on the application of the patentee and of payment by him of the unpaid moiety of all renewal fees which have become due since the indorsement, after due notice cancel the indorsement, and in that case the patentee's rights and liabilities shall be the same as if no such indorsement had been made."

Lord Parmoor had an Amendment on the Paper to leave out paragraph (d) of subsection (1). The noble and learned Lord said: I do not propose to move this Amendment. But I should like the same words introduced here to protect the patentee against costs inserted.

Amendment moved— Page 8, line 7, at end, insert ("A patentee who shall be added as a defendant shall not be liable for any costs unless he enters an appearance and takes part in the proceedings. Service upon him may be effected by leaving the writ at the Patents Office").—(Lord Parmoor.)

THE LORD CHANCELLOR

I agree.

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved, in subsection (4), to leave out "Official Journal of the Patents Office" and to insert "Illustrated Official Journal (Patents)." The noble and learned Lord said: This is a verbal Amendment.

Amendment moved— Page 9, line 5, leave out ("Official Journal of the Patent Office") and insert ("Illustrated Official Journal (Patents)").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved, in subsection (5), to leave out "of" ["and of payment"] and to insert "on." The noble and learned Lord said: This is a verbal Amendment.

Amendment moved— Page 9, line 10, leave out the second ("of") and insert ("on'').—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 2, as amended, agreed to.

Clause 3 agreed to.

Clause 4:

Amendment of s. 11 of principal Act as to opposition to grant of patent.

4. For paragraph (b) of subsection (1) of section eleven of the principal Act, which relates to the opposition to grants of patents, the following paragraphs shall be substituted:— (b) that the invention has been published in any complete specification or in any provisional specification followed by a complete specification deposited pursuant to any application made in the United Kingdom within fifty years next before the date of the application for the patent the grant of which is being opposed, Or in any document (other than a British specification) published in the United Kingdom prior to the application; or (bb) that the invention has been claimed in any compete specification for a British patent which though not published at the date of the application for a patent the grant of which is opposed will be of prior date to such patent; or and after paragraph (d) of the same subsection the following paragraph shall be inserted— (e) that in the case of an application under section ninety-one of this Act a specification describes or claims an invention other than that for which protection has been applied for in a foreign state or British possession and that such other invention forms the subject of an application made by the opponent in the interval between the leaving of the application in the foreign state or British possession and the leaving of the application in the United Kingdom.

LORD MOULTON rose to move an Amendment which was not on the Paper.

THE LORD CHANCELLOR

If this is one of the Amendments of which the noble and learned Lord spoke to me I propose to accept it, if he will say a word or two in explanation.

LORD MOULTON

If your Lordships will look at Clause 4, paragraph (b), you will see that it is proposed to extend the material that may be brought before the Patent Office before a patent is granted. Up to this time it has been restricted, I believe, to specifications of patents actually granted in the United Kingdom. It is thought that that is making them do their work in blinkers, and that that which has been "published" in the United Kingdom should be capable of being brought by the opposers before the Patent Office, in order that they may not grant a patent which as soon as it is challenged in Court will be declared to be invalid. It will put a great deal more work on the Office, but I think it is a very wise concession on their part. I have, however, an observation to make on the language which they have adopted.

This clause says that for paragraph (b) of subsection (1) of Section 11 of the principal Act the following paragraph shall be substituted: "(b) that the invention has been published in any complete specification or in any provisional specification followed by a complete specification deposited pursuant to any application made in the United Kingdom Within fifty years next before the date of the application for the patent the grant of which is being opposed, or in any document (other than a British specification) published in the United Kingdom prior to the application." That sounds quite right. If it is in a document published in the United Kingdom it will be fatal to the patent and therefore ought to be a ground of opposition.

But the framers of the clause have forgotten the extraordinary meaning that is given in our Courts to the word "published." A private letter from one person to another is a publication. It would be a publication of a libel, and it would be a publication of an invention, and it is clear that we do not want to put upon the Patent Office the task of going into an investigation as to whether a certain document was actually in existence at a certain date. What is meant is what in the common parlance is styled "publication." I have had the privilege of discussing this matter with the Solicitor-General, who has charge of the drafting of this Bill, and he quite agrees that leaving the word "published" alone would be unwise, and he suggests that after the word "or" should be inserted the words "has been made available to the public by publication in any document." I think that will accomplish the object of the clause much more satisfactorily, and I move the Amendment in that form.

Amendment moved— Page 9, line 30, after ("or") insert ("has been made available to the public by publication").—(Lord Moulton.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment in my name is drafting.

Amendment moved— Page 9, line 40, at the beginning insert ("or").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 4, as amended, agreed to.

Clause 5 agreed to.

Clause 6:

Terms of patent.

6.—(1) The term limiting the duration of patents shall be increased from fourteen to sixteen years, and accordingly in subsection (1) of section seventeen of the principal Act, for the word "fourteen" there shall be substituted the word "sixteen."

(2) Any patent the original term of which had not expired at the elate of the commencement of this Act shall have effect as if the term mentioned therein was sixteen years instead of fourteen years, subject to the following conditions:—

1. (a) any licence existing at that date which has been granted for the term of patent shall be treated as having been granted for the term as so extended if the licensee so desires;
2. (b) if the patent would apart from this section have expired on or before the first day of January nineteen hundred and twenty, the patent shall during the period of extension be subject to all the provisions by this Act substituted for section twenty-four of the principal Act (except subsection (5) thereof) as if the patent had been endorsed "licences as of right."

(3) Where any party to a contract with the patentee or any other person entered into before the nineteenth day of November nineteen hundred and seventeen, is subjected to loss or liability by reason of the extension of the term of any patent under the provisions of this section, the court shall have power to determine in what manner and by which parties such loss or liability shall be borne.

LORD PARMOOR moved, in subsection (1), after "The term limiting the duration of patents shall," to insert "be calculated from the date of the patent grant and shall". The noble and learned Lord said: This is a matter which is perhaps not of first rate importance, but I think it will be a distinct improvement on the existing law. The object of my amendment is this: At the present time the patent grant dates from the time of the application. Now, there is very often a long period between the application and the grant, sometimes amounting to nearly a year, and in many cases to a considerable number of months, and of course nothing can be done really until the patent grant has been obtained. I suggest that the patent grant is a much more certain date to take than the date of the application for a patent. I do not think it is a matter of first rate importance, but I hope that the Amendment may be considered. Of course the effect would be to give a rather longer term than if it were calculated from the date of the application, but I do not think myself that the extension from fourteen to sixteen years is any too much, although in substance you get nearly another year between the date of the application and the grant of the patent. A great many people have called my attention to this matter, and it is my experience that you get a better and more certain date if you take the date of the grant and not the date of the application.

Amendment moved. Page 10, line 26, after ("shall") insert ("be calculated from the date of the patent grant and shall").—(Lord Parmoor.)

LORD MOULTON

I am very sorry so frequently to differ from my noble and learned friend, for whose opinion I have such great esteem, but I think this is a matter of grave importance. If you want to increase the period of a patent do it by increasing the length of the grant, as it is proposed to do in this Bill, but it is most important that the date of that grant should not be capable of being altered by the way in which proceedings are carried on in order to obtain the patent. That is the first evil of the American system.

Let me tell your Lordships a case that I know of. There was a very great invention made. It was discovered that, although it was quite a novel invention in one respect, it infringed an obscure invention that was ante-dated. So long as that patent remained unrevoked of course the owners of it charged royalty. The proceedings for getting the grant of the second patent, although I believe the application dated only a year afterwards, were prolonged for seventeen years, and then when the first patent had expired the second patent matured to a grant, and they practically, therefore, by delaying the proceedings, gave a monopoly of thirty-four years. I know of my own knowledge two patents, one of 1904 and the other of 1905, in which the interference proceedings are not yet finished. No person dare use the invention because some day the grant will be made, and the infringing articles cannot be used. It is of the greatest importance, and it is the interest of everybody, that the proceedings should not be prolonged, and seeing that in these proceedings it is the patentee who is the mover, nothing will make him show the diligence that he should show so much as the knowledge that it will be of benefit to him to get the grant earlier. If you wish to increase the length of his grant do it, but do not change the date. Let it be from the date on which the application is made—the date which is ultimately attached to the grant.

THE LORD CHANCELLOR.

I find myself, as usual in this matter, in such complete agreement with the noble and learned Lord who has just spoken that it is only necessary for me to point out, what indeed he has already said more elaborately, that the Amendment would have the effect of prolonging the period of the patent for such time as is consumed by the applicants in obtaining the grant of their patent. It is already proposed, as is well known, by this Bill to extend the term of patents for two years, and if my noble and learned friend's Amendment were also accepted it might quite easily prolong the period of protection for a further two years—not in every case, but in some cases. I am quite sure that my noble and learned friend himself would not desire that all the mischiefs of such a state of things should arise, and I would suggest to him that his main point, which is on the length of time of the protection, might be argued when we come to the more important Amendments that deal with the subject.

LORD PARMOOR

I do not intend to press the Amendment, but I should like to say that I entirely differ from Lord Moulton, because delay in taking out a patent grant comes, in my experience, from office matters and not from the patentee at all. I do not, however, press the Amendment after what has been said.

Amendment, by leave, withdrawn.

LORD EMMOTT had on the Paper the following proviso to be inserted at the end of subsection (1): "Provided that in every case where the patentee has been hindered in the use of his invention during the war, and in consequence of causes arising out of the war, that in such cases in calculating the terms limiting the duration of any patent, the period from the fourth day of August nineteen hundred and fourteen, to the official date for the termination of the war, shall not be included or taken into account except in the case of patents owned or controlled by persons who are, or were, subjects of the States with which His Majesty's Government has been at war."

The noble Lord said: The Amendment at this point, in regard to which I happen to have precedence, raises a most important question—perhaps the most important question upon the Bill—but there is another Amendment down in the name of my noble friend Lord Grey, which puts the claim in a rather wider form than mine, and it appears to Die, as a matter of Parliamentary convenience, that it would be more convenient if the noble Lord moved his Amendment first.

VISCOUNT PEEL

Do I understand that my noble friend withdraws his Amendment?

LORD EMMOTT

No, certainly not.

VISCOUNT PEEL

You do not move it?

LORD EMMOTT

I do not lose my chance of speaking. I can put my case on the other Amendment, but it seems to me, as a matter of fact, that the real point is this. I should somewhat queer the pitch for my noble friend opposite if I argued on the narrower lines of Inv Amendment. I think, as a matter of Parliamentary convenience, he should have the first turn.

VISCOUNT PEEL

I did not in the least desire to urge my noble friend to queer anybody's pitch, but I was not quite clear whether he meant to move his Amendment or not.

THE LORD CHAIRMAN

The noble Lord does not move his words, leaving Lord Grey to move his?

LORD EMMOTT

I can suggest mine as an alternative.

EARL GREY moved, at the end of subsection (1), to insert— ("Provided that in calculating the term limiting the duration of any patent, the period from the fourth day of August nineteen hundred and fourteen, to the official date for the termination of the war, shall not be included or taken into account: And provided further that where any patents have lapsed under the principal Act daring the period in question, no penalties for infringement shall be recoverable by the patentee from the infringer in respect of such infringement until the patent or patents have been reinstated, after which any person desiring to continue such use of the patented invention, such person shall only do so on payment of royalties to be settled in default of agreement by the Board of Trade.")

The noble Earl said: I am not sure that the Amendment down in my name does not cover almost too wide a ground; still I have placed it upon the Paper in view of the source from which it was asked that it should be moved, namely, the British Commonwealth Union, a body whose arguments are properly entitled to be heard in your Lordships' House. The effect of this Amendment would be a complete moratorium in favour of holders of patents, and I gather that the main object in asking your Lordships to consider such a suggestion is that such a moratorium, as I understand, has in fact been granted to patent holders not only in France but also in Belgium. That is one ground on winch the suggestion is made that patentees should be similarly considered here. The other grounds upon which this is urged refer more to Section 7, and I hope that your Lordships will allow me to refer to that section in speaking upon this Amendment. If I may have the indulgence of the House I would tell your Lordships what those who have asked me to move this Amendment say. They say that Section 7 subsection (2) of the Bill purports to deal with the hardships and losses suffered by the holders of British patents by reason of the war. The relief offered thereby is wholly inadequate, and is an instance of legislation the benefit of which can only be obtained by the wealthy. This amounts to a denial of the rights to the working man or poor patentee. Under Section 7 subsection (2) the patentee, in order to obtain relief, must apply to the courts and show cause. The expense in each case attendant upon such an application would probably amount to £1,000. That is prohibitive to the poor man. In another place Sir Auckland Geddes stated that the Bill was introduced for the purpose of assisting and encouraging poor inventors. This Amendment will largely help to achieve that object. I do not wish in any way to press the Amendment upon the House, but I should like it to be considered in view of the quarter from which it is suggested. I am quite aware that many patent holders have derived great gain from the fact of the war, and therefore it would perhaps not be reasonable to suggest that they also should receive an extension when they have benefitted from the war and not suffered from it. But if the Government do not feel able to accept this, I do not wish to press it.

Amendement moved— Page 10, line 29, at end insert the said provisoes.—(Earl Grey.)

VISCOUNT PEEL

I am much struck by the fact that the noble Lords who have put down Amendments on these matters do not seem very pleased with their Amendments. My noble friend Lord Emmott rather refrained, I think, from dealing with the exact words of his Amendment, and my noble friend opposite moves his Amendment with a good deal of apology. Because I think he says himself there are one or two very serious objections to it, and he has pointed them out in very forcible language. Let us see what he means to do? He says— In calculating the term limiting the duration of any patent "— I do not know how that is to be done, or who does the calculation. He goes on— the period from the fourth day of August nineteen hundred and fourteen, to the official date for the termination of the war "— and of course, we have not got anywhere near that at present— shall not be included or taken into account. It must be obvious to your Lordships, as I think it was to my noble friend, that it would be absolutely impossible to accept an Amendment of that kind. That says that all patents running during the war up to this time should have another five years' prolongation, although it is common knowledge that the people using numbers of these patents have made vast sums arising directly out of the war.

The effect, therefore, of this Amendment is simply to give to a great number of profiteers a larger opportunity of profiteering. My noble friend, therefore, will hardly expect that the Government will give any assistance to a course of that kind. A general prolongation of patents in that way will, I think my noble friend sees, be entirely impossible. But his Amendment goes much farther than that because it says that Where any patents have lapsed under the principal Act during the period in question, no penalties for infringement shall be recoverable by the patentee from the infringer in respect of such infringement until the patent or patents have been reinstated. What is the position? A certain number of patents have lapsed, we will say in August or September, 1914. Therefore, the invention is then perfectly free. Anybody can make use of it or take it up. And people have spent sums of money and developed businesses on the strength of the fact that they can use these inventions perfectly freely.

Now my noble friend wants to turn round and say that these articles shall, as it were, be re-patented. I submit it is impossible to restore patents that have lapsed. New interests may have been formed, new businesses started, money lent on the security of these patents, and it is really impossible to try and restore this situation and go back and re-patent inventions which have already been allowed to be free. Indeed, I am not quite sure what happens in these cases, for he goes on— After which any person desiring to continue such use of the patented invention, such person shall only do so on payment of royalties to be settled in default of agreement by the Board of Trade. I am not certain whether the people using the inventions can still go on using them after this has been passed, or whether they have to wait until the royalty has been settled by the Board of Trade. But the general objections to the words are so strong that perhaps I need not deal with that particular point.

LORD EMMOTT

I am afraid I have made rather a mistake in not moving my own Amendment. I did not know that my noble friend opposite was going to move his with so little recommendation of its actual form. The arguments used against his Amendment do not apply to mine. Here is a great grievance. It cannot be got rid of by the language used by the noble Viscount. There are a large number of people who have suffered by the war, and in consequence of the war. The fact that others have gained in regard to other patents by the war merely makes the injustice suffered by the men whose patents have been abridged by the war the more acute. There is a very real case of grievance there. Men, either patentees themselves or the owners of works which were using patents in force, had their works taken for munition purposes. Their staff was largely depleted in order to recruit our fighting forces. They were unable entirely during the war to use their patent and they have not had a fair run for them because the war lasted four or five years. I quite admit there is one argument as regards both Lord Grey's Amendment and my own which may be used, namely that the words "the period from the fourth day of August nineteen hundred and fourteen to the official date for the termination of the war" may be rather too wide, and it would be better to state a specific period of four or five years, or something of that kind. That, however, is a minor point. What I say is that there is a very real grievance, and I have heard nothing from the Government showing that they have any idea that there is such a grievance or that they have any intention of remedying it.

VISCOUNT PEEL

I was dealing with this Amendment and this Amendment alone, and on the other Amendment of my noble friend (Lord Peel) which, I submit, deals much more closely with the subject I certainly intend to state the whole case. But I really cannot state the whole case on an Amendment which does not meet it in any way and under which there are objections so grave, that I think it had better be withdrawn.

LORD EMMOTT

What does the noble Lord desire? I am willing to do anything. If the noble Lord opposite will withdraw, I can move my Amendment.

VISCOUNT PEEL

I am quite ready for any course, but it was by the wish of the noble Lord himself that he gave way to the noble Earl. I am inclined to think personally that we could develop the case more fully on the Amendment of Lord Parmoor.

EARL GREY

I should not have accepted the offer of Lord Emmott to move my Amendment first if I had not understood that it was open to discuss his Amendment after. In the circumstances I should like to withdraw.

Amendment, by leave, withdrawn.

THE LORD CHAIRMAN

Lord Emmott's Amendment, which came first, was not moved. I had to take that first. After Lord Grey's Amendment, if we follow the usual course, we would take Lord Parmoor's Amendment.

LORD EMMOTT

Have I not a right to move my Amendment?

THE LORD CHAIRMAN

Unless the House is willing that the noble Lord should move it, regarding it as an Amendment without notice, he has not tree right.

LORD EMMOTT

Other Amendments have been moved this afternoon without notice.

THE LORD CHAIRMAN

Certainly, if it is the wish of the House that it should be done.

THE LORD CHANCELLOR

But surely that was only done on a written Amendment of which I had had notice, and of whose tenour there was some means of apprising the House. I had unfortunately to leave the House just now on some public business, but I ant told that Lord Emmott was quite plainly left the alternative of moving his Amendment or leaving it to be put by other speakers. If, having had that alternative and being himself extremely experienced in Committee, he did not move, I should think it is extremely unlikely that your Lordships—unless your Lordships think it could not be raised on another Amendment, and it could undoubtedly—would allow this to be a locus pœnitentiœ.

LORD EMMOTT

There is no sort of question about what would have been the procedure in the other House. My Amendment could have been moved there.

THE LORD CHANCELLOR

After the House had gone past it?

LORD EMMOTT

Amendments can be moved in Committee without notice. My Amendment is down on the Paper, and if this Amendment were withdrawn I should have been perfectly in order in moving mine.

THE LORD CHANCELLOR

The noble Lord was in an authoritative position in the other House and I was not; but if my noble friend tells me that in the other House, after having been invited to move an Amendment he said he did not move it, and a later Amendment had been taken, I do not agree that he would have been allowed to go back again to his Amendment.

THE LORD CHAIRMAN

I have never known of a case where an Amendment on the Paper was not moved and a subsequent Amendment on the Paper was moved, that we then went back to the Amendment that was not moved before.

LORD EMMOTT

It was my ignorance of the procedure of your Lordships' House. Had I understood what was involved in it I should not have withdrawn my Amendment. In the circumstances, I suppose I can speak on the Amendment of the noble and learned Lord, Lord Parmoor?

THE LORD CHAIRMAN

Certainly. But I understand that Lord Grey's Amendment is now, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 agreed to.

LORD PARMOOR moved to insert a new clause after Clause 7. The noble and learned Lord said: Every one will agree with what has been already stated that this is a very important and difficult subject. We want to retain the rights of those who were deprived of what their rights would naturally have been during their period of national service. At the same time, there is a great difference in the conditions in various cases, and I think we have carefully to safeguard rights which have grown up in the meantime.

The new clause which I propose has been drafted with very great care, and I may say at once that the objection raised against it (which I do not think is a valid objection) is that there would be a difficulty in the Comptroller's Office. We all know that the Comptroller has very adequate assistance in these cases, therefore I think his Department might deal with the matter. I would call your Lordships' attention to the fact that in France they have had the same difficulty, and I have had forwarded to me the terms of the method by which they have dealt with this difficulty there. The terms of the French provision are substantially the same as those which I propose in my new clause. I do not mean to say that this ought to be a necessary guide in the matter, but it shows that another Government, which must have met with practically the same difficulties, have found a solution on substantially the same grounds. I do not want to stand to the exact terms of my Amendment, and if after hearing it read the Government can assent to the principle of it and leave it over for further consideration, that will be sufficient. It is an extremely difficult and complicated matter; you cannot deal with it en gros (as it were); you have to deal with it in much greater detail.

I will now read my proposed new clause and comment upon it as I go along. Subsection (1) provides that where by reason of national service in connection with the present hostilities a patentee has been wholly or partially prevented from dealing with or developing his invention during performance of such national service, he may apply to the Comptroller in the prescribed manner for an extension of the term of his patent. Therefore there must have been national service, and interference with the development of his patent invention during the performance of such national service. Those two limitations of course are quite right.

Subsection (2) provides that the application shall be made as soon as may be after the termination of such service. It is right that the matter should be settled as quickly as possible.

In subsection (3) I provide that the Comptroller shall advertise the application in the prescribed manner, and within such time as may be prescribed any person interested may give notice of opposition at the Patent Office, and the Comptroller shall if required hear the opponent and the patentee. The object of this is to deal with the fear which, I think, Lord Emmott expressed—namely, that you must have regard to rights which have sprung up in the interim and give due weight to them.

Subsection (4) proposes to enact that if the Comptroller be satisfied that there has been no undue delay in making the application and that the circumstances warrant an extension of the term of the patent, he may make an order extending the term, and such order may be made subject to such terms as the Comptroller may see fit. I think a matter of this kind can properly be left to the discretion of the Comptroller who has great knowledge in these matters.

Subsection (5) of my proposed clause runs: "The extension of the term of the patent shall be such as in the opinion of the Comptroller, having regard to all the circumstances, compensates the patentee, but shall in no case exceed the period during which the patentee was, while performing national service, prevented from dealing with or developing his invention." That absolutely excludes what has been called the profiteer; and although you may give the patentee an extension over the whole time he was engaged on national service, whereby he was prevented from developing his patent, within the Comptroller's discretion in a proper case a smaller term may be given. Obviously this is the extreme term that ought to be given in order to compensate him.

The sixth subsection provides that an application may be made in respect of a patent which has already expired, but in such event the Comptroller shall consider the interests of persons who may have availed themselves of the subject-matter of the patent after the same had expired and any order made by the Comptroller may be subject to provisions protecting such persons. Undoubtedly there is a difference in the case where the patent has expired and in cases where it is still in operation; but, even where it has expired, if it has expired during a period of national service when advantage could not be taken of the patent rights, I think the person who has been engaged in such national service ought to be protected. These are limiting words. The clause could be taken without subsection (6), though I think that subsection should be inserted.

Subsection (7) provides that an extension of the term of a patent under this Act shall be without effect on any proceedings under section eighteen of the Patents and Designs Act, 1907, save that the date of the expiration of the extended patent shall be the date from which the limiting period for presenting any petition under that section, shall be, reckoned. That is merely a formal matter of administration.

Finally, subsection (8) provides that any decision of the Comptroller under this suction shall be subject to an appeal to the Court. I believe that all your Lordships are in sympathy with the idea of giving protection of this character. With regard to the particular proposal, all I can say is that it has been carefully considered and that it is put in a limited form. If it cannot be accepted, at any rate I hope that it, may be the basis of a proposal which the Government can accept.

Amendment moved— Insert the following new clause: .—(1) Where by reason of National service in connection with the present hostilities a patentee has been wholly or partially prevented from dealing with or developing his invention during performance of such National service, he may apply to the comptroller in the prescribed manner for an extension of the term of his patent. (2) The application shall be made as soon as may be after the termination of such service. (3) The comptroller shall advertise the application in the prescribed manner and within such time as may be prescribed any person interested may give notice of opposition at the Patent Office and the comptroller shall if required hear the opponent and the patentee. (4) If the comptroller be satisfied that there has been no undue delay in making the application and that the circumstances warrant an extension of the term of the patent, he may make an order extending the term, and such order may be made subject to such terms as the comptroller may see fit. (5) The extension of the term of the patent shall be such as in the opinion of the comptroller having regard to all the circumstances, compensates the patentee, but shall in no case exceed the period during which the patentee was, while performing National service, prevented from dealing with or developing his invention. (6) An application may be made in respect of a patent which has already expired, but in such event the comptroller shall consider the interests of persons who may have availed themselves of the subject matter of the patent after the same had expired and any order made by the comptroller may be subject to provisions protecting such persons. (7) An extension of the term of a patent under this Act shall be without effect on any proceedings under section eighteen of the Patents and Designs Act, 1907, save that the date of the expiration of the extended patent shall be the date from which the limiting period for presenting any petition under that section, shall be reckoned. (8) Any decision of the comptroller under this section shall be subject to an appeal to the Court."—(Lord Parmoor.)

LORD EMMOTT

I should like cordially to support the proposed new clause, though I do not think that it goes as far as I should like to go in regard to this matter. I believe that it would leave a great many cases of hardship and unfairness still not dealt with; but, perhaps, of all cases that of the men who have been doing national service is the strongest.

VISCOUNT PEEL

The noble Lord who moved the Amendment has made a more carefully considered proposal than the other Amendment, because, as he said, this is more strictly limited. Before I deal with the general proposition I want to make a small criticism on the form, and to ask a question. I am not quite certain what the noble. Lord means by "national service." I do not know that it has a strict definition. Men, of course, have been called up and have gone to fight during the war. In those cases if patents have not been developed no doubt it would be due to national service, but does the noble Lord insist on the fact of the performance by the individual of this national service? I was thinking of a case where a patent was being worked or developed in a particular factory and the factory was seized by the Government in order to make munitions or something of that kind. In that case it would not appear necessary that the individual himself had performed, or had gone to perform, national service.

LORD PARMOOR

It would not cover that.

VISCOUNT PEEL

I understand the proposal is intended to be as limited as it appears to be on the face of it.

LORD PARMOOR

That is the intention, certainly. The words "national service" are put in with that object.

VISCOUNT PEEL

I am glad that the noble Lord has explained that. I think that both Lord Parmoor and Lord Emmott, in their speeches, have treated the subject as if the Government had made no provision in the Bill for people who suffered in that way. That is very far from being the case. There are objections, as everyone can see, against the general extension of patents for five years. As a matter of fact, the period during which patents are to be extended is two years.

LORD PARMOOR

That is all round.

VISCOUNT PEEL

Yes. I do not lay more stress upon it than this—that it is convenient for the future that the period of the patent should be extended by two years. I want to point out that these patents to which my noble friend is referring—not those which have expired, but those which are in existence—do get the benefit of the extra two years and, therefore, a considerable advantage.

But they get far more than that, because, if your Lordships will look at Clause 7, you will see that there is to be added as an amendment to Section 18 of the principal Act, which relates to the extension of the period of patents, the words in subsection (2)— At the end of subsection (4) of the same section there shall be inserted the words including in particular any loss or damage which may have been occasioned by the patentee, as such, by reason of hostilities between His Majesty and any foreign state, except in cases where the patentee is the subject of any such foreign state.' It is the fact that these words are general. They apply to future wars, but they apply just as much to the late war. Therefore, not only do these gentlemen who may have been injured get the extra two years for their patents, but also an opportunity, by ordinary application, of having their patents extended, if they can show that, they have suffered loss or damage in consequence of the hostilities. I submit that their case is pretty well provided for.

A different suggestion is made by my noble friend, who wants all these cases tried by the Comptroller. I believe they may involve some 60,000 or 70,000 patents. Here, of course, is a question of procedure. I understand that it would be quite impossible for the Comptroller and his staff to deal with these cases. They would be completely flooded under. Really it is an impracticable plan which is suggested by my noble friend. There is another criticism which might also be made. It is rather difficult to tell at present how much these patentees may have suffered, because, though it is quite true they may have suffered during the war, in the period after the war, when certain other things were required, they might get very great advantages. Therefore, you might have to set an advantage on the one side against a loss on the other.

Besides, under the proposal made by the Government, patentees no doubt will apply to the Court at different times, and it will be much more convenient if their applications are spread over a certain number of years than if you flood one individual, the Comptroller, with all these patents at one particular time. Moreover, the Court will be in a much better position to ascertain what damage they have really suffered, because, if they apply towards the end of the period when the patents expire (which is the usual practice under the 1907 Act) the Court will be able to take all the circumstances of the case into account, and to balance the damage they may have sustained during the war against the advantage they may have enjoyed after the war, and to come to a much more satisfactory and fair judgment.

I submit, therefore, that on the whole the Government plan is in many ways a better one than that suggested by my noble friend. In the second place, I think the plan of my noble friend is not practicable; and, thirdly, that taking the operation of the different clauses together, the patentees really will get substantially what my noble friend thinks they ought to get—their two years and, on their application at different times towards the end of the period when the patent expires, some further extension, when the Court is able to go into the whole question and see what damage they have sustained.

LORD PARMOOR

I think I ought to answer shortly one point made by the

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 8:

Right of Crown to use patented inventions.

8. At the end of section twenty-nine of the principal Act the following words shall be inserted:— And the terms of any agreement or licence concluded between the inventor or patentee and any person other than a Government Department, shall be inoperative so far as concerns the making use or exercise of the invention for the service of the Crown: Provided further, that where an invention which is the subject of any patent has, before the date of the patent, been duly recorded in a document by, or tried by on behalf of, any Government Department, such invention not having been communicated directly or indirectly by the applicant for the patent or the patentee, any Government Department, or such of their agents, contractors, or others, as may be authorised in writing by them, may make use and exercise the invention so recorded or tried, for the service of the Crown, free of any royalty or other payment to the patentee, notwithstanding the existence of the patent. If in the opinion of the Department the disclosure to the applicant or the patentee, as the case may be, of the document recording the invention, or the evidence of the trial thereof, if required, would be

noble Viscount. That is the practical one. I have made enquiries and I do not think that the difficulty would arise in the form he suggests, particularly having regard to the assistance which the Comptroller has. Subject to that, I hope the House will accept the new clause.

On Question, whether the proposed new clause shall stand part of the Bill?—

Their Lordships divided: Contents, 12; Not-Contents, 33.

CONTENTS.
Grey, E.	Erskine, L.	Rotherham, L.
Brodrick, L. (V. Midleton.)	Glenconner, L.	Strachie, L.
Clifford of Chudleigh, L.	Moulton, L.	Sydenham, L.
Emmott, L. [Teller.]	Parmoor, L. [Teller.]	Willoughby de Broke, L.
NOT-CONTENTS.
Birkenhead, L.(L. Chancellor.)	Peel, V.	Lee of Fareham, L.
		Loch, L.
Dufferin and Ava, M.	Annesley, L. (V. Valentia.)	Muir Mackenzie, L.
	Avebury, L.	Ranksborough, L.
Bradford, E.	Balfour, L.	Rathereedan, L.
Lytton, E.	Charnwood, L.	Ritchie of Dundee, L.
Onslow, E.	Clwyd, L.	Sinha, L.
Strafford, E.	Cochrane of Cults, L.	Somerleyton, L. [Teller.]
	Colebrooke, L.	Stanmore, L. [Teller.]
Sandhurst, V. (L. Chamberlain.)	Elgin, L. (E. Elgin and Kincardine.)	Stuart of Wortley, L.
Churchill, V.		Sumner, L.
Hutchinson, V. (E. Donoughmore.)	Faringdon, L.	Wavertree, L.
	Killanin, L.	Wigan, L. (E. Crawford.)

detrimental to the public interest, it may be made confidentially to counsel on behalf of the applicant or patentee, or to any independent expert mutually agreed upon. In case of any dispute as to the existence or scope of any record as aforesaid, or as to the use of an invention, or the terms of its use, the matter shall be referred to a judge of the High Court for decision, who shall have power to refer the whole matter or any question or issue of fact arising thereon to be tried before a special or official referee or an arbitrator upon such terms as he may direct.

The right to use an invention for the services of the Crown under the provisions of this section shall include, and shall be deemed always to have included, the power to sell any articles made in pursuance of such right which are no longer required for the services of the Crown."

THE LORD CHANCELLOR moved to leave out e 8, and to insert the following new clause— 8. For section 29 of the principal Act the following section shall be substituted:— 29.—(1) A patent shall have to all intents the like effect as against His Majesty the King as it has against a subject: Provided that any Government department may, by themselves or by such of their agents, contractors, or others as may be authorised in writing by them at any time after the application make, use or exercise the invention for the services of the Crown on such terms as may, either before or after the use thereof, be agreed on, with the approval of the Treasury, between the department and the patentee, or, in default of agreement, as may be settled in the matter hereinafter provided. And the terms of any agreement or licence concluded between the inventor or patentee and any person other than a Government department, shall be inoperative so far as concerns the making, use or exercise of the invention for the service of the Crown: Provided further, that where an invention which is the subject of any patent has, before the date of the patent, been duly recorded in a document by, or tried by or on behalf of any Government department, such invention not having been communicated directly or indirectly by the applicant for the patent or the patentee, any Government department, or such of their agents, contractors, or others, as may be authorised in writing by them, may make, use and exercise the invention so recorded or tried, for the service of the Crown, free of any royalty or other payment to the patentee notwithstanding the existence of the patent if in the opinion of the department the disclosure to the applicant or the patentee, as the case may be, of the document recording the invention, or the evidence of the trial thereof, if required, would be detrimental to the public interest, it may be made confidentially to counsel on behalf of the applicant or patentee, or to any independent expert mutually agreed upon. (2) In case of any dispute as to the making, use or exercise of an invention under this section, or the terms therefor, or as to the existence or scope of any record or trial as aforesaid, the matter shall be referred to the court for decision, who shall have power to refer the whole matter or any question or issue of fact arising thereon to be tried before a special or official referee or an arbitrator upon such terms as it may direct. (3) The right to use an invention for the services of the Crown under the provisions of this section shall include, and shall be deemed always to have included, the power to sell any articles made in pursuance of such right which are no longer required for the services of the Crown.

The noble and learned Lord said: The Amendments made to Section 29 of the principal Act by Clause 8 of this Bill, and those contained in the Schedule, have become somewhat involved. It is difficult for the legal mind even to pursue them. I have given some attention to this matter since attempting to correlate the old and the new legislation, and propose by this Amendment to consolidate all the Amendments proposed in the present Bill by repealing Section 29 of the principal Act and re-enacting it in the amended form. The clause on the Paper contains slight modifications of the proposals already contained in the Bill. A subsequent Amendment to Clause 22 is proposed to postpone the operation of the tribunal to decide cases of dispute until such time as the Royal Commission at present sitting to consider awards to inventors has finished its task.

Amendment moved— Page 12, line 23, leave out Clause 8, and insert the said new clause.—(The Lord Chancellor.)

LORD MOULTON

By the desire of the authorities of the Patent Office I bring forward an Amendment to the Amendment. It is to add to subsection (2) of the proposed new Clause 8 these words: "The Court Referee or Arbitrator, as the case may be, may, with the consent of the parties, take into consideration the validity of the patent for the purpose only of the reference and for the determination of the issues between the applicant and such Government Department."

This refers to a practical difficulty. The Government cannot try an action as to validity and it will not allow this procedure to come into operation on Patent the validity of which has not been declared. The great Dobell case was an action brougt against a person of the name of William Anderson, who was really a high official in the Government service, and was a case to establish the validity of the patent before there was any question of remuneration for using the invention. They want to get rid of that. At the same time they do not want the arbitrator, the referee, or the court, in such a proceeding to make a decision which would be binding as a legal decision on all courts and all parties, and, therefore, on the one hand they say that if the parties wish it the tribunal must take into consideration the validity but their doing so is only for the purpose of determining the issues raised therein, and it shall have no effect other than with regard to this. It is a most reasonable proposal and will greatly add to the usefulness of the clause.

Amendment moved to the proposed new clause— At end of subsection (2), insert: ("The Court Referee or Arbitrator, as the case may be, may, with the consent of the parties, take into consideration the validity of the patent for the purpose only of the reference and for the determination of the issues between the applicant and such Government Department").—(Lord Moulton.)

THE LORD CHANCELLOR

The vigilance of the noble and learned Lord has detected an omitted case in the clause as drafted by me, and I shall be glad to accept his Amendment.

On Question, Amendment to the Amendment agreed to.

New clause, as amended, agreed to.

Clause 9:

Power of court to grant relief in respect of particular claims.

9. After section thirty-two of the principal Act the following section shall be inserted:— 32A. If the court in any action for infringement of a patent finds that any one or more of the claims in the specification, in respect of which infringement is alleged, are valid, it shall, subject to its discretion as to costs and to such terms as to amendments as it may deem desirable, grant relief in respect of any of such claims which are infringed without regard to the invalidity of any other claim in the specification. In exercising such discretion, the court may take into consideration the conduct of the parties in inserting such invalid claims in the specification or permitting them to remain there.

LORD MOULTON

The Amendment w hick I propose to this Clause is simply for the purpose of preventing an ambiguity in the Act as it will be when it is incorporated with the Act of 1907. In the Act of 1907 it is said that if there is any Amendment the Court can only grant damages prior to the Amendment in case it gives a particular certificate, one part of the certificate being that the clauses which have been struck out have liven framed with reasonable skill and knowledge. If the present Bill were passed in die form in which it now stands it would be difficult for a Court to be sure whether that certificate had still to be granted, or whether the words that it may grant relief in respect of any of the claims which are infringed, and which are found valid, are independent of giving such certificate. In my opinon, it was intended that this clause should give power, quite independently of the clauses in the earlier Act, to deal with the valid claims in the patent before it and to give damages with regard to them, subject to the discretion as to costs and various I other things. Therefore I advise the House to consent to the insertion of the words, "Notwithstanding anything to the contrary appearing in Section 23 of this Act," because they will remove the ambiguity.

Amendment moved— Page 12, line 26, at begining insert ("Notwithstanding anything to the contrary appearing in Section 23 of this Act").—(Lord Moulton.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

My next Amendment is merely drafting.

Amendment moved— Page 12, line 29, after ("costs") insert ("and as to the date from which damages shall be reckoned").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 9, as amended, agreed to.

Clause 10 agreed to.

Clause 11:

Chemical products and substances intended for food or medicine.

11.—(1) After section thirty-eight of the principal Act, the following section shall be inserted:— 38A.—(1) In the, case of inventions relating to substances prepared or produced by chemical processes or intended for food or medicine, the specification shall not include claims for the substance itself, except when prepared or produced by the special methods or processes of manufacture described and claimed or by their obvious chemical equivalents: Provided that in an action for infringement of a patent where the invention relates to the production of a new substance, any substance of the same chemical composition and constitution shall in the absence of proof to the contrary be deemed to have been produced by the patented process. (2) In the case of any patent, for an invention intended for or capable of being used for the preparation or production of food or medicine, the comptroller shall, unless he sees good reason to the contrary, grant to any person applying for the same, a licence limited to the use of the invention for the purposes of the preparation or production of food or medicine but not otherwise; and in settling the terms of such licence and fixing the amount of royalty or other consideration payable, the comptroller shall have regard to the desirability of making the food or medicine available to the public at the lowest possible price. Any decision of the comptroller under this subsection shall be subject to appeal to the court. (2) This section shall apply only to patents applied for after the passing of this Act.

LORD MOULTON

I think there will be no objection on the part of the Government to the Amendment which I wish to propose. It adds to subsection 2 of Clause 11, which provides that "the Comptroller shall have regard to the desirability of making the food or medicine available to the public at the lowest possible price" the words "consistent with giving to the inventor due reward for the research leading up to the invention." I think your Lordships will feel that that is only fair and equitable.

Amendment moved— Page 13, line 24, at end, insert ("consistent with giving to the inventor due reward for the research leading up to the invention"—(Lord Moulton.)

On Question, Amendment agreed to.

Clause 11, as amended, agreed to.

Clause 12 agreed to.

Clause 13:

Amendment of s. 41 (2) of principal Act as to anticipation,

13.—(1) At the end of subsection (2) of section forty-one of the principal Act, the following proviso shall be added:— Provided that the protection afforded by this subsection shall not extend to a patentee who has commercially worked his invention in the United Kingdom for more than six months prior to such publication as aforesaid. (2) This section shall not apply in the case of patents granted before the passing of this Act.

LORD MOULTON

Clause 13 has, I think, been drafted in forgetfulness of a point in the settled law with regard to patents, which is this, that any commercial user before the application for the patent invalidates the claim to a patent. The clause as it at present stands refers to a protection which by the Act is given to a person against an unintentional disclosure, but it says that the protection afforded "shall not extend to a patentee who has commercially worked his invention in the United Kingdom for more than six months prior to such publication as aforesaid." As a matter of fact, the law has always looked very sternly upon commercial user before taking out the patent. I therefore suggest that the clause should stand like this: "who has commercially worked his invention in the United Kingdom, otherwise than for the purpose of reasonable trial prior to the application for the patent." I have consulted the Solicitor-General, and he thinks that that is the proper form, and I can assure your Lordships that that will give protection against a very serious risk '"that patentees are running. Many of their inventions can only be tried on the scale which is necessary to give them an effective trial if they are to be commercially used. I will give an instance. There was the case of a rotary printing press for the rapid delivery of newspapers. A certain person invented a process. It was very skilful and he sold the machine, but he sold it on terms of trial. It was not known whether it would succeed, so there was a trial, and that trial according to English law being for the purpose of perfecting the invention would not have invalidated the patent. Unfortunately he tried it on the issue of au evening paper, and that issue was sold, and because it was sold it was held that his patent was invalid, although it was absolutely necessary he should make a trial on that scale before he could tell whether his invention was a true invention. Therefore if we adopt the words which I have suggested I think it would be a very great improvement.

Amendment moved— Page 14, line 12, after ("United Kingdom ") leave out the words to the end of the subsection and insert ("oth rwise than for the purpose of reasonable trial prior to the application for the patent.")—Lord Moulton.)

On Question, Amendment agreed to.

Clause 13, as amended, agreed to.

Clause 14 agreed to.

Clause 15:

Registration of designs to bind the Crown.

15. After section fifty-eight of the principal Act the following section shall be inserted:— 58A. The registration of a design shall have to all intents the like effect as against His Majesty the King as it has against a subject: Provided that the provisions of section twenty-nine of this Act shall be read as though they applied to registered designs.

THE LORD CHANCELLOR

I have a drafting Amendment in the proviso to Clause 15.

Amendment moved— Page 15, line 10, leave out ("be read as though they applied") and insert ("apply to registered designs as though those provisions were herein re-enacted and in terms made applicable").(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 15, as amended, agreed to.

Clause 16:

Registration of assignments, etc.

16. At the end of section seventy-one of the principal Act, which relates to the entry of assignments and transmissions in registers, the following subsection shall be inserted:— (4) Except in applications made under section seventy-two of this Act, an assignment, transmission or mortgage of, or any other instrument affecting the title to, a patent or the copyright in a registered design, or any interest therein, or a licence to use a patent or registered design, shall not be admitted in evidence in any court unless it has been entered on the register of patents or the register of designs as the case may be.

THE LORD CHANCELLOR moved, at the end of the clause, to insert "or unless the Court otherwise directs." The noble and learned Lord said: This Amendment is proposed to meet an objection which has been raised that an instrument affecting title to a patent might sometimes be required to be produced in Court in matters entirely unconnected with the patent. Therefore it is proposed to give the Court discretion in the matter.

Amendment moved— Page 15, line 20, at end insert ("or unless the court otherwise directs").—(The Lord Chancellor.)

On Question, Amendment agreed to.

On Question, That Clause 16, an amended, stand part

LORD MOULTON

I am going to propose the omission of this clause, not from any hostility to the aim of the clause, which is a very worthy one—namely, to get the register complete at as early a date as possible—but for the purpose of bringing forward on Report a clause which will evade the legal difficulties that I foresee, and which will carry out the object of the Government. Therefore I move that this clause be omitted from the Bill for the purpose of a clause effecting the object being brought up on Report.

Amendment moved— Leave out Clause 16.—(Lord Moulton.)

THE LORD CHANCELLOR

I assent, to that.

On Question, Amendment agreed to.

Clause 17 agreed to.

Clause 18:

Registration, of patent agents.

18. For section eighty-four of the principal Act, which relates to the registration of patent agents, the following section shall be substituted:— 84.—(1) No person shall practise, describe, or hold himself out, or permit himself to be described or held out, as a patent agent, unless—

1. (a) in the case of an individual, he is registered as a patent agent in the register of patent agents;
2. (b) in the case of a firm, every partner of the firm is so registered;
3. (c) in the case of a company which commenced to carry on business after the seventeenth day of November nineteen hundred and seventeen, every director and the manager (if any) of the company is so registered;
662
4. (d) in the case of a company which commenced to carry on business as a patent agent before that date, if a manager or a director of the company is so registered:

Provided that in the last-mentioned case the name of such manager or managing director shall be mentioned as being a registered patent agent in all professional advertisements, circulars or letters in which the name of the company appears.

LORD EMMOTT moved, in subsection (1) (b), after the first "firm," to insert "other than a firm of solicitors." The noble Lord said: I will explain this Amendment in very few words. There are some solicitors who are members of the Chartered Institute of Patent Agents who believe that this clause as drawn will deprive them any longer from being called patent agents. Paragraph (a) as it stands would certainly not deprive them, but would include them. Paragraph (b), however, says—"in the case of a firm, every partner of the firm is so registered." Some of these gentlemen are members of firms of solicitors, and are the only ones who are chartered patent agents. They think that words should be put in to make it quite clear that they shall not be prevented from calling themselves patent agents. The words that I suggest, "other than a firm of solicitors" would, I think, do that, and I wove them. I suppose that it would equally serve the purpose if it read—"in the case of a firm of patent agents." At any rate that is the point, and I am sure the Government do not wish to deprive these people of their right to be called chartered patent agents, and it should be made quite clear.

Amendment moved— Page 15, line 34, after the first ("firm") insert, ("other than a firm of solicitors").—(Lord Emmott.)

VISCOUNT PEEL

I am not quite sure what my noble friend wants. Firms cannot call themselves patent agents unless in the case of the firm every partner is registered as a patent agent. Surely he does not want firms whose partners are not patent agents, or all of whom are not patent agents to be registered as patent agents. Surely nay noble friend does not want to give a special privilege to firms of solicitors that is not possessed by other people. If one member of a firm is a patent agent he can call himself a patent agent. He is not prevented by this from doing so, but why a firm of solicitors should be allowed to call themselves patent agents if only one member of the firm is a patent agent and registered as such I do not know.

LORD EMMOTT

That is not what I am asking for. These people fear—I cannot say whether rightly or not, because it is a matter of legal construction—that they will be unable, if this Bill is passed, any longer to call themselves patent agents. They are individual members of a firm of solicitors, being the only ones who are at present patent agents. The point is whether they can still continue to call themselves so. I suggest that if my words are not right, these words might be adopted —"in the case of a firm of patent agents." That would make it clear.

VISCOUNT PEEL

It is clear that any firm cannot call themselves patent agents unless every partner of the firm is so registered, although the individual member of the firm can call himself a patent agent if he is so registered, but the firm cannot call themselves patent agents unless every partner of the firm is so registered.

LORD PARMOOR

I think that what the noble Viscount says must be true, but it does not prevent a member of a firm of solicitors from being a patent agent. The firm, however, is not to be registered as such if it is really a solicitor's firm.

LORD EMMOTT

As long as the position is right, I accept that.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in subsection (1) (c), after "business" to insert "as a patent agent." The noble and learned Lord said: Some question has been raised as to whether the clause as at present drafted is clear as to the business which a person could carry on in order to qualify for registration. The words proposed to be inserted will, I think, make that clear, and will carry out your Lordships' purpose.

Amendment moved— Page 15, line37, after ("business") insert ("as a patent agent").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved, at the end of subsection (1), to omit from the proviso the word "managing." The noble and learned Lord said: It was decided to delete this word in Committee in the other House, but by an oversight it was left in.

Amendment moved— Page 16, line 8, leave out ("managing").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 18, as amended, agreed to.

Clauses 19, 20, and 21 agreed to.

Clause 22:

Short title and commencement.

22.—(1) This Act may be cited as the Patents and Designs Act, 1919, and the principal Act and this Act may be cited together as the Patents and Designs Acts, 1907 and 1919.

(2) The provisions by sections one and two of this Act substituted for sections twenty-seven and twenty-four of the principal Act shall not come into operation until such time, not being later than one year after the passing of this Act, as may be fixed by order of the Board of Trade, except so far as the provisions so substituted for the said section twenty-four are by subsection (2) of section six of this Act applied to the patents therein mentioned; save as aforesaid this Act shall come into operation on the passing thereof.

THE LORD CHANCELLOR moved, in subsection (2), after "mentioned," to insert "and the provisions of this Act relating to the terms on which an invention or registered design can be made, used or exercised by or on behalf of a Government department shall not come into operation until such time as may be fixed by order of the Board of Trade" The noble and learned Lord said: This Amendment is necessary in order to defer the coming into operation of the Tribunal to decide cases of dispute under Section 29 of the Act until such time as the Royal Commission at present sitting to consider the awards to inventors has completed its work. If it were not inserted there would be a conflict of jurisdiction in this matter.

Amendment moved— Page 18, line 18, after ("mentioned") insert ("and the provisions of this Act relating to the terms on which an invention or registered design can be made, used or exercised by or on behalf of a Government department shall not come into operation until such time as may be fixed by order of the Board of Trade").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 22, as amended, agreed to.

Schedule:

MINOR AMENDMENTS OF PRINCIPAL, ACT.
Section Amended.	Nature of Amendment.
Section 5	In subsection (1) for the word "six" there shall be substituted the word "nine."
Section 6	In the proviso to subsection (3) for the words "treat the claim" there shall be substituted the words "allow an application"; and after the words "included in the complete specification "there shall be inserted the words" to be made and treated."
	In subsection (4) for the words "A refusal of the comptroller to accept a complete specification shall be subject to appeal "there shall be substituted the words, "An appeal shall he from the decision of the comptroller under this section."
	In subsection (5) for the word "twelve" there shall be substituted the word "fifteen."
Section 15	In subsection (2) for the words "on the ground of fraud" there shall be substituted the words "by the court on the ground that it has been obtained in fraud of the first and true inventor or where the grant has been refused by the comptroller under the provisions of paragraph (a) of subsection (1) of section eleven of this Act or revoked on the same ground under the provisions of section twenty-six of this Act."
	In the same subsection after the words "grant to him a patent" there shall be inserted the words "for the whole or any part of the invention,' and after the words "patent so revoked" there shall be inserted the words" or as would have been borne by the patent if the grant thereof had not been refused."
Section 29	For the words "by themselves, their agents, contractors, or others "there shall be substituted the words" by themselves or by such of their agents, contractors, or others as may be authorised in writing by them."
	For the word "use" there shall be substituted the words "make, use, or exercise." The following words, at the end of the section, viz., "or, in default of agreement, as may be settled by the Treasury after hearing all parties interested," shall be omitted.

LORD EMMOTT moved, in the last, paragraph of the Amendment in the Schedule to Section 6, to leave out "fifteen" and insert "eighteen." The noble Lord said: In the old days delay in the acceptance of a complete specification delayed the appearance of the illustrated abridgement of specification, but this is no longer the case; therefore there is no reason for the period being so short even as is suggested in this Bill, although I know the Bill gives some relaxation in the matter. At present it not infrequently happens that the examiners search for novelty designs for three or possibly four months, and if a complete specification is filed nine months after a provisional specification this leaves only two months in which the result of the search can be communicated to the applicant. If he resides abroad, or is absent from home, particularly if he is at a great distance, this is not sufficient. Many commercial people who have seen me in regard to this matter are strongly in favour of the fifteen being made into eighteen, and the eighteen into twenty-One.

Amendment moved— Page 19, line 15, leave out ("fifteen") and insert ("eighteen").—(Lord Emmott.)

THE LORD CHANCELLOR

This Amendment, and those standing in Lord Emmott's name to lines 41 and 42, would have the effect of prolonging the period of provisional protection and the sealing of the patent for six months beyond the present period. The Bill proposes to extend this period by three months, and the Government, after forming the best opinion that they can, are very unwilling to extend this period. It is very undesirable that the period of provisional protection should be unduly prolonged, since the public have no means whatever of ascertaining what inventions are the subject of protection until the complete specification is both accepted and published. It may easily happen that there are conflicting applications, and the public and inventors are entitled to know at the earliest possible moment what their position is. I am sure that Lord Emmott is well aware that under the Rules under the Act the extended period for which he asks may in any case be obtained on payment of certain prescribed fees. It would be very unfortunate in our judgment if this time were further extended. If a really grave individual case arises it can be met on the payment of additional fees, and the balance of public interest in my view is considerably against this proposal.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in the first paragraph of the Amendments in the Schedule to Section 15, to leave out "first and true" and insert "true and first." The noble and learned Lord said: This is drafting.

Amendment moved— Page 20, line 4, leave out ("first and true") and insert ("true and first").—(The Lord Chancellor.)

On Question; Amendment agreed to.

THE LORD CHANCELLOR moved to delete from the Schedule the Amendments to Section 29. The noble and learned Lord said: This is drafting.

Amendment moved— Page 20 leave out lines 45 to 53 inclusive.—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next two Amendments are purely drafting.

Amendments moved—

Page 21, after line 1, insert:

Section 34

For the words "inspection or account" there shall be substituted the words "or inspection."

Page 21, after line 18, leave out ("insert") and insert ("there shall be inserted the following paragraph").—(The Lord Chancellor.)

On Question, Amendments agreed to.

THE LORD CHANCELLOR moved to insert—

Section 45(1)	After the word "inventor" where it first occurs, there shall be inserted the words "or the reading of a paper by an inventor before a learned society or the publication of the paper in the society's transactions."
	In proviso (a) after the word "invention" there shall be inserted the words "or the persons reading such paper or permitting such publication."
	At the end of proviso (b) there shall be inserted the words "or the reading or publication of such paper."

The noble and learned Lord said: These Amendments are proposed to meet a point raised in Lord Queenborough's Amendment, which is down on the Paper to Section 45. Lord Queenborough was not here to move it, but in point of fact the form suggested in his Amendment, was objectionable but, there was some substance in his proposal. The object of the Amendments is to protect inventions disclosed by a person reading a paper before a society prior to application for the grant of a patent. A similar protection is at present accorded to a person exhibiting an invention at an exhibition prior to filing an application for a patent, and it seems a reasonable extension of that principle.

Amendment moved— Page 21, after line 23, insert the said words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

LORD CLIFFORD OF CHUDLEIGH had on the Paper an Amendment to insert—

Section 68	For section sixty-eight of the Principal Act, the following sections shall be substituted:—
	"(1) A file shall be kept at the Patent Office in respect of every applicant for a patent, and there shall be inscribed therein a copy of every application, specification and drawing submitted to the Patent Office in reference to such application together with the copies of any declaration or correspondence in connection therewith and of every other material document or the result of any proceedings relating thereto.
	"(2) The file shall also contain the reports of examiners made under this Act, and the results of searches made under section seven and section eight hereof.
	"(3) The file shall at all convenient times be open to the inspection of the public on payment of the prescribed fee.

The noble Lord said: I was requested to move this Amendment, and was told that there was no great objection to it, but after mature reflection I think that perhaps it is best to leave well alone, and therefore I do not move.

THE LORD CHANCELLOR

The next is a drafting Amendment.

Amendment moved—

Page 22, after line 1, insert:

Section 91

In subsection (5) for the word "and" there shall be substituted the word "or."—[The Lord Chancellor.)

On Question, Amendment agreed to.

LORD CLIFFORD OF CHUDLEIGH moved to insert

Section 92

For subsection (2) the following subsection shall be substituted—

"(2) Subject to general rules and to order of transfer made under the authority of the Supreme Court of Judicature Act, 1873, and the Acts amending it, the jurisdiction of the Court under this Act shall, as the Lord Chancellor may from time to time by general order direct, be exercised by such judge as the Lord Chancellor may assign to exercise that jurisdiction and an appeal shall not lie from any decision of such judge except in the case of an order revoking or confirming the revocation of a patent."

The noble Lord said: I understand that a Judge could be appointed to decide the matter. I would like to move the Amendment and leave it to the Lord Chancellor's discretion to bring it into the Bill if the Government see fit.

Amendment moved— Page 22, leave out lines 2 to 9, and insert the said words.—(Lord Clifford of Chudleigh.)

THE LORD CHANCELLOR

It is very easy to make an error on these points, but the noble Lord is not quite right in saying that at the present time an application has to be made to the Courts. Under Section 92 (2) of the Patents and Designs Act, 1907, where the decision of the Comptroller is subject to appeal or a petition may be referred or presented to the Court the appeal has to be made or the petition referred or presented to such Judge of the High Court as the Lord Chancellor may select for the purpose, so that under the existing law I have the power to select a Judge from the High Court to deal with these matters. A great deal of support has, from time to time, been given to the alternative proposal that one Judge shall be assigned to deal with these matters permanently. That proposal on reflection has not commended itself to any of my predecessors, and I confess I entertain a great deal of doubt about it myself.

It must be remembered that if a special Judge is selected to try all these matters and is kept in one Court several consequences follow, or may follow. In the first place, if you take a Chancery Judge under the linked system, which all Chancery Judges believe to be indispensable, you must have two Judges. In the second place, there is very good reason for doubting whether there would be enough work for one Judge to be kept constantly employed; and, in the third place, great practical inconveniences may arise. Supposing, for instance—and this has happened not infrequently—that a Judge is assigned for this special work, and after he has tried it for eighteen months it is discovered that his anticipated proficiency in such matters, or his acceptableness to the legal profession as a whole has not matured, it would be very difficult indeed to depose him in favour of another Judge. I myself am strongly of opinion that the present system is, on the whole, preferable and that the tradition of the English Bench is adhered to advantageously that there shall be versatility and elasticity on the Bench and, as at present advised, I confess I am opposed to this proposal.

LORD CLIFFORD OF CHUDLEIGH

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD CLIFFORD OF CHUDLEIGH moved to insert:

First Schedule

In paragraph (b) substitute £25 for duly £50; in paragraph (c) substitute £50 for £100; in the table of annual fees substitute £5 for £10, £7 10s. for £15, and £10 for £20.

The noble Lord said: I think this refers to the schedule of fees in the 1907 Act.

Amendment moved— Page 22, after line 17, insert the said words.— (Lord Clifford of Chudleigh.)

THE LORD CHANCELLOR

I think the noble Lord will perceive that this is not a matter which could possibly be dealt with in this House, and certainly not at this stage, but I will see that the views which he holds upon this point shall be considered by the appropriate branch of the Department.

LORD CLIFFORD OF CHUDLEIGH

I simply want to point out that, as compared with other countries, these fees are exceptionally high, and in some instances they may be very burdensome on the patentee.

VISCOUNT PEEL

I do not want to interrupt the noble Lord, but I think he knows that this House cannot originate any financial changes.

LORD CLIFFORD OF CHUDLEIGH

thought I could express the reasons for and against.

VISCOUNT PEEL

I was only pointing out that the Amendment cannot be dealt with by this House.

LORD CLIFFORD OF CHUDLEIGH

There is no objection to my expressing the reasons for or against?

THE LORD CHANCELLOR

On a point of order—and I give my opinion as an individual Peer—I do not think that, interesting as that expression would be, the noble Lord can, so to speak, hang up in the air, with no contact with any subject, observations on any matter, however valuable. I personally regret it very much.

LORD CLIFFORD OF CHUDLEIGH

Then I ask leave to withdraw.

Amendment, by leave, withdrawn.

Schedule, as amended, agreed to.