MERCHANDISE MARKS BILL. [H.L.] (Hansard, 3 May 1922)

THE UNDER-SECRETARY OF STATE FOR AIR (LORD GORELL)

My Lords, in asking your Lordships to give a Second Reading to this Bill, I am inviting your consideration of a measure which is designed to improve the existing law and to remedy difficulties which have become apparent since 1887, the date of the Act referred to in the Bill as the principal Act. It has become evident that there are a great many loopholes, which it is the purpose of this Bill to block. The Government have made a very serious attempt to frame a Bill which shall improve the existing legislation, so far as possible upon non-controversial lines, based upon the general principle that purchasers should be protected from being misled as to the origin of goods. At the same time, whilst the Bill is in the main non-controversial, 224 this is a subject which is by no means free from intricacy. The Government will welcome the scrutiny of noble and learned members of your Lordships' House, and will take into very serious consideration any criticism which they may have to make upon the clauses of this measure.

The Bill is divided into three main parts, the first of which deals with merchandise marks, the second with Government marks, and the third with the use of the Royal Arms and other devices. The first part is by far the largest portion of the Bill, and is much the most important. It is based upon the recommendations of the Board of Trade Committee which was appointed in October, 1919, and reported in June, 1920. It took evidence from a great number of witnesses coming from Government Departments, chambers of commerce, manufacturing associations, firms, and so on, and received suggestions from numerous trade associations. Its recommendations, which were unanimous, have received the general approval of the important body known as the Advisory Council to the Board of Trade. They have aroused considerable interest in commercial circles, and have, I believe, been generally viewed with favour. At any rate, a keen desire has been expressed for the passage of the Bill.

I ought to draw your Lordships' attention to two matters in respect of which the Bill differs from the recommendations of the Committee. The Committee recommended that local authorities should be given power to prosecute for offences under the Bill. That provision has not been inserted in the Bill, on the ground that it would throw an extra burden upon the rates which was felt to be undesirable at the present time. For the same reason, for the sake of economy, the recommendation of the Committee that the State should take action in foreign countries where false use has been made of British marks has not been inserted in the Bill, because it would cause expense which at the present time it is desired to avoid.

The main question which arises upon the Bill is whether all goods should be marked on importation, and there is also the subsidiary question whether they should be marked with a general or a specific indication of origin. The first point was very fully considered by the Committee, who came to the conclusion that conditions varied so much between one class of goods 225 and another, and between one trade and another, that they could not recommend a general provision that all imported goods should be marked. At the same time, they recognised that there was definite case for the special marking of certain imported goods, especially in cases where foreign goods were deliberately got up to imitate goods of British manufacture. They came to the conclusion that imitations of that character were very difficult to bring within the legal provisions which prohibit false marking, and that further legislation was required. Their recommendation was that, where it had been established after an official inquiry that it was in the public interest that the local origin of the goods should be indicated, the Board of Trade should have power to make an Order. That has been slightly modified in Clause 1 of the Bill, but the intention of the Committee has been carried out.

The wording of the clause is— Where the Board, after making such inquiries as they think necessary for the purpose of enabling them properly to exercise their powers under this section, are of opinion that a false impression as to the origin of any class or description of goods imported into the United Kingdom is likely to arise by reason of their form, style, or finish, or otherwise, the Board may, subject to the provisions of this section, make an order requiring an indication of origin to he given in the case of goods of that class or description made or produced outside the United Kingdom. On the general subject of compulsory marking of goods on importation there are two definite schools of thought. In general, it will suffice to say that, while the merchant does not want the origin to be marked on the goods, the manufacturer would like to have foreign goods definitely marked. The compromise which has been included in the Bill follows generally the intention of the Committee, and will, I hope, commend itself to your Lordships.

Clause 2 prohibits the misleading use of national descriptions where they have obviously been adopted in order to give the impression that the goods are British—the use, for example, of such words as "Britannia" or "Union Jack"—and also the misleading use of devices such as a maple leaf to imply that the goods are Canadian. The prohibition can be either absolute or qualified, and there is a saving clause for those who are using trade marks of that description at the present time.

Clause 3 enables those who feel themselves aggrieved to take action in the High Court. It is felt that the old legislation, which makes all offences against these Acts 226 of a criminal character, is not sufficiently broad to meet cases of great difficulty, and sometimes of international importance. At the present moment they have to be dealt with by the Police Court, and your Lordships will remember such cases as those involved in the use of the word "sardine." These cases are not only very important, commercially and internationally, but are of very great difficulty. It is felt that the High Court should be involved, and that they should in some cases be regarded as matters of commercial difficulty rather than as criminal matters.

I would refer your Lordships also to Clause 5 as an example of the loopholes that were left in the old Acts. The principal Act, under Section 18, dealt only with the importation of goods, and said nothing about their subsequent sale or any dealing in them, and it was quite possible for any one who had to have an indication of origin marked on importation to remove that indication immediately after the goods had been cleared from the Customs. Clause 6 adds to and extends the principal Act in certain directions with the same general object. For instance, there is no provision in the principal Act to cover a case where the words "Irish Linen" appear over the door of a shop which is not dealing by any means wholly in those goods. This would not be an offence either under Section 3 of the principal Act, which defines marks, or under Section 5, which defines the application of the marks. Clause 8 is the last clause of Part I with which I need trouble your Lordships. It is intended to make clear the meaning of Section 18 of the principal Act, and it is intended to protect the real generic description where the description has really lost its meaning as the description of origin—as, for example, Brussels carpet—with a proviso to deal with border line cases of great difficulty.

Passing to Part II, the need for greater protection of Government marks has made itself apparent for a considerable time. Even as long ago as 1907 cases of rifles were exported to Africa marked with the broad arrow, because the natives were accustomed to buy rifles so marked, and would buy no others. Under the Public Stores Act of 1875 the broad arrow is appropriated to Government property, but it is no offence to apply it to private property. It is only an offence to apply it improperly to stores which are under the care, superintendence, or control of Government Departments.

227 Clauses 9 and 10 are designed to remedy that obvious defect. Your Lordships will observe that in Clause 9, subsection (3), there is a limitation of the scope of the Bill, that "there shall be published in the Trade Marks Journal representations showing the exact form of each of the marks specified" in the Schedule. That is necessary because in many cases the Crown or Admiralty anchor is at present used a great deal, and it is desirable that there should be no doubt as to the marks which are put upon Government property. There is also a saving clause for those who are at present using marks in which the Crown is involved.

Part III has for its object the tightening up of existing legislation, in addition to the Trade Marks Act, 1905, and the Patent and Designs Act, 1907, with reference to the use of Royal Arms, devices and titles. The only other clause with which I need trouble your Lordships to-day is Clause 14, where the expression "indication of origin" receives a more extended definition. At present, it means a specific place, as for example "Made in Germany," and it has often been held, with what truth it is difficult to say, that this gives great advertisement to the country whose goods are marked so distinctly. In certain cases the importer would be able to mark his goods more generally; for example, "Made outside the British Empire," or "Made outside the United Kingdom," and the Board of Trade has power in certain cases to make a general direction. The subsequent subsections of that clause amplify the principal Act in the same general spirit that I have indicated. I think I have said enough to indicate the general provisions of the Bill and its objects. It is, I venture to submit, a Bill desired by the commercial classes of the country, and desirable in itself. The whole basis of the Bill is that purchasers should not be deceived by false impressions put upon the goods, in order to give the idea that the goods were made in this country when, in fact, they were made abroad. I beg to move.