HL Deb 10 May 1932 vol 84 cc345-51

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

Moved, That the House do now resolve itself into Committee.—(Lord Temple-more.)

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF ONSLOW in the Chair.]

Clauses agreed to.


Minor Amendments of Principal Act.
Section Amended. Nature of Amendment.
First Schedule. For the figure "£3 0s. 0d." there shall be substituted the figure "£4 0s. 0d." and for the figure "£4 0s. 0d." in both places where that figure occurs there shall be substituted the figure "£5 0s. 0d."

Loan MARKS moved to omit the last paragraph of the Schedule. The noble Lord said: With this Bill, save for the last five lines, I am in complete agreement. I believe the last five lines have been inserted in the Bill as the result of a misunderstanding. Two Committees which sat prior to this Bill being drafted made certain recommendations the bulk of which have been embodied in the clauses which we have now passed. One Committee made a suggestion that it would be desirable that the well-known defects associated with the grant of British patents might be overcome by further search being undertaken by the British Patent Office. It was suggested that this further search would involve additional expenditure and because of this proposed additional work to be thrown upon the Patent Office officials it has been proposed that this additional charge of £1 upon every patent application should be enforced. This country, unfortunately, is the dearest country in the whole world for granting patents.

While it is the dearest country in the whole world for granting patents it is also a country which does not give the service in connection with the granting of patents that other countries do which charge much less for that which is done. For instance, the United States of America grant a patent which lasts for 17 years for a total fee of 50 dollars whereas our charges in this country amount to £131. It is not surprising that there should be many inventions that ought to be introduced into this country and adopted here that do not reach this country owing to the handicap that is associated with the grant of a patent. When every one is seeking to develop industry and to do all that is possible to encourage new ideas and improvements, when the Patent Office has a surplus amounting to £154,544, although it is not supposed to be a revenue-earning Department but a Department for the encouragement of industry, I would ask why, with that surplus of £154,544 in 1930, they should now be seeking to impose an additional charge of £28,000 on inventors. That is a proceeding which I cannot understand.

That which was suggested by the Committee was that there should be additional service granted in connection with the search and the clause in this Bill which is supposed to be the warrant for this increase of charge is Clause 2. That clause sets out that: If it is within the knowledge of the Comptroller that the invention has been made available and on so, he can do certain things. It does not say that it shall be brought to the knowledge of the Comptroller by a search. It says: "If it is within the knowledge of the Comptroller." That which was stated by the Committee was that there should be a search so that it should be officially brought to the knowledge of the Comptroller and not left to mere chance, and therefore the charge of £1 which is now proposed is presumably to cover this extra service which, in fact, is not to be rendered. It is rather singular that there should be one Department, the Treasury, imposing this £1 fee when the President of the Board of Trade publicly stated, at a gathering held recently, something which shows what should be the attitude of the Board of Trade. Speaking on February 24 at a gathering representing the cotton industry, the President of the Board of Trade said: The sooner we pray in and out of church for the breeding of more inventors the better it will be for industry as a whole. I have already said that one inventor is worth a score of good legislators. That is a statement made by the President of the Board of Trade at the very time when this Department is seeking to harass inventors and to hold back the development of industry.

I cannot imagine that this Bill with this provision at the end comes before your Lordships' House with the approval of the President of the Board of Trade, who suggested that we should pray in church and out of church for more inventors. I do not think that he would approve of imposing an extra fee of £1 upon them for that which they are doing. I would like to tell your Lordships what are the costs of obtaining patents here and in other countries. In this country, before a man can obtain his patent, he must pay official fees amounting to £5. Japan—I am taking a modern country—grants the same service for £4. Belgium grants the same service for 10s., Germany for £2 13s. 10d. and France for £2 18s. 1d. Those figures are based upon the present rate of exchange. Why we should, with all the nations in the world seeking to develop industry, in a new Bill introduced at a time when in London there will be gathered, from all over the world, experts associated with industry and patents to discuss what can be done to help the world's industry—why we should be giving this shocking example to those people assembling next week that we in- tend to harass industry, I do not understand. It is because I believe this is a Treasury clause and not a Board of Trade clause that I beg to move it be deleted.

Amendment moved— Schedule, page 26, leave out lines 10 to 14.—(Lord Marks.)


I am afraid that in spite of the eloquent appeal of my noble friend I must disappoint him and tell him that His Majesty's Government cannot accept the Amendment. The reason is that the Amendment, if accepted, would have the effect of curtailing very seriously and, in fact, almost to vanishing point the amount of extended search which the Patent Office would be able, under present conditions, to give under the provisions of Clause 2. It will be remembered that the Sargant Committee expressly made their recommendation in regard to an extended search subject to financial considerations, that is to say that the increased cost of the search—for example, additional staff—should be provided for. The Committee also pointed out that the direct and immediate advantage of the extended search would accrue to inventors and to those interested in patents, and it is only reasonable that the people who benefit from the increased services should pay for them, the whole object of the extended search being to give to the British patent a higher reputation and value.

The Committee's proposal to meet this expenditure was to add £1 to the fee paid on the application for a patent and if this proposal had been accepted the Patent Office revenue would have been increased by about £38,500 per annum. The Bill, however, does not go quite so far as this and limits the payment of the additional fee to the lodging of the complete specifications and this would reduce the extra charge to about £25,000 a year. The system by which fees for patents are charged is that small initial fees are payable on the application and other preliminary proceedings up to the grant, which cover the patent for the first four years of its life. After the expiration of that period the patentee may extend the life of the patent annually up to the full period of 16 years by the payment of increasing annual fees if he thinks that the patent is worth renewing.

The object of this system is to encourage inventors to apply for protection, by charging small fees which do not in fact cover the cost of the preliminary work done by the Patent Office, and upon payment of these small fees protection is given to the patentee for a period of four years. The patentee need not renew the patent after the expiration of that time if, in his view, it is not of sufficient value to justify the expenditure, but if he cares to do so, he can by paying annual fees increasing with each year of the life of the patent, extend that life up to sixteen years in all so long as he continues to pay these fees. The initial fees, which cover the grant of a patent for four years, do not by any means cover the cost of the services rendered by the Patent Office, but the renewal fees taken from successful patentees annually do, in fact, more than cover the whole cost of the Patent Office, leaving a substantial surplus for the Exchequer.

I know that the noble Lord, Lord Marks, in moving his Amendment, based part of his objection to the increase of £1 in the fees upon the fact that there is already a considerable annual surplus in the revenue of the Patent Office derived from the existing fees. This is perfectly true, but this point was fully considered by the Committee and is dealt with by them in paragraph 42 of their Report in the following terms: There was a general measure of agreement among the witnesses that the principal obstacle in the way of the proposed extension of the search was the question of cost; but it was urged that this difficulty could and should be overcome by utilising the annual surplus of the Patent Office budget, winch, it was suggested, was approximately equal to the estimated cost of a fairly extensive search among foreign patent specifications and other technical publications. This argument, however, involves a proposition which we are unable to accept, namely, that the working of the Patent Office should not produce any contribution towards meeting the general expenditure of the State, but that the whole of any realised or prospective surplus should be devoted to the improvement of the service of the Office. Under the Bill the total fees for the application, complete specification, investigation and scaling of a patent valid for four years would be increased from the present amount of £5, at which it has stood since 1905, to no more than £6.

This amount is, as has been explained, much below the actual cost to the Patent Office of the work connected with these operations and is much less than the corresponding fees payable in many other foreign countries. Further, the proposal in the Bill for an increase of £1 is a maximum amount and it does not follow that the whole of this amount would be exacted. The amount of the increased fee actually required would be related to the cost of the additional work involved. I cannot agree with the remarks at the end of the speech of the noble Lord that the Government in introducing this measure are doing something to harass industry. On the contrary, by simplifying the Patent Acts we hope to encourage and help industry and I trust that after my explanation the noble Lord will not press his Amendment.


My Lords, may I just ask one question of the noble Lord who has replied for the Government? Do I understand him to state that it is proposed that the contribution from the Patent Office shall in future be the same as in the past, but that the extra fee which this Schedule imposes shall go towards more search which will help the patentee? The Exchequer will not get any more, but the extra money taken from the patentees will go to help them in the shape of snore search.


That is so. My noble friend has asked me a question which I am glad to answer. The State will not get any more than in the past, but the balance will go to the upkeep and expenses of the Patent Office.


I am glad to congratulate my noble friend on his connection with a Department which has a surplus. I was not aware there was such a Department in existence.


I quite accept the explanation which has been given by the noble Lord but it does not remove the fact that there is no direction in the Bill for this extra search to be undertaken. If there had been a suggestion in the Bill that this search was, in fact, to be undertaken I could well understand why the additional fee should be charged. There is no such direction and no provision for this extra search, and yet there is an additional charge of £1 on our expenses which, as I have said, are higher than in any other country in the world for that which we do. I think it is unnecessary to add this £1, and the effect will be to keep back some of those who experience difficulty now in finding the £5 to obtain the patent. But I do not wish to delay the House longer. I agree with every other word in the Bill, and I welcome it: but I am quite sure this last provision is due to a misapprehension. I beg leave, however, to withdraw my Amendment.

Amendment, by leave, withdrawn.

Schedule agreed to.

Bill reported without amendment.