PATENTS RULES. (Hansard, 23 March 1933)

§ LORD ASKWITH

had the following notice on the Paper.—To ask His Majesty's Government—(a) by what authority the Board of Trade have made Rules prescribing fees for the 15th and 16th years of the life of a patent having regard to Section 65 of the Patents and Designs Act, 1907, and the First Schedule 84 to that Act; (b) whether the Patents Rules, 1932, dated 25th October, 1932, and purporting to be made under the Patents and Designs Acts, 1907 to 1932, have been laid before both Houses of Parliament during the present Session, and if not, whether they have any force or validity having regard to the provisions of Section 86 of the Patents and Designs Act, 1907.

The noble Lord said: My Lords, perhaps I may be allowed to give a short explanation of this question which appears to be rather of a technical character, but which I do not think really is so. It raises a matter of such importance to patentees that some of them have been seriously disturbed during the last few months. Obviously, patents should be upon a very secure basis in this country in order that patentees may know whether they can have royalties or charge for royalties, whether they can allow their patents to be hired, whether they can sell them and give a good title in the event of sale, or anything else. That is obvious. The question I ask particularly affects those patents which are in their fifteenth and sixteenth year. The increase of patents in this country has been quite remarkable. In 1916, with which some of these fifteenth and sixteenth-year patents would be concerned, there were taken out as completed specifications 9,513, but in 1930 these had risen to 24,993 and in 1931 to 22,848. It is therefore evident that inventors in this country are exercising their brains on an increasing number of inventions. Of those now in the fifteenth year 8.1 have survived and of those in the sixteenth year 5.5. Those figures indicate that the question affects a good many people.

According to the Act of 1907, the basic Act passed when Mr. Lloyd George was President of the Board of Trade—and a very fine piece of spade work it was—the term of a patent at present is for sixteen years. In 1919 those patents that were then reaching the end of the fourteenth year had their period extended for another two years, making it up to sixteen. With regard to patents such fees had to be paid as may be, with the sanction of the Treasury, prescribed by the Board of Trade, so however that the fees prescribed in respect of the instruments and matters men- 85 tioned in the First Schedule to this Act shall not exceed those specified in that Schedule. In that Schedule the fees are laid, down without anything being said about the fifteenth and sixteenth years, but giving fees up to the thirteenth and fourteenth years, amounting for the higher fees to £20 a year. Rules could be made by the Board of Trade and those Rules had to be laid before both Houses of Parliament as soon as practicable after they were made. If either House of -Parliament objected within the next forty days they could be annulled. In the Rules there were two systems of payment. One was by paying lump sums which extended over the fifteenth and sixteenth years; the other was to snake annual payments in which there were inserted certain fees for the fifteenth and sixteenth years of £14 and £15, those being inserted without anything in the Act of Parliament laying down the amount.

In 1932 it became necessary to amend this Act. The fees of the lower grades were increased. Another set of Rules was again got ready and in this new set of Rules the fees for the fifteenth and sixteenth years are put down, again without any sanction that I can see in the Act of Parliament. These Rules were laid before Parliament, having been produced upon October 25, on November 1, as soon as practicable after they had been issued. Parliament was then prorogued. It opened again on November 22, but the Rules were not laid again upon the Table of either House of Parliament. On March 9 I put down this Question. On March 16, four months after they could have been laid, they were laid on the Table, and now, a week afterwards, the Question having been deferred, I am asking this Question and shall be glad to hear what my noble friend says.

There still remains the question of the authority under which these fees for the fifteenth and sixteenth years are charged. When the 1907 Act was passed there was a good deal of talk of no fees being charged for the fifteenth and sixteenth years. They crept in somehow, and now they are put forward as being fees that are legal and which have authority. As I said at the beginning of my remarks, it is of the utmost importance that that authority should be clear, in view of the value of the progress in invention which 86 is continually going on. I may say too that it is perfectly clear, according to what is contained in Erskine May'sParliamentary Practice, that after Prorogation such rules as these fall to the ground, and have to be reintroduced into Parliament when Parliament reassembles. That was not done, and three to four months elapsed before it was done, and it is only upon a question that they are put down. Therefore to that extent I am glad that they have now been laid, and there is opportunity of proceeding to consider whether they are legal or not, which may avoid a continuance of the considerable disturbance and uncertainty which have already begun to exist among inventors.

§ LORD TEMPLEMORE

My Lords, the noble Lord in his Question has raised two quite separate points, and the first of these involves the question as to what authority the Board of Trade have for prescribing, by the Patent Rules, fees for the fifteenth and sixteenth years of the life of a patent, having regard to the provisions under Section 65 of the Patents and Designs Act, 1907, and the first Schedule to that Act, and in order to deal with the point adequately, it is necessary for me to go in some detail into the statutory provisions referred to.

By Section 65 of the Patents and Designs Act, 1907, the Board of Trade is empowered to prescribe, with the sanction of the Treasury, fees in respect of the grant of a patent, provided that the fees prescribed in respect of certain matters do not exceed those specified in the first Schedule of the Act. In the case of renewal fees, the First Schedule to the Act lays down two alternative methods by which these fees may be charged with a maximum in each case of £150. The first alternative method is for payment in two lump sums, and the second for payment by annual fees throughout the life of the patent. The fees prescribed by the Board of Trade follow the second of these methods, that is to say, the system of annual fees. The first Schedule therefore in relation to the fees actually prescribed by the Board of Trade, and now in force, imposes two maxima: (a) a total of £150; and (b) that in any of the years specified in the Schedule, that is, the fourth to the thirteenth year of the life of the patent, the annual fee shall not exceed the sums 87 specified in the Schedule. It follows therefore that in their Rules, the Board of Trade must not prescribe renewal fees in excess of £150, and they must not prescribe fees to be payable in each of the years from the fourth to the thirteenth year of the life of the patent in excess of the figures specified.

The Board of Trade have in fact prescribed annual fees amounting in all to £126, which is well within the maximum of £150 imposed by the Statute, and they have also prescribed that this £126 shall be spread over the sixteen years which is the normal life of a patent, and in no case have they prescribed a fee for any of the years mentioned in the Schedule in excess of the annual limit imposed by that Schedule. It is true that the Schedule imposes limits only up to the fourteenth year of the patent, but clearly the limit imposed is not exceeded if the fees, instead of being spread over fourteen year are spread over sixteen years, which is the full life of a patent. My noble friend may ask why the Board of Trade have extended the period over which fees are to be paid. The fact is that up to the year 1919, the normal life of a patent was only fourteen years, but by the Patent and Designs Act, 1919, the term of a patent was extended from fourteen to sixteen years. The Schedule to the 1907 Act was based upon the term of fourteen years, which was the normal life of a patent under that Act. When therefore, in 1919, the life of a patent was extended for a further two years, the Board of Trade thought it right, in exercise of the general powers conferred on them by Section 65 of the Act, that the renewal fees should be spread over the sixteen years for which normally patents would exist under that Act.

I would submit, with all respect to my noble friend, that there is really no ground for the contention that there is no authority to charge any fees in respect of the fifteenth and sixteenth years of the life of a patent. The fees now in force do not exceed £150, and in none of the years up to the fourteenth year do the prescribed fees exceed the annual maximum fixed by the First Schedule to the Act. As a matter of fact, these same fees have been in force since the 1st April, 1920, and no question has been raised about them. Indeed, it is difficult to see how any 88 patentee could complain that instead of paying his renewal fees during the first fourteen years of the lire of the patent, he is now permitted to pay them over the longer period of sixteen years for which a patent now runs.

So much for the first point raised by the noble Lord The second point raises the question as to whether the Patent Rules, 1932, have been laid before both Houses of Parliament during the present Session, and if not, whether they have any force or validity, having regard to the provisions of. Section 86 of the Patents and Designs Act, 1907. I need not go into the section of that Act which prescribes that the Rules shall be so laid, because it has been described to your Lordships by my noble friend. The Patent Rules of 1932 were made on the 25th October, 1932, and were forthwith laid before both Houses of Parliament. The presentation is recorded in the House of Commons Votes and Proceedings on the 31st October, and in the House of Lords Minutes of the 1st November. The Rules lay accordingly for the remainder of that Parliamentary Session which came to an end on 17th November last when Parliament was prorogued. The Rules were not re-laid at the commencement of the present Session of Parliament, although the forty days mentioned in the section had not been completed in the last Session of Parliament.

It is agreed that the correct view to take of the section is that the Rules should have been re-laid at the commencement of the present Session of Parliament. His Majesty's Government regret that owing to inadvertence this was not done, and they are exceedingly grateful to the noble Lord for calling attention to the matter. Steps have accordingly been taken to relay the Rules, and the forty days during which, under the section, a Resolution may be moved in either House to annul them, is now running. I can, however, assure the noble Lord that the fact that the Rules were not re-laid, does not in any way affect their validity. The only result is that the Rules are still open to annulment in either House by the proper procedure. I think that there can be no doubt as to the correctness of this view, and indeed I am advised that there is judicial authority covering the point. I hope that what I have said answers satisfactorily 89 the questions put by the noble Lord. The fact that he has raised them shows that there may exit some doubt as to the true position and I am obliged to the noble Lord for giving me this opportunity of removing that doubt.