PATENTS AND DESIGNS BILL [H.L.]

HL Deb 10 May 1949 vol 162 cc426-93

2.55 p.m.

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

Moved, That the House do now resolve itself into Committee.—(Lord Lucas of Chilworth.)

On Question, Motion agreed to.

House in. Committee accordingly:

[The EARL OF DROGHEDA in the Chair]

Clause 1 [Application for patent assignee]:

LORD LUCAS OF CHILWORTH

This is a purely drafting Amendment. I beg to move.

Amendment moved— Page 1, line 15, at end insert ("and may be made by that person either alone or jointly with any other person").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Clause 1, as amended, agreed to.

Clauses 2 and 3 agreed to.

Clause 4:

Priority date of claims of complete specification.

(2) Where the complete specification is filed in pursuance of a single application accompanied by a provisional specification or a specification which is treated by virtue of a direction under subsection (3) of section three of the principal Act as a provisional specification, and the whole of the subject matter of the claim was substantially described in that specification, the priority date of that claim shall be the date of filing of the application.

VISCOUNT SIMON moved, in subsection (2) to omit "the whole of the subject matter of the claim was substantially described" and to insert: the claim is fairly based on the matter disclosed. The noble and learned Viscount said: I beg to move the Amendment which stands in my name on the Marshalled List. It goes with two Amendments which follow and also, I think, with a further Amendment at page 3, line 31, which stands in my name. I am sorry that at the beginning of the Committee stage of this admittedly complicated and technical Bill we should be engaged in what is perhaps one of the roost complicated and technical parts of it, but if any of your Lordships feels discouraged, may I offer the assurance that it gets simpler later? No doubt, after we have had one or two explanations from the noble Lord, Lord Lucas, we shall all see the light much more clearly than I, at any rate, do at present.

The proposal in this Amendment, as those of your Lordships who have examined the Paper will have noticed, is to substitute the phrase "the claim is fairly based on the matter disclosed," for language which is now to be found in Clause 4 (2) on page 3 of the Bill. Clause 4 (2) as it now stands in the Bill provides this: Where the complete specification is filed in pursuance of a single application accompanied by a provisional specification or a specification which is treated by virtue of a direction under subsection (3) of section Three of the principal Act as a provisional specification. … Your Lordships will follow me so far, and it is at this point that it is proposed to put in the words set out in my Amendment so that the subsection will run on: and the claim is fairly based on the matter disclosed in that specification. … The phrase "the claim is fairly based on the matter disclosed" is used in the Bill as now printed and it is accepted by those who are expert in this matter—much more expert than I am. Your Lordships will find it, for example, in a clause which you have already adopted—Clause 2 (2).

The general object of the Amendment is to lay down a rather less strict limitation than would be implied if it were to be stipulated that "the whole of the subject matter of the claim was substantially described." It may well be that although in one sense there has not been actually a substantial description, none the less the claim is fairly based on what has been disclosed. Substantially, I should imagine, that is what we wish to ensure. I submit—and this is the opinion of much greater authorities than I am—that that is better achieved by this suggested alternative language. I am not sure, but I rather hope that this proposal is one which those responsible for the Bill may think it proper to accept. Therefore I will not say any more, but I invite the noble Lord opposite to tell us his view of the matter. If I have succeeded in putting on to paper phraseology which commends itself to the Board of Trade, I shall be greatly encouraged for the future. I beg to move.

Amendment moved— Page 3, line 13, leave out from ("and") to ("in") in line 14, and insert ("the claim is fairly based on the matter disclosed.")—(Viscount Simon.)

VISCOUNT MAUGHAM

May I say that in my opinion, for what it is worth, I think this Amendment is right and should be accepted? I would mention one thing which is rather curious and is known only to those intimately connected with inventions. There seems reason to think that it is something like a general rule in regard to many classes of inventions that they are in the air at the time when it becomes important, or when it is thought desirable, to obtain a patent. Often, after the patent is the subject of a specification in the claim, it turns out that three or four people had thought of exactly the same thing and are themselves seeking protection. All that is desired by the determination of the priority date—that is, the date from which the patent operates as between patentee and the other people who would like to have a patent—is that if the invention is fairly described and the matter disclosed, so that everybody knows the substance of it and so that the claim can be said to be fairly based, from that date no one shall be able to object on some technical ground to the date of the patent. On that ground I entirely support what has fallen from the noble and learned Viscount.

LORD LUCAS OF CHILWORTH

We are grateful for the clear explanation given by the noble and learned Viscount, Lord Simon, whose Amendment we have pleasure in accepting. We accept not only the one he has just moved, but the other three as well. The noble and learned Viscount will appreciate that we had these Amendments very late, and that they may involve consequential drafting Amendments later. We will look into these between now and the next stage of the Bill.

VISCOUNT SIMON

I am much obliged to the noble Lord.

On Question, Amendment agreed to.

VISCOUNT SIMON

I beg to move the next Amendment, which is consequential.

Amendment moved— Page 3, line 20, leave out from ("and") to ("in") in line 21 and insert ("the claim is fairly based on the matter disclosed").—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

This Amendment is also consequential. I beg to move.

Amendment moved— Page 3, line 25, leave out from ("and") to disclosed") in line 26 and insert ("the claim is fairly based on the matter").—(Viscount Simon.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This Amendment is consequential on the Amendment I propose to move after Clause 4 to meet the Amendment which the noble and learned Viscount, Lord Simon, has put down at page 4, line 3, and which we accept M principle. This Amendment clears the way for the other. I beg to move.

Amendment moved— Page 3, line 31, leave out ("the last foregoing subsection") and insert ("this Act and the principal Act").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

VISCOUNT SIMON

This Amendment is consequential on those previously accepted. I beg to move.

Amendment moved— Page 3, line 31, leave out from the third ("the") to ("shall") in line 32 and insert ("matter").—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON had given notice that he would move to add to the clause: ( ) Where a complete specification has been filed—

1. (a) in pursuance of one or more applications accompained by provisional specifications, or
2. (b) in pursuance of a convention application,

no claim therein shall be invalidated merely by the publication or use after the date of filing of any such provisional specification or of an application for protection in a foreign country upon which the convention application was based, as the case may be, of matter the whole of which was substantially described in such provisional specification or foreign application.

The noble and learned Viscount said: This is the Amendment to which my noble friend referred just now. It was put down because it was thought that this would be a useful provision to have in the Bill and one which would carry out what I believe is the intention on both sides. Since the Amendment was put down, however, we have observed that the noble Lord opposite on behalf of the Government has put down a new clause to be inserted after Clause 4. I had thought this would come as an Amendment to Clause 4, but if it is better to put it as a new clause—and no doubt the draftsman knows—I am well content. So far as I am able to follow the matter, and I have had the benefit of advice, I think that the new clause which is about to be proposed by the noble Lord, Lord Lucas of Chilworth, does express what was aimed at in my Amendment, and possibly in a better way. We are getting on comfortably, and I have much pleasure in saying that I will not move my Amendment on the understanding that the noble Lord moves his.

Clause 4, as amended, agreed to.

LORD LUCAS OF CHILWORTH moved, after Clause 4 to insert the following new clause:

Publication of matter described in provisional specification of priority document

" . Notwithstanding anything in the principal Act or this Act, the comptroller shall not refuse to grant a patent, and a patent shall not be revoked or invalidated—

1. (a) where the complete specification is filed or proceeded with in pursuance of an application which was accompanied by a provisional specification or by a specification treated by virtue of a direction under subsection (3) of section three of the principal Act as amended by this Act as a provisional specification, by reason only that any matter described in the provisional specification or in the specification treated as aforesaid as a provisional specification was used or published at any time after the date of filing of that specification;
2. (b) where the complete specification is filed in pursuance of a convention application, by reason only that any matter disclosed in any application for protection in a convention country upon which the convention application is founded, was used or published at any time after the date of that application for protection."

The noble Lord said: I do not think I need weary the House with a long speech on this Amendment. As the noble and learned Viscount has said, it covers his previous Amendment. We put down this Amendment not because we think it better than his, but because the draftsman would prefer it this way, and I think the noble Viscount and I will bow to the wishes of the draftsman. I beg to move.

Amendment moved— After Clause 4, insert the said new clause.—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Clause 5:

Additional powers of comptroller in relation to applications

(4) No amendment of a complete specification shall be made in pursuance of the last foregoing subsection, and no such amendment shall be made in pursuance of subsection (1) of this section after the acceptance of the specification—

(b) so as to make the specification as amended claim an invention larger than, or substantially different from, the invention claimed by the specification without the amendment.

3.8 p.m.

VISCOUNT SIMON moved, in subsection (4) to leave out paragraph (b) and insert: (b) the result of which would be—

1. (i) that the specification as amended would claim subject-matter not in substance disclosed in the specification before such amendment, or
2. (ii) that any act not an infringement of any claim (whether valid or not) in the unamended specification, would be an infringement of any claim (whether valid or not) of the amended specification."

The noble and learned Viscount said: We now approach a more complicated and difficult part of this interesting subject. As the Bill is drawn, in Clause 5 we find "additional powers of the comptroller in relation to applications." The part of that clause which I invite the Committee to consider is subsection (4), which says: No amendment of a complete specification shall be made in pursuance of the last foregoing subsection, and no such amendment shall be made in pursuance of subsection (1) of this section after the acceptance of the specification— (a) Otherwise than by way of disclaimer, correction or explanation"— That is all right— or (b) so as to make the specification as amended claim an invention larger than, or substantially different from, the invention claimed by the specification without the amendment. The question which is raised by my Amendment is whether what is stated under paragraph (b) is stated in the best way.

Undoubtedly this is a very recondite subject. If I understand it rightly, and very likely I do not, the order of events is something like this. A man who invents something and wants a patent goes to the Patent Office and exhibits his document. This is put before one of the examiners of the Patent Office—very skilled gentlemen—who, with great scientific experience, will examine the language of the document. The first requirement is that the examiner has to be satisfied that the specification, as produced is in order. If it is, the examiner so certifies, and thereupon the inventor's proposal is what is called "accepted." That is not at all the same thing as saying he has obtained a patent, but it means that he has got over the first fence.

Then comes the question of whether or not the acceptance is to be followed by the granting of a patent. That is a matter which has to be considered by the comptroller. I think I am right in saying that there are two stages when the comptroller may have to consider whether the document thus accepted requires amendment. The first is after acceptance but before a patent is granted. The comptroller knows that it is in order so far as the examiner's study of it goes, but he has to consider whether or not there should be some change in the language. The second occasion when he may have to do it is after the patent has been granted, when again, in certain cases, he may be invited to consider whether there should not be an amendment of the language. It is in the interests of the patent very often that there should be an amendment, because the patentee avoids difficulties and possible traps, and preserves what he desires to preserve—namely, the product of his own inventive capacity—in the appropriate way.

In Section 13 of the Patent and Designs (Amendment) Act, 1907, there is a proviso which, as my noble and learned friend Lord Maugham indicated just now, is not precisely echoed in the terms of the present Bill. The proviso in the Act of 1907 says: Provided that no amendment shall be so allowed that would make a specification, as amended, claim an invention substantially"— the word "substantially" is used: larger than, or substantially different from, the invention claimed by the specification as it stood before the amendment, and so forth. I think I am right in saying that Mr. Kenneth Swan's Committee, to which we owe so much in this connection, have suggested that the word "substantially" before the word "larger" should come out; so that it will not be "substantially larger" but just "larger." That is a point which I think is thought by the experts to be right. But the real question is: Is this phrase "substantially different from the invention" the best phrase? Whether it is the best phrase or not, I do not think it will be disputed that it is a phrase which has given rise to a good deal of uncertainty and doubt. It may be that a better phrase cannot be found. Such are the limitations of human language, and perhaps of the human mind, that in certain matters we must be content with something that is not pellucidly clear. I think I am right in saying that this phrase: … claim an invention substantially larger than, or substantially different from, the invention claimed by the specification as it stood before the amendment, has caused much difficulty and uncertainty.

It has sometimes been held that if you are considering that question, all you have to do is to compare the claims, and nothing else—though I think there is another view also on that. At any rate, as does sometimes happen, when the courts have had to apply these words and expound them they have tended to expound them by using other language which is not necessarily very much clearer. Obscurum facere per obscurius is a charge which no doubt one ought not to allege against any judicial authority.

However, the suggestion is—I need not say I do not make it myself, as I am not an expert on this subject; I have tried only vaguely to understand a little of it—that the words which have been put down in my name would express better what is intended. Some people may take the view—I believe some authorities would take the view—that the clause as it stands in the Bill has the exact meaning which I have endeavoured to express in my Amendment. If that is the case, so much the better. But, even so, it is thought that this re-draft would state better what in all fairness the law should be, and that it does not do more than give the patentee that which is fairly his.

May I just put on record these three or four sentences, without seeking to persuade everybody in the House forthwith? The re-draft as shown in my Amendment, merely indicates the principle that a patentee may, by his amendment, claim subject matter which is in substance disclosed in the body of the unamended specification, but subject to certain safeguards which are inherent in the clause. Two safeguards I have mentioned. First there is the case of an amendment to improve the position of the patent. As the Bill says, and as the previous law said, that must be done only "by way of disclaimer, correction, or explanation"; it cannot be dome by addition. The patentee cannot say: "On second thoughts, I would like to amend my claim by adding so and so." That is a very important and necessary limitation. The second safeguard is this. As proposed, these words will make it impossible for a person who infringed no claim of an unamended specification to be caught by the amendment. If a man up to now has infringed nobody's rights, he must not after the event be put in the position where the patentee can say: "Well, I have now amended my claim, and therefore you have now infringed my rights." That would be manifestly wrong and unfair. That point is provided for in the language of this Amendment.

I have the feeling that the Board of Trade might well be disposed to accept this proposal, provided it is clear on examination that the adoption of it would not bring about wide initial claims. No doubt, when a man is to be granted a monopoly for an invention, it is quite proper that the right to stop other people from using it should not be given in language which is unduly vague and wide. But I submit for the consideration of those who understand this matter much better than I do that there is an answer to that anxiety, which I believe has been entertained by the Board of Trade. The answer is in Clause 9 of the Bill, which provides that patents of addition can be obtained without being exposed to the attack based on the main invention, and consequently a broad initial claim ceases to be attractive and becomes unnecessary because future developments outside it can be protected by patents of addition. That is the effect of Clause 9. I am aware that Mr. Swan's Committee considered this matter, and they apparently thought that last consideration rather justified a conclusion that this clause which allows amendment should not be enlarged. But with the great respect which I feel—and everybody who has ever considered this subject must feel—for Mr. Swan and his Committee, who have worked so diligently and with such clear heads, I submit that Clause 9 works the other way. I should have thought the opposite conclusion would have been more logical, and that the curb on wide initial claims and the temptation to make them which is afforded by Clause 9, would justify giving these enlarged powers of amendment.

I have at different times inflicted on the House and the Committee a great many observations on a great many subjects, but I am not conscious that I have ever been so bold as to stand here and speak on anything so technical with so slender a foundation. I apologise, but somebody has to do it. I have endeavoured to put in as clear terms as I can command what I believe to be the argument. I feel sure that the noble Lord opposite will not reject the proposal with contumely; and if he is not able here and now to accept it, I hope that what I have said on this difficult subject will justify further consideration. I beg to move.

Amendment moved— Page 4, line 43, leave out paragraph (b) and insert the said new paragraph.—(Viscount Simon.)

VISCOUNT MAUGHAM

For my part, and certainly with no arrogance in the feeling that my opinion is necessarily right, I agree in substance with the Amendment of my noble and learned friend who has just spoken, with one single addition which I will explain in a minute. I like it better than the clause in the Bill as it comes before us, because it is so much simpler. I think everybody who reads it, and who knows anything about patents, will be able to understand the questions arising when an amendment of a complete specification comes before the comptroller. The first question is that the amendment is not to be otherwise than by way of disclaimer, correction or explanation. That is fair enough. But your Lordships will note that "explanation" may mean a great many things, and I should not be at all surprised to hear that the courts had to decide whether something in the explanation does go beyond a disclaimer or correction.

There are two main questions. If your Lordships accept my noble friend's Amendment, the first is that we should look at the amended specification, compare it with the first and ask: Is the subject matter the same? The specification must not claim subject matter which has not yet been disclosed, so we compare the two and see whether one is wider than the other. The second question that we ask ourselves is whether an act, not an infringement of any claim in the unamended specification, would be an infringement of a claim in the amended specification. That again is a simple proposition. It may be one of great difficulty in fact, but everybody can understand what it means. There is only one thing I have to say, and that is to suggest for the consideration of the Government that only one case is left out in the proposed amendment which we are now considering. That is the case of an invention which does not differ vitally, and does not rely on any subject matter which has not been disclosed, but which prohibits a claim for an invention larger than that which is disclosed. It is a small addition in regard to the width of the claim which I think ought to be prohibited. It may not be within any of the three questions which I have mentioned to the House, but the claim may be a trifle larger, particularly if it is a chemical patent. People working with a chemical patent keep on discovering very small improvements and very small differences of temperature, or, it may be, some slight addition of some chemical substance, which means that while the subject matter is the same the invention is a little larger. That is the thing which—though it may not often occur—I think should be barred by Clause 5 of the Bill.

I am suggesting that the Government should accept the Amendment which we are now considering, with the addition, in sub-paragraph (ii), or perhaps it would come better in sub-paragraph (i), of some such words as: … that the specification as amended would claim either an invention larger than that claimed in the specification without the amendment or not in substance disclosed in that specification. In other words, if we make the words cover the slight amendments about which I am thinking—which do not really constitute a different specification, or one which is not in substance disclosed—I think that the Amendment will have the advantage of simplicity, and will cover every point which is mentioned in subsection (4) of Clause 5 of the Bill.

LORD LUCAS OF CHILWORTH

As the noble and learned Viscount, Lord Simon, has said, this is where we have our first "tiff," after going along so well. I hope to persuade noble Lords that the wording in the Bill is better than the noble Viscount's Amendment. As the noble Viscount has said, this is the most technical part of the Bill, and he has made the admission that he does not know much about it and has to be guided by experts. I am prepared to say exactly the same. Therefore this is really a conflict of expert opinion, of which the noble Viscount and I are only the mouthpieces. The experts at my disposal claim that the Amendment as proposed by the noble Viscount would lead to a wide and covetous initial claim. The Swan Committee considered this point with great care, and on a great deal of evidence, and as they put the matter in far better language than I could hope to do, I will, with your Lordships' permission, quote what they said. I quote from paragraph 221, page 44, of the Swan Committee's Final Report: It has been strongly urged that greater latitude in amendment should be permitted than that allowed by these Sections, and that the power of amendment should be so enlarged as to permit the re-drafting and widening of the claims, provided that the claims so amended do not contain matter beyond that disclosed in the specification. On the other hand, it has been objected that no such extension of the powers of amendment as that proposed should be permitted, as it would tend to encourage or condone the loose drafting of claims and might give rise to the substitution of claims for those originally made, based upon vague or general language in the specification which, in the light of subsequently acquired knowledge, might appear to cover an invention which it was not originally intended to cover. We have come to the conclusion that it is undesirable to enlarge the powers of amendment in the way suggested. We think, however, that a sufficient measure of relief can be given to patentees who have failed to draft their claims in a way adequately to cover their inventions, by giving them the opportunity of rectifying the omission in the claims they have made, in cases where the circumstances permit of this, by filing patents of addition to cover such variations or amplification of the monopoly claimed in respect of their basic invention as they may deem necessary, and it is for that reason that we have recommended in the appropriate Section of the Acts that patents of addition should not be liable to be held invalid merely because they showed no inventive step beyond the disclosure in the basic specification. Your Lordships will see in the Marshalled List au Amendment to Clause 9, at page line 34, which gives effect to the latter part of the observations of the Swan Committee. I think that that Amendment meets substantially some of the points which the noble and learned Viscount has made, and I therefore invite him to withdraw his Amendment. I think it is proper to say that all the weight of technical opinion—and the Swan Committee heard a lot of evidence on this matter—is in favour of what we propose. Our proposals, if I may use the expression, are pure Swan. I hope, therefore, that the noble and learned Viscount will see his way to withdraw his Amendment.

VISCOUNT SIMON

I am grateful to the noble Lord for so clearly expressing the view which he has been led to adopt. I was aware of the passage in the Swan Report and, indeed, inferentially I referred to it. I will certainly withdraw my Amendment at this stage; I should not dream of pressing it now on my own authority. But I do not wish the matter to be regarded on either side as disposed of, because we are all trying to make this difficult part of the law as good as we can. I would say only that I wonder whether, in reaching the view just expressed by the noble Lord, sufficient importance has been attached to the power of the court in its discretion to refuse an amendment if the conduct of the patentee justifies that refusal. That is a discretionary power, and not automatic, and it is only to cover cases which in ordinary fairness ought to be covered that this proposal is made. I will gladly accept the noble Lord's suggestion and withdraw my Amendment now, but I wish it to be clearly understood that the matter will need further consideration. I beg leave to withdraw my Amendment.

LORD LUCAS OF CHILWORTH

I am grateful to the noble and learned Viscount. I suggest that we get our experts together, and I hope that they will agree as easily as the noble and learned Viscount and I appear to agree.

VISCOUNT MAUGHAM

May I remind the noble Lord in charge of the Bill that the question on which this Amendment is based is the question of whether there should or should not be a new patent? In other words, if the power of the comptroller is applied under Clause 5, there will not be any new patent at all. If he does not allow something of the sort to be done, it can probably be done by a patent of addition under Clause 9. The two things are quite separate. The first says: "If you amend your specification you ought not to come to us again." The second says: "Here is a new patent which we give you as on a different date." With great respect, I venture to think that the passage which the noble Lord has read from the Swan Report is not relevant to the present question, because it deals with a patent of addition and not with the powers of the comptroller to amend the specification.

LORD LUCAS OF CHILWORTH

I am grateful to the noble and learned Viscount for what he has said, and I will see that the matter is looked into between now and Report stage.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Clause 6:

Additional grounds of opposition to grant of patent

6. An application for a patent may be opposed under section eleven of the principal Act upon any of the following grounds, in addition to the grounds mentioned in that section, that is to say—

1. (a) that the invention, so far as claimed in any claim of the complete specification, was used in the United Kingdom before the priority date of that claim;
2. (b) that the subject matter of any claim of the complete specification is obvious and does not involve any inventive step having regard to matter published in the United Kingdom, before the priority date of the claim, in any specification or other document (not being a specification or document of any class described in subsection (1) of section forty-one of the principal Act) or having regard to what was used in the United Kingdom before that date;

Provided that for the purposes of paragraph (a) or paragraph (b) of this section no account shall be taken of any secret user.

LORD LUCAS OF CHILWORTH moved, in paragraph (b), after "and" to insert "clearly." The noble Lord said: The object of this Amendment is to indicate clearly and without disturbing the general onus of proof on the opponent in all opposition proceedings that the opposition will fail on this particular ground of lack of subject-matter unless it is quite plain that the invention is completely lacking in that subject-matter. I do not think I need say more, and I beg to move.

Amendment moved— Page 5, line 9, after ("and") insert ("clearly").—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

I agree that we can dispose of this matter quite briefly, but there is one observation I should like to make. I had originally put down a rather different form of words aiming at the same purpose as that which the noble Lord has just explained. It is very important, of course, that when the comptroller is considering whether an opposition to the grant of a patent is justified he should not refuse it on the ground that there is no inventive step, unless that objection is really established. The burden is upon the objector. Therefore, I had put down as an alternative to what was in the Bill words which would have said that the subject matter of any claim of the complete specification is obvious and manifestly does not involve any appreciable inventive step. I think that those words, though longer, are to be preferred. We have had some discussion about this matter, and I am glad to know that a modification is thought proper. On reflection, I am a little doubtful whether the word "clearly" coming in where he proposes it is in the right place. Should it not be "is clearly obvious and does not"? However, that is a matter for your consideration hereafter.

I have only one other observation to make. I have now drafted an Amendment in this respect. When the phrase on the subject of a ground of opposition to the grant of a patent is changed as the Government propose here in Clause 6, it seems to me that it will also have to be changed in Clause 13, where a similar question arises, not as a ground of opposition to the grant of a patent, but as a ground for getting a revocation of the patent. Because, when one turns to page 9, line 32, one sees the same words: "was obvious and did not involve any inventive step." I should like to give notice now to my noble friend that it seems to me that we could hardly have two differing phrases, one which introduces this adverb "clearly" and the other which does not. Therefore, I am handing in a manuscript Amendment to put in "clearly." Otherwise, I agree to the Amendment.

On Question, Amendment agreed to.

Clause 6, as amended, agreed to.

Clause 7 agreed to.

Clause 8:

Extension of term of patent

(2) An order for the extension of the term of a patent may be made under the said subsection (6) on the application of a person holding an exclusive licence under the patent (that is to say a licence from the patentee giving to the licensee, or to the licensee and persons authorised by him, to the exclusion of all other persons, permission to make, use, exercise and vend the invention) if the court or comptroller is satisfied that the licensee as such has suffered any such loss or damage as is mentioned in that subsection.

LORD LUCAS OF CHILWORTH

This Amendment: is put down here, but I hope the noble Earl, Lord Munster, will feel that it expresses what he desires in the next Amendment, which is in his name, better than he has put it. I therefore content myself at this moment with formally moving the Amendment, and await the observations of the noble Earl. Perhaps I could help him. We think that the noble Earl's Amendment is too restrictive and might operate against the interests of British licensees. Therefore, I move this Amendment in the hope that the noble Lord will not move his when we come to it.

Amendment moved— Page 6, line 3, leave out from ("holding") to ("a") in line 4.—(Lord Lucas of Chilworth.)

THE EARL OF MUNSTER

I am much obliged to the noble Lord for putting down an Amendment in his name which I think certainly goes a long way, if not the whole way, to meet me. The purpose of my Amendment was really to bring this clause into conformity with the words of Clause 34 (3), where precisely the same words are found. If the noble Lord could give me an answer to this next question, I should be quite happy that this Amendment covers my point. Under the proposal which is on the Paper, would the exclusive licensee under my Amendment be able to obtain extension of the patent regardless of the wishes of the patentee who had, of course, surrendered his rights, although a royalty would still be payable? So far as I understand it, the noble Lord has met my Amendment, but if he could give me an answer to that question, either now or later, I should be grateful.

LORD LUCAS OF CHILWORTH

I shall have to look into that matter before committing myself to a definite answer, but my impression is that the noble Earl is right. However, I will not commit myself on that particular point. I will look into it.

On Question, Amendment agreed to.

Clause 8, as amended, agreed to.

Clause 9:

Patents of addition

(4) The grant of a patent of addition shall not be refused, nor a patent of addition revoked or invalidated, on the ground only that the invention claimed in the complete specification does not involve any inventive step having regard to the main invention.

LORD LUCAS OF CHILWORTH

This is merely a drafting Amendment. I beg to move.

Amendment moved— Page 6, line 31, leave out ("nor a patent of addition") and insert ("and a patent granted as a patent of addition shall not be").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH moved to add to subsection (4): or to any improvement or modification of the main invention in respect of which a patent of addition has been granted, or in respect of which an application for such a patent is pending. The noble Lord said: This is the Amendment to which I previously referred when the noble and learned Viscount, Lord Simon, was moving his Amendment about a patent of addition. The object is to protect a patent of addition against invalidity on the ground mentioned in the subsection in the Bill—that is, lack of subject matter or inventive merit when compared with the main invention. As the subsection stands, a patent of addition could be refused or revoked on the ground that the invention protected by that patent of addition did not involve an inventive step over the invention covered by the existing patent of addition. We think it wise to amend it in that way. I beg to move.

Amendment moved— Page 6, line 34, at end insert the said words.—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

I had down an Amendment which aimed at exactly the same object. I am quite prepared at this stage to accept the form of words which the noble Lord has suggested, which, so far as I can follow, covers exactly the same point.

LORD LUCAS OF CHILWORTH

I had hoped that the noble and learned Viscount would agree to this Amendment.

On Question, Amendment agreed to.

Clause 9, as amended, agreed to.

Clauses 10 and 11 agreed to.

Clause 12:

Voluntary indorsement of patents

12.—(1) The comptroller shall not be required to advertise a request under section twenty-four of the principal Act for the indorsement of a patent with the words "licences of right."

THE EARL OF MUNSTER moved to add to subsection (1): but shall notify the request to any person entered on the register as entitled to an interest in the patent and shall give that person an opportunity of being heard before acting upon the request. The noble Earl said: This Amendment which I now move seeks to alter the first subsection of Clause 12. We have no objection—and indeed I think nobody could have any objection—to the provision in that subsection whereby the comptroller is released from his obligation to advertise a request for the indorsement of a patent with the words "licences of right," but we do feel that he ought to be bound to notify any person who has an interest and whose name is entered on the roster. The words which I intend to insert in this subsection would, as I understand it, make that provision. My intention is really to put the inventor and the assignee in precisely the same position. I feel that there is considerable strength in that proposal, and, without further lengthy explanation, I trust that the noble Lord will see his way to accept it. I beg to move.

Amendment moved— Page 8, line 28, at end insert the said words.—(The Earl of Munster.)

LORD LUCAS OF CHILWORTH

I think that on balance of argument the noble Earl is right, although it might cause some delay which we were anxious to avoid. I have pleasure in accepting the Amendment.

THE EARL OF MUNSTER

I am much obliged to the noble Lord.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH moved to add to the clause: (5) An appeal shall lie from any decision of the comptroller under the last foregoing subsection. The noble Lord said: This Amendment provides an appeal to the Appeal Tribunal from a decision of the comptroller settling the terms of a licence under patent indorsed "licence of right," granted to an existing licensee in exchange for his existing licence. I beg to move.

Amendment moved— Page 9, line 8, at end insert the said subsection.—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Clause 12, as amended, agreed to.

Clause 13:

Revocation of patent by court

13.—(1) The following section shall be substituted for section twenty-five of the principle Act:—

"25.—(1) Subject to the provisions of this Act, a patent may, on the petition of any person interested, be revoked by the court on any of the following grounds, that is to say—

(i) that the subject matter for which protection is claimed is not sufficiently defined in the claim or claims of the complete specification, or that any such claim is not fairly based on the matter disclosed in the specification;

or on any other ground on which a patent might, immediately before the first day of January, one thousand eight hundred and eighty-four, have been repealed by scire facias.

(2) For the purposes of paragraph (e) of subsection (1) of this section no account shall be taken of any previous working of the invention in secret—

1. (a) for the purpose of reasonable trial or experiment only; or
2. (b) by a Government department or any person authorised by a Government 445 department, in consequence of the communication or disclosure of the invention by the applicant for the patent directly or indirectly to a Government department or person authorised as aforesaid; or
3. (c) by any other person in consequence of the communication or disclosure of the invention by the applicant for the patent and without his consent or acquiescence;

and for the purposes of paragraph (f) of the said subsection (1) no account shall be taken of any secret user.

VISCOUNT SIMON moved in subsection (1) to leave out sub-paragraph (i) and insert: (i) That the scope of any claim of the complete specification is not sufficiently and clearly ascertained or that any claim of the complete specification is not fairly based on the matter disclosed in the specification. The noble Viscount said: We now come to an important clause of the Bill. As your Lordships see, Clause 13 seeks to substitute an elaborate form of words for Section 25 of the principal Act; and the main purpose of the clause is, I venture to think, right enough. It is a clause which lays down what are the grounds on which a patent may, on the petition of any person interested, be revoked; and there is a list of grounds running from (a) to (k). The proposal which I now put before the Committee is that we should leave out paragraph (i) and substitute a new form of words.

As the Bill is now drawn, the ground for revocation expressed in paragraph (i) is thus stated: that the subject matter for which protection is claimed is not sufficiently defined in the claim or claims of the complete specification, or that any such claim is not fairly based on the matter disclosed in the specification. Your Lordships will notice the phrase "that the subject matter for which protection is claimed." My proposal is that we should substitute for that a paragraph which would run (i) that the scope of any claim of the complete specification is not sufficiently and clearly ascertained or that any claim of the complete specification is not fairly based on the matter disclosed in the specification. The latter part of it is common to both forms. I venture to think that the words which are down in my name are to be preferred, and I hope the Government will agree. Strictly speaking, it is not "subject matter" which is defined in a claim. What the examiner does is to examine the document, and see what is the scope of the claim. That, I venture to think, is the proper way to express the matter, and my wording is further justified on the ground that it is in fact the language of the 1907 Act. The question is: Is there ambiguity here; and what, on the proper view of the matter, is the scope of the claim?

Unless I have misunderstood the position, I think Mr. Swan's Committee considered this matter. They did not recommend this change of words, and much as I respect the skill and ingenuity with which this new Bill is drafted—the draftsman is certainly to be commended—do not let us unnecessarily substitute a new form of words for an old form which is well known to everybody who has had anything to do with patents, and which, as it seems to me, can be changed only at the risk of creating an ambiguity and the suggestion that something different is now being provided. The inference is that if you change the language you mean something by it. If nothing is intended by the change, I hope very much that those who are responsible here will feel that it is much better to speak of "the scope of the claim" rather than "the subject matter." I beg to move.

Amendment moved— Page 9, line 43, leave out paragraph (i) and insert the said new paragraph.—(Viscount Simon.)

VISCOUNT MAUGHAM

To my mind no question is more difficult than to define in many cases what is the scope of the invention. The books are full of cases where the courts have been greatly puzzled to know how to deal with what we always used to call "the subject matter of a claim." That itself is rather an invention of lawyers, to describe what they mean when they are dealing here with the matter of paragraph (h) of the old Section 25, or with the Amendment proposed by my noble and learned friend. I am afraid that I do not know how to amend the words which for so long have been the only definition or explanation that can be given of "subject matter." The old story, which everybody understood, was that if the subject matter had not been clearly stated in the specification the patent was bad; but though many learned people have attempted to tell us what it means, they have never yet succeeded. This is the best thing I have heard about it, that there must be an inventive step and, in default of an inventive step, there is no proper subject matter for the patent.

I wonder whether I may tell your Lordships a very short story which is rather germane and will take your minds off this troublesome question for one minute. When I first had anything to do with patents and discussed with eminent experts what they really meant by "subject matter," I was told a story of a Chancery barrister who went to the West Indies. He was ordered there, many years ago, because he was suffering from overwork and was a very sick man. When he went on the ship to Jamaica, and places in the neighbourhood, he saw the people in the ship hauling up an anchor chain, which he observed was exceedingly heavy and made of enormous links. He said: "Why do you need links of this size? It is very unwieldy. Surely you could do with something very much smaller." The links of that date were oval-shaped, and they had not between them the crossbar, the technical name of which I have forgotten. They told him that what happened when a big strain was put upon the links of such a chain was that they went in a little, gave a little and then cracked.

On his way home the barrister thought that over, and thought to himself that it would be quite easy to prevent their bending inwards like that by putting a cross-piece in the links of the chain. When he got back to his work he took out a patent for that invention. One would have supposed it was the simplest thing in the world to think of, yet nobody had thought of it before. There was an action about the invention. It was held that there was a sufficiently inventive step, the courts being partly guided by the fact that no one else had thought of it before. And as the result of that patent the man made a substantial fortune. There is an example of subject matter. There are dozens of cases where a claim in respect of simple things fails, but quite a number—hundreds of cases in fact—in which they succeed.

If I may say so with the greatest respect to the draftsman of this clause, and to my noble and learned friend, with whom I have so often been associated in legal matters, I am not at all sure that either of these references to "subject matter" or "the scope of any claim of the complete specification" will be of any use in a practical case before the courts. I think the best way to deal with the matter is to let the experts once more consider the two forms of words, and see whether they can find anything else to help them. I urge that they should bear in mind what I feel at the bottom of my heart are words which ought not to be omitted—words which I have heard so often in the courts—"inventive step." I do not believe that we can define the matter very much more precisely than that. Apologising for having taken up so much of your Lordships time while contributing so little to the debate, I would humbly suggest that that is the course which the noble Lord, Lord Lucas, should adopt.

LORD LUCAS OF CHILWORTH

Noble Lords will notice that this Amendment in the name of the noble and learned Viscount is marked with a star. That means it is the first time that it has appeared in the list of Amendments. It was not in the list until this morning. I myself did not see it until five o'clock last night, and who am I to decide the merits of this matter in the few hours at my disposal when two such eminent lawyers on the Front Opposition Bench cannot agree between themselves upon it? If, therefore, the noble and learned Viscount will withdraw his Amendment for the time being, I will undertake to have consultations with my expert advisers, and with the noble and learned Viscount, between now and the next stage of the Bill with a view to seeing what can be done. We shall have to give these matters consideration, which I think the noble and learned Viscount will admit we have not had the opportunity of doing up to the present.

VISCOUNT MAUGHAM

May I just add one thing which I forgot to say when I was speaking just now? This is only a question of drafting but in a paragraph in this clause the words occur: does not disclose the best method of performing it. There are many inventions which you do not perform at all.

VISCOUNT SIMON

I think that what the noble Lord, Lord Lucas, has just said is quite reasonable. On the understanding that for my own part I do press this reference to "the scope" as a better and safer expression, I am content to follow the course which the noble Lord suggests. Whether we shall then on either side have gained further enlightenment as to the scope or subject matter of this dispute, I will leave it to others to decide. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.6 p.m.

VISCOUNT SIMON moved in subsection (1) to leave out all words from and including, "or on any other ground" to the end of the subsection. The noble and learned Viscount said: I hope that this time I shall secure a clean assent. As I have already said, there is a long list of grounds on any one of which a person interested may apply for a patent which has been granted to be revoked. They are set out in the various paragraphs of subsection (1), and at the end there has been added: or on any other ground on which a patent might immediately before the first day of January, one thousand eight hundred and eighty-four, have been repealed by scire facias. I believe that I am right when I say that either it adds nothing whatever, because the previous list is complete or else there is something which no one has ever been able to define. I cannot think it is right that we should, after making this elaborate list with all these letters of the alphabet, add in effect "or anything else." I hope that the Government will agree, on reflection, that we might well shorten the Bill by striking out these unnecessary words.

Amendment moved— Page 10, line 3, leave out from beginning to end of line 6.—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

Without reservation or qualification I accept the Amendment. I hope that that is as clear as the noble Viscount could desire.

VISCOUNT SIMON

Such an admirable practice has just been established that I hope the noble Lord will do the same next time.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

My Lords, this is purely a matter of drafting. I beg to move.

Amendment moved— Page 10, line 8, leave out ("previous").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

I hope it will be for the convenience of the Committee if I discuss together this Amendment and the next standing in my name, though I will move them separately. They are put down to meet the point which was raised by the noble Earl, Lord Munster, who has himself three Amendments—one at page 10, line 15, and two at page 10, line 20. I shall be pleased, at the right time, to accept these Amendments in principle but my draftsman prefers this method of stating what the noble Earl requires. I hope, therefore, that if I move these Amendments, the noble Earl will not move his. I beg to move.

Amendment moved— Page 10, line 14, leave out from the first ("the") to ("directly") in line 15 and insert ("applicant for the patent, or any person from whom he derives title, having communicated or disclosed the invention").—(Lord Lucas of Chilworth.)

THE EARL OF MUNSTER

I am grateful to the noble Lord for these two Amendments which, in fact, meet the points raised in my three. I shall accordingly not move those Amendments.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

I beg to move the next Amendment.

Amendment moved— Page 10, line 18, leave out from ("the") to end of line 21 and insert ("applicant for the patent, or any person from whom he derives title, having communicated or disclosed the invention and without the consent or acquiescence of the applicant or of any person from whom he derives title;")—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

On Question, Whether the clause, as amended, shall stand part of the Bill?

VISCOUNT MAUGHAM

Before we leave this clause, may I be allowed to make a suggestion. It is on what is little more than a question of drafting, though I suggest that it is of some importance. At page 10, line 25, it is stated that: … a patent may be revoked by the court on the petition of a Government department, if the court is satisfied that the patentee has without reasonable cause failed to comply with a request.… A phrase of this kind appears repeatedly in the Bill; I think I have noticed it half a dozen times. I thought I should find somewhere a clause which stated that "patentee" in this clause refers also to the assignee of the patent who might be the real person who had failed to comply, while the patentee, I suppose, is the person who is the owner of the patent. Suppose he has assigned it to a third party, that party cannot be the patentee.

LORD LUCAS OF CHILWORTH

If the assignee is an exclusive licensee, he stands for all practical purposes in the same position as the patentee.

VISCOUNT MAUGHAM

That is precisely what I agree to, but I am not sure that the word "patentee" covers it.

LORD LUCAS OF CHILWORTH

If it would help the noble and learned Viscount, I will have this matter looked into.

VISCOUNT MAUGHAM

I am much obliged. That is all I want. There may be some answer to it.

On Question, Clause 13, as amended, agreed to.

Clause 14 agreed to.

Clause 15:

Compulsory licences

15.—(1) At any time after the sealing of a patent, any person interested may apply to the comptroller for a licence under the patent upon any one or more of the grounds specified in the next following subsection.

(2) The grounds upon which application may be made for a licence under this section are as follows, that is to say: (a) that the patented invention, being capable of being commercially worked in the United Kingdom, is not being commercially worked therein or is not being so worked to the fullest possible extent;

(d) that by reason of the refusal of the patentee to grant a licence or licences on reasonable terms—

1. (i) a market for the export of the patented article manufactured in the United Kingdom is not being supplied; or
2. (ii) the working or efficient working in the United Kingdom of any other patented invention is prevented or hindered; or

(3) Subject as hereinafter provided, the comptroller may, if satisfied that any of the grounds aforesaid are established, order the grant to the applicant of a licence under the patent upon such terms as the comptroller thinks fit:

Provided that— (a) where the application is made on the ground that the patented invention is not being commercially worked in the United Kingdom, and it appears to the comptroller that the time which has elapsed since the sealing of the patent has for any reason been insufficient to enable it to be so worked, he may by order adjourn the application for such period as will in his opinion give sufficient time for the invention to be so worked;

VISCOUNT SWINTON moved, in subsection (1), after the word "after" to insert "the expiration of three years from the date of". The noble Viscount said: This is a point of substance, but I hope not a point of controversy. I feel sure the noble Lord in charge of the Bill will accept this Amendment. It is common ground to all of us that the patentee should have reasonable opportunity to develop and work his patent, and it is equally common ground that, if he fails within a reasonable time to do so, other people should not be prejudiced and should have the opportunity to claim the right to work the patent. The issue is, what is a reasonable time? According to the Bill as drafted, a reasonable time is no time. The day after a patent is sealed anybody can come along and say that the patentee is not working his patent, and claim the right to work it. Obviously that cannot be the intention, although it is what the words of the clause say. We are not dealing here with a virgin field or even a field of slight experience. There has been for many years a period of grace of three years. The Bill abolishes that and substitutes no period for it. I have seen no argument yet advanced in support of that change. Tribute, and deserved tribute, has been paid to the Swan Committee, and this was a matter to which the Swan Committee directed a great deal of their attention, not only as a technical matter but as one of great practical importance. Having heard both owners and users of patents, the Committee came to the conclusion that the three years' period ought to stand. They said that to do anything else would discourage the registration of patents and the investment of capital in developing them. I do not say there was no evidence on the other side—the Government gave evidence—but they found on the evidence of the owners and users of patents that the three years which had been established and was working had withstood the test of time.

The question does not rest there. This is a subject of international convention. Under the international convention, by which we are bound and to which domestic legislation has conformed, the period of three years is laid down. It is very important in these matters that we should have common patent practice all over the world. I know nothing about this technically, but, as a manufacturer, I know something about the practical side, and the policy on patents and international agreement on their use are of great importance in international trade. We cannot get out of that international convention by domestic legislation. We can penalise our own subjects, but we cannot penalise the subjects of other countries. Observe what a fantastic situation we should get into if we passed this clause. An American who makes an invention in the United States and patents it in this country—and that is a very common practice, for which this international convention exists—would have an absolute right over three years. If he did not develop his patent here within that time, no one could proceed against him. He would be able to claim the benefit of the international convention. On the other hand, an Englishman who makes an invention and patents it here would not have the benefit of the convention. He would have the benefit of it in America, but not in his own country. We want equality in these matters, and it would be indeed fantastic to give a preference to every foreign inventor and put a special penalty on every British inventor.

If it is thought, contrary to what the Swan Committee found, that it would be desirable to vary the three years and have a shorter period, then the right thing to do would be to have another international convention and obtain the views of the other great inventing countries and see whether they would agree to some other period. That period would be the rule under the international convention, and the domestic legislation of all signatory and ratifying countries would conform. That is a practical way of solving the difficulty. So far the Government have not advanced any argument in favour of this change, which is contrary to the international convention, which cannot be made binding for any foreign inventors and which is contrary to the judgment of the Swan Committee. It is the intention and desire of the Government that inventors shall patent an invention so that those inventions may become known and used by them, and, if not by them, by other people. If they do not give a reasonable measure of security to an inventor, he will not patent his invention. There is a strong tendency to-day not to take out patents—perhaps not so great in this country as in the United States. A large number of people make a living out of stopping patents by all the various processes by which they can be stopped or infringed. The result is that some of the biggest firms in the United States, who are the country's biggest inventors, with great research departments, do not regard patents as worth while. They say that it is better to keep their knowledge in their own teams. They have the "know how"; they will manufacture the invention and take the lead. If they cannot keep the lead, then they are inefficient.

I do not think that is a good thing. We want knowledge spread. But we shall not get it spread—and spread by the people who are best able to spread it and to contribute—unless we give those people protection. They are not people who sterilise things; they are the kind of people who have their great design and research staffs. They spend millions of pounds on those staffs, who are not there to sterilise but, on the contrary, in order that they may be productive and creative. I say no more. Precedent, convention, practical convenience and a common aim we all have in mind. I hope the Government will accept this Amendment.

Amendment moved— Page 11, line 1, after ("after") insert ("the expiration of three years from the date of").(Viscount Swinton.)

LORD LUCAS OF CHILWORTH

The noble Viscount has been so persuasive and his arguments have been so sound that I have much pleasure in accepting his Amendment. As this is the noble Viscount's first intervention on this Bill and he has scored a success, may I plead with him to mark that on the credit side of my account?

VISCOUNT SWINTON

I am obliged to the noble Lord.

On Question, Amendment agreed to.

VISCOUNT SIMON moved in subsection (1) after "interested" to insert: "including any Government department." The noble and learned Viscount said: I hope that this Amendment can be dealt with just as quickly. As the Bill is at present drawn, Clause 15 provides that "any person interested may apply to the comptroller" for the purposes there indicated. Then, when one turns on to Clause 18, there is a provision which is specially for the benefit of a Government Department. It says: At any time after the sealing of a patent, any Government department may apply to the comptroller for the indorsement of the patent with the words 'licences of right'", and so on. It does not seem to me—and I think others share my view—at all desirable that where there is not particular necessity for it a Government Department should be in a different position in this respect from anybody else. It may be said that "any person interested" includes a Government Department. If that is so, then Clause 18 (1) is unnecessary. I should have thought that a simple way of dealing with the whole matter would be to insert after the words "any person interested" the words "including any Government department." When later we come to Clause 18 we shall move to leave out subsection (1) of that clause. We seek to provide merely that an application may be made either by a private person or by a Government Department. I beg to move.

Amendment moved— Page 11, line 2, after ("interested") insert ("including any Government department").—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I am sorry I cannot be quite so quick with this Amendment as I was on the previous one. I have two objections to this. First, I maintain that "any person" includes a Government Department. Clause 18 (1) applies expressly to a Government Department, to the exclusion of anybody else. That is why "Government Department" is mentioned there. But "any person" right the way through this Bill—and, my legal advisers tell me, in any other Bill—includes a Government Department.

VISCOUNT SIMON

The phrase is, "any person interested." I need not say that I shall pay all due respect to the advice which the noble Lord gives us as to the meaning of "any person interested." The noble Lord has a habit of saying that a Government Department is "any person interested."

LORD LUCAS OF CHILWORTH

With respect, not quite. "Interested" has a different meaning. "Any person interested" means any person who intends to work the patent that he applies for; he must be interested in working the patent. The noble and learned Viscount will see the words in Clause 15: At any time after the sealing of a patent, any person interested may apply to the comptroller, for this, that and the other. The words "any person interested" include a Government Department who are interested to make that article. But the word "interested" means that they must be interested in the manufacture of the article for which they are applying for a licence under a patent. I am advised that "any person" includes a Government Department, and it would be wrong in this context, where a Government Department is not specifically and expressly meant, to put in the words "Government Department." It would mean an alteration right the way through the Bill, and where, in any clause other than Clause 18, a Government Department was not mentioned, it would be excluded. That is wrong, because "any person" includes a Government Department. I therefore hope that the noble and learned Viscount will not press his Amendment.

VISCOUNT SIMON

I am grateful to the noble Lord for his very dogmatic exposition of this matter.

LORD LUCAS OF CHILWORTH

It was not intended to be a dogmatic exposition.

VISCOUNT SIMON

Then I will say his very clear exposition. He may be right. I am more concerned for the moment to register the fact that it is admitted by the Government that, whether the words do or do not have that effect, it is intended to include a Government Department in Clause 15. So long as that is so, then it is a mere question of what is the proper way to express it, and I have no doubt that that can be finally decided. I merely point out that, so far as Clause 15 is concerned, we cannot merely recite the words "any person" and say that a Government Department is a person. I am aware of the interpretation, but the question is whether or not, if a Government Department wish to act, they can apply to the comptroller for a licence. To whom would a licence be granted? To the Government Department?

LORD LUCAS OF CHILWORTH

Yes.

VISCOUNT SIMON

That may be so. We cannot be too clear, but possibly we can leave it for the moment. I am sure that the matter will be considered with complete impartiality by all who want to ensure that the Bill says what we both agree it means.

Amendment, by leave, withdrawn.

4.28 p.m.

LORD LUCAS OF CHILWORTH moved, in subsection (1) to omit "for a licence under the patent." The noble Lord said: I trust it will be for the convenience of the Committee if I deal with the Amendments at page 11, lines 2, 4 and 6 together. If your Lordships see fit to accept those three Amendments, then subsection (1) of Clause 15 will read—and I include, of course, the Amendment of the noble Viscount, Lord Swinton, which we have just accepted: At any time after the expiration of three years from the date of the sealing of a patent, any person interested may apply to the comptroller upon any one or more of the grounds specified in the next following subsection for a licence under the patent or for the indorsement of the patent with the words 'licences of right'. What we are doing here is to bring back into the Bill the existing law as it stands under Section 27 of the present Act. If your Lordships would care to turn to Section 27 (3) (a) of the existing Act, you will see that what I am saying is quite correct. Therefore, it has been subject to some re-drafting.

We think it better that it should be stated in this way. This, perhaps, may clear up the point the noble and learned Viscount, Lord Simon, has in mind, and I hope that if I try to explain it clearly he will not accuse me of being dogmatic about it. Under this section and Section 15, a Government Department or a private person can apply for a licence or for the indorsement of a licence only if they qualify as an interested party. To qualify as an interested party it must be the intention of the Government Department or of the private individual to manufacture. It is quite clear that the Government Department who apply under this particular clause for a licence to manufacture or the indorsement of a licence must themselves intend to produce and manufacture. Therefore, I hope the Committee will accept this first Amendment and the two following Amendments. I will deal with line 38 later on. I beg to move.

Amendment moved— Page 11, line 2, leave out from ("comptroller") to ("upon") in line 3.—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

So far as I have any right to express a view, I agree that these Amendments should be made. I am not sure that I have quite followed everything which the noble Lord has just said. I should not have thought that if a Government Department applied for a patent to be indorsed with the words "licences of right," it in the least followed that that Department proposed to manufacture. The effect of the Amendment—which I think is a useful one—is to pick up what is in Clause 18 (1) and transfer it to Clause 15 (1) (to which I think it ought to be transferred), because if one looks at Clause 18 (1) the provision is that: At any time after the sealing of a patent, any Government Department may apply to the comptroller for the indorsement of the patent with the words 'licences of right' upon any one or more of the grounds specified in section fifteen of this Act. … What the noble Lord has just proposed is to move those words into Section 15, so that it will run: At any time after three years, any person interested"— which includes a Government Department— may apply to the comptroller for a licence under the patent or for the indorsement of the patent with the words 'licences of right.' Without thinking it necessary to expound it further or discuss whether a Government Department can themselves manufacture, I am willing to accept the Amendment.

LORD LUCAS OF CHILWORTH

I would not like the noble Viscount to be under any misapprehension. He has mentioned Clause 18. I did not mention Clause 18, because I did not want to confuse the issue. Clause 18 deals with an entirely different matter from Clause 15. Clause 15 is linked with Clause 18, but the purpose of Clause 18—which it would be more appropriate to discuss when we come to it—is not one of the main reasons why this subsection has been re-drafted. We now propose to bring Clause 15 into line with Clause 18 in accordance with the wishes expressed by the noble Viscount on Second Reading. We have jettisoned a good deal of the original Clause 18, and that is one of the reasons why we have re-stated the law as it stands at the present time.

VISCOUNT SIMON

I do not think I was inaccurate. The noble Lord thought I was referring to Clause 18. I was referring to subsection (1) of Clause 18. So far as I can see—I may be wrong—subsection (1), on his own motion, is being inserted in Clause 15, and that is quite right. I had not anticipated anything about the rest of Clause 18.

On Question, Amendment agreed to.

Amendments moved—

Page 11, line 4, at end, insert ("for a licence under the patent or for the indorsement of the patent with the words 'licences of right'")

Page 11, line 6, leave out ("a licence") and insert ("an order").—(Lord Lucas of Chilworth.)

On Question, Amendments agreed to.

VISCOUNT SIMON moved, in subsection (2) (a) to omit "possible extent" and insert, "extent that is reasonably practicable." The noble and learned Viscount said: In moving this Amendment on behalf of my noble friend, I hope it may be thought to be a useful suggestion. We are now on the list of grounds one or other of which must be established if the comptroller is to accept an application made to him under the amended words at the beginning of Clause 15. The first of them is: that the patented invention, being capable of being commercially worked in the United Kingdom, is not being commercially worked therein or is not being so worked to the fullest possible extent. It has occurred to us—and I think this is a useful thing to consider—that those words may be too extreme. It is perhaps difficult, in some cases, to assert that a patented invention is worked to the fullest possible extent. In any case, it is quite likely that though it is being worked to every extent that is reasonably practicable, it cannot be said to be worked to the "fullest possible extent." Consequently, I suggest—and I have some hopes that this will not be thought to be a controversial suggestion—that what we mean is: "or is not being so worked to the extent that is reasonably practicable." Nobody, I imagine, will seek to deprive the patentee of his primary rights if, in fact, it is being worked to the extent which is reasonably practicable. I therefore respectfully suggest to those in charge that those words are to be preferred to the words to be found in the clause, which, on their strict construction, really require more than anybody would suppose. I beg to move.

Amendment moved— Page 11, line 10, leave out ("possible extent") and insert ("extent that is reasonably practicable").—(Viscount Simon.)

VISCOUNT MAUGHAM

I rise only to say that I support the Amendment, which I believe is quite sound.

LORD LUCAS OF CHILWORTH

And I have very great pleasure in accepting it.

On Question, Amendment agreed to.

4.40 p.m.

VISCOUNT SIMON moved, in subsection (2) (d) (ii) after "invention" to insert "which makes a substantial contribution to the art." The noble Viscount said: It is very important, as will be agreed, that we should be careful about the language we use when we define these grounds for applying for a licence. In subsection (2) we find as one ground: (d) that by reason of the refusal of the patentee to grant a licence or licences on reasonable terms.… (ii) The working or efficient working in the United Kingdom of any other patented invention is prevented or hindered;… I suggest that it should be the working or efficient working in the United Kingdom of any other patented invention which makes a substantial contribution to the art is prevented or hindered; Otherwise you may have a master patentee—by which I mean a person interested in a master patent—who, to use a golfing term, stymies an important later invention impinging on the earlier. That is not really intended, and I hope that this Amendment, using language well understood among those who have anything to do with patents, will be thought to express accurately the condition that has to be established. I will not argue the matter further, because it may be that this too will be regarded as a reasonable Amendment to submit, in what is after all a difficult matter to phrase. I beg to move.

Amendment moved— Page 11, line 23, after ("invention") insert ("which makes a substantial contribution to the art").—(Viscount Simon.)

VISCOUNT MAUGHAM

I hope I may say without offence that I am a little in doubt whether the words suggested may not create a certain danger. In the first place, a patent may be a patent for a small matter and need not, in the ordinary way, make a substantial contribution to the art. There may be some important invention in a steam engine, for instance, and yet a patent may be obtained for it, even though it is very small. The second thing that occurs to me is that of utility. In the ordinary way I would say that a patent is bad unless it has what patent lawyers call "utility"—"utility" being used in two different senses. A patent is bad if it is for an invention which will not work in the circumstances for which it is intended or, secondly, if the alleged improvement gives no advantages over what was known before. In either of those two cases, the patent is bad. I do not want to challenge that view, but I am a little doubtful of the meaning which the courts will attribute to the words a patent which makes a substantial contribution to the art. If they refer only to utility they are dangerous, because they suggest something new which has to be discovered.

LORD LUCAS OF CHILWORTH

This is the first time I have had to take sides as between the two noble and learned Viscounts. Perhaps I may settle the matter by saying that I accept Lord Simon's Amendment, and that I will look into the point raised by Lord Maugham.

VISCOUNT SIMON

I am much obliged to the noble Lord. I quite agree that the matter should be looked into, in view of what my noble friend Lord Maugham has said. What I have proposed for consideration and what the noble Lord, provisionally accepts, as I understand it, is what is to be found in the Swan Report. If reference is made to the Second Interim Report of the Swan Committee, page 13, paragraph 54, we find that the proposal for amending the law indicates certain considerations and says amongst other things: There is also the case of a subsequent inventor who has made a substantial contribution to the art, and is prevented or hampered in working his invention or process by reason of the refusal of the patentee to grant him a licence on reasonable terms. It is with that in mind that I have made my suggestion. I agree that we must look into the matter carefully before the Bill reaches another place.

On Question, Amendment agreed to.

VISCOUNT SIMON moved in subsection (2) (d) (ii), after "is" to insert "unfairly." The noble and learned Viscount said: I am not sure whether or not this Amendment is justified, but it may be useful to know. Perhaps I may repeat the words in subsection (2) (d) (ii): the working or efficient working in the United Kingdom of any other patented invention is prevented or hindered; What had occurred to me as worthy of consideration is that in paragraph (e) your Lordships will observe that the test is whether the patent is unfairly prejudiced. In the same way I think in Clause 17 there occur the words: shall not be unfairly prejudiced. Now here the language is not thus qualified, but speaks of the working or efficient working of another patented invention being "prevented or hindered." I do not think that those words are to be found in the present law, though I dare say that they are intended to be equivalent to the present law. I do not press the matter further, but I should like consideration to be giver to it. May it not be that there will be cases in which the working of another patented invention is of necessity to some extent hindered by the refusal of the master patentee to grant a licence? It is possible that that would be good reason for requiring the hindered patent to be made the subject of a licence. It is a difficult point to decide, and I do no more than move the Amendment, in order to know whether my noble friend has considered it. I do not, of course, expect him to accept it straight away. I beg to move.

Amendment moved— Page 11, line 23, after ("is") insert ("unfairly").—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

We have, of course, carefully considered this Amendment, and I admit that there is substance in what the noble and learned Viscount has said. I would, however, prefer to rely upon Clause 17, subsection (1) (c) which provides that the comptroller must have regard to the fact: that the interests of any person for the time being working or developing an invention in the United Kingdom under the protection of a patent shall not be unfairly prejudiced. We think the words "unfairly prejudiced" are better and far more in the interests of those whom it is sought to protect than are the words proposed by the noble and learned Viscount. I hope Lord Simon will consider that those words are sufficient, because they mean that the comptroller, as I said on Second Reading, must have regard to the conditions set out in Clause 17 as they affect the subsection that the noble and learned Viscount has mentioned in this Amendment. Therefore, I hope that he will not press his Amendment.

VISCOUNT SIMON

I am much obliged. I certainly shall not press it at this stage. I question whether the answer suggested is complete—and for this reason. I had not failed to notice the provision in Clause 17, but the provision in Clause 17 uses the word "prejudiced." On page 11, we have two phrases—one phrase, as I have already pointed out, is "unfairly prejudiced." The other phrase, which may not mean quite the same thing, is "prevented or hindered." I think it is a question whether or not it is right to leave that quite unqualified. However, I am not pressing it now. I hope that, with that in mind, the Government will consider whether or not the suggestion is one that ought to be adopted. Very likely I am wrong. I am raising this point only because it is important that we should get things right as we go along.

Amendment, by leave, withdrawn.

4.52 p.m.

VISCOUNT SIMON moved, in subsection (3), after "established" to insert: and that it is in the public interest so to do. The noble and learned Viscount said: It seems to me that these words ought to go in. If the noble Lord will look at it for a moment, he will see that it is a proposal that, before an order is made, it must be in the public interest to make it. I cannot suppose that, unless it is in the public interest, a compulsory licence should be ordered. I can understand the argument that the comptroller will act, as of course he does act, with a desire to do everything that is right and fair as between man and man, and all the rest of it. But is it not just as well, when dealing with an Act of Parliament, to provide that, in the case of a man who prima facie has a monopoly of a patent, the grant of a licence may be ordered if it is in the public interest? If it is not in the public interest, then no compulsory licence should be ordered. I should have supposed that there was an advantage in stating that explicity in the Bill in the place where these different grounds for making the order are set out. I say this without overlooking what is provided in Clause 17, which is a general qualification on the action of the comptroller. I strongly suggest to the Committee and to the noble Lord that it would be right to put in this provision in order that it may be plain that there must be a question of public interest before any compulsory licence can be granted. I beg to move.

Amendment moved— Page 11, line 38, after ("established") insert ("and that it is in the public interest so to do").—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

Our view is that the words which the noble and learned Viscount seeks to insert would be too restrictive and that the object desired is suitably met by his suggested Amendment to Clause 17, at page 13, line 23. I think that the noble and learned Viscount is well aware of this. I might term this Amendment "anti-Swan," because it goes directly contrary to what the Swan Committee in paragraphs 61 and 62 of their Second Interim Report recommend. I quote from paragraph 61, page 14, of the Second Interim Report: we recommend the omission of the words. … It has been represented to us—and we agree with the view—that these words merely introduce an element of uncertainty as to the meaning and effect of the subsection …

VISCOUNT SIMON

I cannot find the passage which you are reading.

LORD LUCAS OF CHILWORTH

It is the Second Interim Report, page 14, paragraphs 61 and 62. Perhaps I may confine myself to reading paragraph 62: For similar reasons, we suggest the omission of the words 'and it is in the public interest that a licence or licences should be granted,' in subsection (2) (d). In the absence of any indication as to the weight to be attached to what might well be the conflicting interests of the patentee and his licensees on the one hand and the consumer on the other, the reference to 'public interest' appears to us to add nothing but uncertainty to the subsection. We think that that observation by the Swan Committee is sound. That is why we think that this Amendment is unduly restrictive and why I hope the noble and learned Viscount will, on reflection, agree with us to let the matter rest on his Amendment to Clause 17, page 13, line 23.

VISCOUNT SIMON

I will not press this Amendment, but I still think it is an important thing to consider, because the clause as now worded, as has just been pointed out, represents a change in the existing law. The existing law provides that the test that ought to be borne in mind is that it is in the public interest that a licence should be granted. I should be sorry if it were argued hereafter that, whereas that was in the previous law, it was omitted from the present Bill, and that therefore the public interest is irrelevant. I cannot think it is irrelevant. Therefore I hope that the matter will be considered from that point of view. I am not pressing my Amendment. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH

May I again ask your Lordships to consider Clause 15 (3) and how it would read with the Amendment which is now proposed: Subject as hereinafter provided, the comptroller may, if satisfied that any of the grounds aforesaid are established, make an order in accordance with the application; and where the order is for the grant of a licence, it may require the licence to be granted upon such terms as the comptroller thinks fit. The subsection is being re-drafted to come into line with the existing law of Section 27 of the existing Act. I beg to move.

Amendment moved— Page 11, line 38, leave out from ("established") to ("upon") in line 39 and insert ("make an order in accordance with the application; and where the order is for the grant of a licence, it may require the licence to be granted")—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH moved, in proviso (a) to subsection (3), after "Kingdom" to insert: or is not being worked to the fullest extent that is reasonably practicable. The noble Lord said Proviso (a) of subsection (3) provides safeguards for the patentee. The purpose of the Amendment is to cover both cases referred to in paragraph (a) of subsection (2), thus meeting certain criticisms of the noble Viscount during the Second Reading debate. A drafting Amendment is also included, consequent upon the acceptance of the noble Viscount's Amendment. I do not think this needs any further explanation. I might add that this is in line with the Amendment we accepted from the noble Viscount, Lord Swinton, and I beg to move.

Amendment moved— Page 11, line 44, after ("Kingdom") insert the said words.—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

I recognise that, and I am grateful.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This is a consequential Amendment upon the earlier Amendments which your Lordships have been good enough to make. I beg to move.

Amendment moved— Page 12, line 5, leave out ("any licence granted") and insert ("an order shall not be made under this section for the indorsement of a patent").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

The same remark applies to this Amendment. It is consequential upon previous Amendments. I beg to move.

Amendment moved— Page 12, line 7, after ("supplied") insert ("and any licence granted under this section on that ground").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

The reason for the next Amendment is, that under paragraph (c) of subsection (3) of Clause 15, an applicant who applies on the ground that he is prevented or hindered from using his own patent by the failure of the patentee of the patent under which a licence is sought to grant him a licence under the patent on reasonable terms, must be able and willing to give the other patentee a licence under his own patent on reasonable terms. In others words, this is attempting reciprocity, and I think you will agree that this right to a licence should be available to the licensees of the patentee of the other patent as well as to the patentee. Therefore I beg to move.

Amendment moved— Page 12, line 17, after ("patentee") insert ("and his licensees").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This Amendment is consequential upon the Amendment to Clause 15 (2). I beg to move.

Amendment moved— Page 12, line 19, leave out subsection (4).—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Clause 15, as amended, agreed to.

Clause 16:

Provisions as to licences under Section 15

(4) Paragraph (d) of subsection (1) of section twenty-four of the principal Act shall apply to any licence (other than an exclusive licence) granted in pursuance of an order under the last foregoing section as it applies to a licence granted by virtue of the said section twenty-four.

LORD LUCAS OF CHILWORTH moved, in subsection (3) to leave out "an exclusive" and insert "a." The noble Lord said: The Amendment at line 7 and the one at line 11 are really drafting Amendments, to avoid using the words "exclusive licence" and at the same time to avoid possible confusion with these words where used elsewhere in the Bill. The Amendments are really consequential on, and made for similar reasons to, a previous Amendment I have moved. With that explanation I hope you will accept them. I beg to move.

Amendment moved— Page 13, line 7, leave out ("an exclusive") and insert ("a").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Amendment moved— Page 13, line 11, at end insert ("or to grant licences under the patent").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH moved, in subsection (4) to leave out "(other than an exclusive licence)." The noble Lord said: Section 24 (1) (d) of the Act enables a licensee under a patent indorsed "licences of right" to call upon the patentee to institute infringement proceedings for infringement of the patent, and, if the latter does not do so within two months, the licensee may himself institute proceedings. Subsection (4) of this clause makes this provision equally applicable where the comptroller has granted a compulsory licence under Clause 15, except where such licence is exclusive. This exception was thought right in view of the provisions of Clause 34 which will entitle an exclusive licensee to take infringement proceedings. There may be cases, however, where an exclusive licensee from the comptroller could not avail himself of Clause 34, the reason being that his licence would not fall within the terms of subsection (3) of Clause 34. It is accordingly proposed, although I admit there is some slight overlap here, to make the position clear by cancelling the exception in parenthesis in Clause 16 (4), thus making the subsection applicable to all licences from the comptroller. I beg to move.

Amendment moved— Page 13, line 15, leave out from ("licence") to ("granted") in line 16.—(Lord Lucas of Chillvorth.)

On Question, Amendment agreed to.

Clause 16, as amended, agreed to.

Clause 17:

Exercise of powers on applications under s. 15

17.—(1) The powers of the comptroller upon an application under section fifteen of this Act shall be exercised with a view to securing the following general purposes, that is to say:— (a) that inventions which can be worked on a commercial scale in the United Kingdom shall be worked therein without undue delay and to the fullest possible extent;

(2) Subject to the foregoing subsection, the comptroller shall, in determining whether to make an order in pursuance of any such application, take account of the following matters, that is to say:— (a) the measures already taken by the patentee or any licensee to make full use of the invention;

VISCOUNT SIMON

had given Notice of an Amendment to subsection (1) (a), after "Kingdom" to insert "and which should in the public interest be so worked." The noble and learned Viscount said: In view of what has been said earlier, I do not move this Amendment now.

LORD LUCAS OF CHILWORTH

The noble Viscount can, of course, please himself, but if he does not move it we shall move it later on.

VISCOUNT SIMON

Then I beg to move this Amendment, and I do so with some confidence that the Government may accept it.

Amendment moved— Page 13, line 23, after ("Kingdom") insert ("and which should in the public interest be so worked").—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

The noble Viscount's confidence is not misplaced. I accept his Amendment.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This is a drafting Amendment. I beg to move.

Amendment moved— Page 13, line 24, leave out ("possible extent") and insert ("extent that is reasonably practicable").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH moved, in paragraph (a) of subsection (2) at the beginning to insert: the nature of the invention, the time which has elapsed since the sealing of the patent and The noble Lord said: This Amendment which I think is self-explanatory, is put down to meet a criticism made by the noble and learned Viscount. I therefore propose it with some hope that he will accept it.

Amendment moved— Page 13, line 36, at beginning insert the said words.—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Clause 17, as amended, agreed to.

5.8 p.m.

Clause 18:

indorsement of patent on application of Government department.

18.—(1) At any time after the sealing of a patent, any Government department may apply the comptroller for the indorsement of the patent with the words "licences of right" upon any one or more of the grounds specified in section fifteen of this Act; and the comptroller may, if satisfied that any of those grounds are established, order the patent to be indorsed accordingly.

VISCOUNT SWINTON moved to omit subsection (1). The noble Viscount said: I am in a slightly difficult position here. I think I had better move the Amendment which stands in my name, although the main discussion will, no doubt, come upon Lord Lucas's Amendment. As your Lordships see, I have a modest Amendment in the first instance—namely, to strike out subsection (1). Lord Lucas has an Amendment to strike out the whole clause. If Lord Lucas's activities stopped there, I should think them very useful and helpful; but he goes on to propose the insertion in place of Clause 18 of nearly as odd a clause, upon which we shall have a good deal to say. I could have been completely silent here except for the fact that, while Lord Lucas strikes out subsection (1) with one hand, he restores it in a somewhat modified form in subsection (1) of his substituted Clause 18. Therefore, I think I had better say a word about subsection (1). Whether we have it in its original form or in the form which Lord Lucas proposes to substitute, it gives to a Government Department an entirely new power, which they have not got at present, to request the comptroller to indorse a patent "licences of right." But we have made an important Amendment, with respect to both the general power and on the time limit. The time limit of three years has been restored; therefore—and I speak subject to correction on this point—even if we were to pass Clause 18, either as it stands in the Bill or in the form of Lord Lucas's amended draft which appears in the Marshalled List, there would be no power to do anything within the period of grace of three years.

LORD LUCAS OF CHILWORTH

May I intervene to help the noble Viscount? When we get to my Amendment, I am going to ask leave of the Committee to introduce a Manuscript Amendment to my Amendment to cover exactly the point which the noble Viscount has just raised. Now that we have accepted the noble Viscount's previous Amendment for a delaying period of three years, it must ipso facto go into subsection (1) of the proposed new clause which I have put down here.

VISCOUNT SWINTON

I thank the noble Lord. That relieves me of any argument on that point. But we are still left with the question of the new power of a Government Department to make application to the comptroller to indorse a patent "licences of right" after the expiry of a period of grace of three years. That would be the position. Here, again, I would appeal to the Government, whose representatives have followed my argument on Clause 15—it was not indeed my argument but that of the Swan Committee. Here, again, I think I am right in saying that we have a considered finding of the Swan Committee. They recommended that there should not be this power which the Government are now seeking to introduce. They were against the Government having the right to apply for an indorsement of this kind, because they thought it would weaken the efficiency of the patent system in stimulating research and in having patents developed.

LORD LUCAS OF CHILWORTH

Would the noble Viscount give me the reference? Is the noble Viscount referring to the Swan Committee's comment about universal adoption of the system of "licences of right"?

VISCOUNT MAUGHAM

At what paragraph do we find that?

LORD LUCAS OF CHILWORTH

I think it is in the final portion of the Swan Committee's Report, at the point where they make general observations about the advisability of universal application of the system of indorsing licensed patents "licences of right."

VISCOUNT SWINTON

I think I can summarise it in this way. The Committee were against this proposal because they thought that such a general power given on the instigation of a Government Department militated against the development of patents. I think I should be putting it rightly if I said that the view of the Swan Committee—and I am bound to say that in my opinion it is right—was that if an invention was not being properly worked, the right course was for application to be made under Clause 15. That application can be made either by an individual or by the Government, or Government Department, if the Government Department want to have worked or to work a patent which they say is not being reasonably worked. I want to strike out subsection (1) because I say it is unnecessary, in that all the power that there ought to be exists, and exists simply under Clause 15, and to give the Government this special power is distinctly contrary to the spirit, and, I think, the letter of the recommendations contained in the Swan Report. I therefore beg to move to strike out subsection (1).

Amendment moved— Page 14, line 1, leave out subsection (1).—(Viscount Viscount Swinton.)

LORD LUCAS OF CHILWORTH

I think it would be for the convenience of the Committee if the whole question which is raised here were discussed on this Amendment. At any rate, I trust that if I deal with it now I shall not fall foul of the noble Earl the Chairman of Committees. It is doubtless quite obvious to the noble Viscount that I must resist this Amendment. I shall have to ask your Lordships to bear with me because this is a matter which requires some detailed explanation. I think I must look back and say that the origin of our trouble with this Bill lay in the fact that when the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, was going through another place all effective references to patents were taken from it under the pressure of the Opposition, and while subsection (5), of Section 10, of that Act does not prohibit the Monopolies Commission from making any comment they like about the restrictive operation of a patent or patent agreement it effectively prevents the appropriate authority from taking any action.

I will refresh your Lordships' memories by reading the relevant section. It is very short. Subsection 5, of Section 10, of the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, states: Nothing in any order of a competent authority under this section shall have effect so as to restrict the restraining of any infringement of a United Kingdom patent or so as to restrict any person as to the conditions which he attaches to a licence to do anything the doing of which, but for the licence, would be an infringement of a United Kingdom patent. The argument which the Opposition in another place raised on this was that the procedure of the Monopolies and Restrictive Practices Act was not appropriate to patents. There existed a machine—an existing Patent Act—it was stated, and it was known that this Bill was coming forward. Therefore, although the Monopolies Commission can make any Report they like about restrictive practices in connection with patents, or patent agreements, it is left to this Bill, when it becomes an Act, to impose sanctions.

I now revert for one moment to Clause 15, which we have just discussed. Under subsection (1), a Government Department can apply for a licence or for the endorsement of a licence if they intend to work it. If they do not intend to work it, and apply only for the protection of the public right, the Department have to apply under Clause 18. That is the difference between the two.

VISCOUNT SIMON

I do not follow that.

LORD LUCAS OF CHILWORTH

If the noble and learned Viscount will bear with me, I will answer that question afterwards.

VISCOUNT SIMON

It is not an easy subject.

LORD LUCAS OF CHILWORTH

It is just as difficult for me as it is for the noble and learned Viscount. The substance of the new clause in my Amendment is that a Government Department which is not an interested party may apply—and I stress this—only if they can satisfy the conditions of Clause 15 (2). The essential difference between Clauses 15 (1) and 18 (1) is that in the first a Government Department can apply for a licence to operate under a patent or for the indorsement of a patent "licences of right" where the intention is to become technically an interested party and to operate themselves. In that regard it has to make good in substance the conditions imposed in Clause 15 (2). Under Clause 18 (1) the Department can do three things without having any other interest than the public interest. They can apply to the comptroller for the indorsement of a patent "licences of right," for the granting of a licence to a third party, and—and this is the most important perhaps—for the alteration or modification or cancellation of any restrictive clause of a patent agreement so long as that has been reported upon by the Monopolies Commission. Again, under Clause 18 (1), the Department can make an application only if they satisfy all the requirements of Clause 15 (2).

If noble Lords will read carefully the Amendment, they will see what concessions the Government have made to the criticisms made by the noble and learned Viscount, Lord Simon, on Second Reading. They have jettisoned practically the whole of the original clause. I maintain that this is necessary. Parliament has decided that there shall be a Monopolies Commission to inquire into restrictive practices. In its wisdom or unwisdom (and I am not going to say which) Parliament took out of the Monopolies Act all sanctions or penalties imposed in relation to patents or patent agreements, and relied in this regard upon this Bill. The Government must have this power, which is now limited much more than was proposed in the original draft, because we shall not be able to do anything at all with sanctions under the Monopolies Act. Again, may I impress upon the House that the conditions in Clauses 15 (3) and 15 (6), and the conditions in Clauses 16, and 17, apply to any applications by a Government Department under Clause 18. They must meet all the conditions. Thus, all Clause 18 does is to enable a Government Department to do something which they cannot do under Clause 15 because they are not an interested party. I hope that after due consideration your Lordships will accept my Amendment and that the noble Viscount, Lord Swinton, will withdraw his.

On the point raised by the noble Viscount, Lord Swinton, I may say that the Swan Committee considered whether it was in the public interest that all patents should be indorsed "licences of right." The Committee rejected that and the Government reject it. We agree with the noble Viscount, Lord Swinton, and I can assure him that my proposed new, clause does not reintroduce this, because licences of right under Clauses 15 (1) and 18 (1) are subject to the restrictions to which I have referred. To take an example, subsection (2) of the new clause provides that an application to have an agreement cancelled or modified can be made only if the Monopolies Commission have said so. That is not a directive to the comptroller. On any application the comptroller may take into consideration everything that he is empowered to, and obliged to, under Cause 15 (3) and (6) and Clauses 16 and 17. In the last analysis the comptroller may say: "Although you apply, and I do not query what you say; though you have prayed in aid, and possibly based your application upon, the report of the Monopolies Commission, I do not think this is the appropriate remedy. Therefore, I suggest that the remedy is found in another direction."

VISCOUNT MAUGHAM

Will the noble Lord explain something to me in which I have no doubt I am stupid? At the moment I cannot quite see the concrete case which I am trying to visualise, of a patent being used in an improper way, or in a way to which the Government at the time object. I cannot see what particular case it is which is not open to be attacked under Clause 15 of the Bill. What are the Government afraid of?

LORD LUCAS OF CHILWORTH

Under Clause 15 (2) a Government Department can make an application for two things. They can make application for a licence or for an indorsement of a licence. They have got to be an interested party to do either one or the other. They cannot apply under Clause 15 for the alteration of an agreement. There is one proviso which perhaps I should mention. The only person who can apply for the alteration of an agreement is an existing licensee, who can apply under Clause 16; a Government Department can apply under Clause 15 only if they intend to operate the patent themselves.

VISCOUNT MAUGHAM

I hesitate to interrupt the noble Lord again, but I only want to reply to what I thought was the answer to this. I thought I followed what the noble Lord was saying. The answer is that Clause 15 (1) ought to be amended substantially in the way suggested by my noble and learned friend Lord Simon, by putting after "any person interested" the words "or any Government Department." If that were done, I still cannot see the practical danger that we are being asked to provide against by Clause 18.

LORD LUCAS OF CHILWORTH

If the noble and learned Viscount will now allow me to continue, I think I can get to it. I had not quite finished when he interrupted me. There may be conditions where the Government may want to take action, following a report of a Monopolies Commission, that would not fall under anything in Clause 15. As this Bill tightens the position, there may be restrictive practices brought into patent agreements. May I cite a hypothetical case?

VISCOUNT MAUGHAM

That is what we want, I think.

LORD LUCAS OF CHILWORTH

I will do my best. It may well be that the Government, following a report of a Monopolies Commission, may say that all price maintenance agreements are illegal. But it may be put into a patent that it will be a condition of the grant of a licence, if the licensee agrees, that the article he manufactures will be sold only at a price previously agreed by a trade association. If the Monopolies Commission investigating such a case came to the conclusion that such a clause in a patent agreement was against the public interest, and was restrictive under the Monopolies and Restrictive Practices (Inquiry and Control) Act, no action could be taken, because it affects a patent, owing to Section 10 (5). That is one of the reasons for subsection (2) of Clause 18.

I am advised that it is necessary to have this Clause 18 to differentiate between where a Government Department are an interested party, and intend to operate the patent, and where they act under a Monopolies Commission recommendation as the custodians of the public interest. The noble and learned Viscount quoted Mr. Kenneth Swan. I would like to direct your Lordships' attention to paragraph 5 of the Second Interim Report, where the Swan Committee support the Government on Clause 18. They there say: It is easy to overestimate the part played by patents in creating and maintaining cartels, whether national or international. Several of the most important monopolies in this country exist with little or no help from patents, and it seems likely that, even where patents do form an important element in cartel arrangements, these arrangements could be reconstituted upon some other basis, even if patents were totally abolished. Where firms find it convenient and profitable to work together in regulating output and fixing prices, or where one or a few powerful firms desire to dominate smaller rivals, they will make use of whatever means come to hand to cement their agreements. Patents are often an available means, but they are not the only one. No conceivable reform of the patent system, nor even its total abolition, would, by itself, solve the problem of monopoly in modern industry. Nevertheless, it is sufficiently clear that patents do often play a part in the formation and maintenance of cartels, and that this use of patents is foreign, and may be inimical to, the purposes for which the patent system was instituted. It is not within our sphere to pronounce upon the merits and defects of cartels as such, but we are of opinion that it is wrong in principle that a patent should be used to establish a monopoly wider in scope and longer in duration than that conferred by a patent in itself, and it is obviously desirable that the patent law should keep in step with any measures which may be adopted in the future to limit or control monopoly in the public interest. That is why it is necessary for us to have this new clause. I trust that I have explained the matter fully and satisfactorily to your Lordships. I hope the noble Viscount, Lord Swinton, will withdraw his Amendment, and that when I come to move the Amendment I have down the Committee will accept it.

THE LORD CHANCELLOR (VISCOUNT JOWITT)

May I add one word in answer to the point raised by the noble and learned Viscount, Lord Maugham? I think it will help to clear the position. If the words which the noble and learned Viscount, Lord Simon, had proposed at Clause 15, line 2, had been "or any Government Department," then Clause 18, except that part which deals with the Monopolies Commission, would be unnecessary. But the words he proposed were not, "or any Government Department," but "including any Government Department." Therefore he is dealing only with a Government Department which is, in the technical sense of the word, an interested party. I thought it might be convenient to point that out, because I think it is the answer to the point that Lord Maugham made.

VISCOUNT MAUGHAM

I am obliged.

VISCOUNT SIMON

I am glad the Lord Chancellor made that observation. The same point had occurred to me. We can, of course, review the exact words of Clause 15, and, if right, we can put in the words, "or any Government Department." I agree that that would clear up that matter. I am grateful to the noble Lord, Lord Lucas, for the pains which he has taken to explain what is now proposed to take the place of the present Clause 18. After all, what we have to do is to consider whether his new Amendment is one which should be adopted. I will not spend time arguing whether my noble friend Lord Swinton is right or not in moving to leave out subsection (1), because the noble Lord, Lord Lucas, is moving to leave out the whole of Clause 18. Therefore, I take it that it is common ground that subsection (1) will disappear.

I will address myself briefly to the new proposal in the name of the noble Lord opposite, which refers to the Monopolies and Restrictive Practices Commission. I think the issue is capable of being stated in fairly simple terms. May I first remind the Committee of one feature of the Monopolies and Restrictive Practices (Inquiry and Control) Act of last year which has not been mentioned at all? I quite agree that its application to patents was restricted, but so far as the Monopolies and Restrictive Practices (Inquiry and Control) Act has an operation, it is of this kind: it enables the competent authorities in certain cases to make an order, but it goes on to say in subsection (7) of Section 10: The power to make orders under this section shall be exercisable by statutory instrument, and no order shall be made under this section unless a draft thereof has been laid before each House of Parliament and approved by resolution of each House. In other words, the Act of last year, while no doubt it provided very useful powers in Government Departments to draw up various forms of order in the light of a report of the Monopolies Commission, gave no power at all to affect anybody's rights unless it were by an order the draft of which had been laid before each House of Parliament and approved by Resolution in each House. That is the condition which the Act thought it right to lay down.

When I look at the proposed new Clause 18, I do not find anything about that at all. The clause is so drawn as to have operation without either House of Parliament having anything to do with it at all. The conditions, and the only conditions, laid down, as the Committee will see, are these: first, there must have been a report by the Monopolies Commission in which a patent has been referred to. If a report from the Monopolies Commission refers to a patent, that is all that is required under that head. The next thing is that the report must allege that condition; in licences granted by the patentee operate or may be expected to operate against the public interest. If those two conditions are satisfied, then, according to the Government's new clause, a Government Department may, basing itself on those two facts and no others, apply to the comptroller and, if this clause is adopted, the comptroller will be authorised to say: "Very well, you having applied I am prepared to endorse the patent 'licences of right.'" Now it must be perfectly obvious to everybody who has followed this matter, that that simply means by-passing Parliament altogether and rejecting the original scheme—which was contained in the Monopolies Act of last year and which, as I have pointed out, required a Resolution of both Houses of Parliament—and saying: "No; it is enough that we can get from the Monopolies Commission a report which refers to a patent, if the report takes the view that it will operate against the public interest." I am just as much alive as anybody to the desirability of preventing an improperly restrictive practice. I am not arguing in favour of any improper practice being employed by anybody because of a monopoly. I am examining the Government's own clause, and I am saying that it will not work and ought not to be adopted. I do not know whether everybody has quite appreciated that the Monopolies Commission do not sit as a Royal Commission sits, on appointed days in an appointed room and have before them one witness after another, examined and cross-examined.

LORD LUCAS OF CHILWORTH

If the noble Viscount will forgive me, he is now embarking upon a discussion of Clause 21 of this Bill, to which there is an Amendment upon the Marshalled List to do just what he is saying.

VISCOUNT SIMON

I think that what I am saying is relevant. The clause I am discussing refers to a report of the Monopolies Commission, and I am observing that a report of the Monopolies Commission is not a report which is drawn up on testimony given by witness after witness before the members of the Commission. It is the result—and quite properly—of what I may call a roving inquiry. It usually involves the issue of a questionnaire to a particular trade and the collection of evidence. It is perfectly proper for the Commission to use any statistics they come across which they think are trustworthy. I cannot agree that, because the Commission, so constituted, make a report, it follows that what the report contains should be the basis of special action to be taken by a Government Department in order to get an indorsement of this sort on a licence or the grant of a licence to an individual. The machine does not appear to me to work, and consequently, though I quite appreciate the anxiety of the noble Lord and others to find a clause which will do what is wanted, it does not seem to me that this form of clause could be justified at all.

Because a Government Department have a report of the Monopolies Commission, which is not based upon any judicial inquiry, or an inquiry of the nature of a judicial inquiry—although, no doubt, the Commission includes the most estimable people—which mentions a patent and says that in the Commission's opinion there are conditions in licences granted which operate against the public interest, why should that be taken as giving special jurisdiction to that Government Department to apply to the comptroller? That is the question I am asking, and I point out that hitherto nothing could be done based upon a report of the Monopolies Commission unless it was done by an order which was approved by Resolution of both Houses of Parliament. An entirely new method is being adopted for using the report—no doubt very carefully arrived at by the Monopolies Commission. I should not have thought that this was a satisfactory way of dealing with the difficulty, although I am glad, of course, that the Government are abandoning their original clause. I made some observations on the Second Reading which did not seem to me capable of being resisted and so it has turned out. The question is: Have you a satisfactory scheme in what you are proposing now? You say: "Show me the report of the Monopolies Commission which refers to the fact, show me that it contains a recommendation as to how the conditions in the licence granted to the patentee may be expected to operate. Show me those two things and that is enough." Is there anything else?

LORD LUCAS OF CHILWORTH

Yes—quite a lot. All the conditions of Clause 15 (2) have to be satisfied at the same time. May I draw the noble and learned Viscount's attention in this connection to subsection (1) of my proposed new clause, which reads: Without prejudice to the provisions of section fifteen of this Act, any Government department may, at any time after the sealing of the patent, apply to the comptroller upon any one or more of the grounds specified in subsection (2) of that section.… No application under Clause 18 (1) can be made to the comptroller unless it satisfies the conditions set out in Clause 15 (2). That is the material difference, and that is the safeguard.

VISCOUNT SIMON

I thank the noble Lord for what he says, but there is evidently a misunderstanding. I was talking about a report of the Monopolies Commission. I was not aware that that part of the Government Amendment to which I have just been referred had anything whatever to do with the Monopolies Commission.

LORD LUCAS OF CHILWORTH

Yes; all of it.

VISCOUNT SIMON

I am sorry, but I am afraid that I am unable to understand it. The new clause says: Without prejudice to the provisions of section fifteen of this Act, any Government department may, at any time after the sealing of the patent … and so on. So far, there does not appear to be anything—

LORD LUCAS OF CHILWORTH

There seems to be a conflict in the matter of drafting. I am informed that the noble and learned Viscount should read the first line of subsection (2) of the proposed new Clause 18, which is worded as follows: Where an application is made under this section in respect of a patent. … That implies that all applications under this clause have to be made in accordance with the provisions of subsection (2) of Clause 15.

VISCOUNT SIMON

I am very much obliged to the noble Lord, and I fully understand what he says. But it does not really touch the point I was making. The noble Lord says that the provisions of subsection (2) of Clause 15 apply; but the question is not that. It is: What are the circumstances in which a Government Department are to be given the special right, which nobody else is to have, of applying to the comptroller because they find that the Monopolies Commission has made a certain report? I do not see why a Government. Department should have that special right when they are relying upon the report of the Monopolies Commission, which has never had any sort of Parliamentary approval at all. The Monopolies Commission may simply make a report; or may make a report which is approved by Resolution of the House of Commons. I can understand the argument that if the second condition is to work these powers should be given. But what I do not understand is how it can be justifiable to say that, if the Monopolies Commission make a report, honestly but without any of the ordinary machinery which a court of justice has at its disposal for ascertaining facts, even though the House of Commons may afterwards disapprove of the report, there is none the less the right to take this special proceeding because the matter belongs to the Department of the comptroller. That is my difficulty, and I think it is right to express it frankly.

THE LORD CHANCELLOR

Perhaps I may take some little part in this controversy. I have sat very silent because I have been so impressed by the way in which the noble Lord, Lord Lucas, has mastered and handled this complicated subject, and I am afraid that by butting in I may spoil some of his good work. Notwithstanding that, I think there is an element of confusion which needs to be cleared up. The proposal under Clause 15 is that a Government Department which may be an interested party shall be able to apply to the comptroller for indorsement of a patent with the words "licences of right," or for a licence to manufacture to be given to them. But Clause 15 as at present drafted does not apply to a Government Department which is not an interested party. We can see that there may be cases in which a Government Department, even though not an interested party and not itself intending to manufacture or exploit, yet should be able to go to the comptroller and make application for an endorsement of "licences of right."

After all, this is an unfamiliar rôle for your Lordships. I do not know whether you think that manufacture by a Government Department is necessarily cheaper or more efficient than manufacture by an individual. It may be thought that it is in the public interest that a patent should be exploited which is not being properly exploited. Or it may be thought that exploitation should not be by the Government Department but by someone else. Here I am not quite sure about what the noble Lord, Lord Lucas, suggested. I think it is desirable that we should all have an opportunity of considering the new Clause 18, because there is great confusion. Although the clause embraces monopoly cases it extends to other cases. I read Clause 18 (1) as meaning that application can be made under this, not only in a case where the Monopolies Commission have pronounced on the matter but in any event, whether they have pronounced or not. Lord Lucas was right in saying that it is obvious that when you come to subsection (2), where the subject matter with which you are dealing is known, and where there has been a report by the Monopolies Commission, the attributes and conditions of Clause 15 and the rest apply.

I turn now to this monopoly question and the Monopolies Commission. When this body was set up we had grave doubts (there is no secret about this; it started in the days of the Coalition Government) as to what sanctions we were to have, and how we were to see that the sanctions were fairly provided for. And what we finally decided, rightly or wrongly, was to have what I may call the Parliamentary sanction. The Monopolies Commission make their report and, if the Minister desires to act on that report, he promulgates an order; then, if the order is agreed affirmatively by both Houses of Parliament, the sanction can be imposed. I was never satisfied or clear in my mind as to whether that was very wise, because it would be very difficult for Parliament to address itself to a detailed consideration of that matter. The alternative view, which some of us always preferred, was to have some kind of a judicial proceeding. What we propose in this case is the judicial avenue.

If the Monopolies Commission have reported, instead of having the Parliamentary method of the sanction which follows from that, we propose to have the judicial avenue. You then go and apply to the comptroller who, of course, is perfectly entitled to grant or not to grant, as in his discretion he thinks right, the relief for which you are asking. From the comptroller you can appeal to the Patent Tribunal which, in practice, if this Bill goes through, will be a judge appointed to deal inter alia with matters of this sort. If the comptroller, or the Tribunal (if the matter goes to the Tribunal) think it right and proper and that the circumstances are made out, then they can grant the relief. I agree that that is quite a different method of approach from the Parliamentary method of approach, but it may be that it is a more appropriate method of approach, because the comptroller or the Tribunal will be able to give a more detailed and more exact consideration to the matter than would probably be open to Parliament. Therefore, it may be that the matter would be better dealt with in that way.

VISCOUNT SIMON

I do not intervene in any way to reply to the point. I appreciate the contrast which the noble and learned Viscount makes. Nobody doubts that the comptroller will endeavour to discharge his duties impartially. But can one describe an application made by a Government Department, based on something contained in the Monopolies Commission report to the comptroller, as an application to the comptroller in his judicial character? Surely, he hears no evidence; he does not know the value that should be attached to what is put before him. He has merely to look at this report.

THE LORD CHANCELLOR

That applies to the Parliamentary sanction, just as it does to the other. When we come to Clause 21, we are going to have a discussion as to what extent the findings of the Monopolies Commission ought to be conclusive or merely prima facie, or on what conditions they should be either one or the other. I do not want to anticipate the discussion which will take place on Clause 21, except to say this: that I am frankly anxious to avoid a case which has been decided by the Monopolies Commission being argued all over again. I think it right to say this. No regard should be paid to the findings of the Monopolies Commission, as either prima facie or conclusive, unless certain points are observed—for instance whether the evidence was given on oath. Without committing myself, I suggest that there might be the opportunity of cross-examination, of giving evidence, or that sort of thing. Noble Lords will find that I shall be quite amenable upon that matter when we come to consider Clause 21, because I realise the difficulties here involved.

What I should like to make plain is this. Always assuming that you have findings which are subject to some of the kinds of conditions I have mentioned, the proposal is, that a Government Department can go to the comptroller in his judicial capacity. Most certainly if you appeal from the comptroller to the special Tribunal, you then have the Tribunal in their judicial capacity, because they have no other. They will decide the case as they think best. Let us bear this in mind. This Clause 18 means only that you can apply under Clause 15, and a condition of a successful application under Clause 15 is that you have to establish affirmatively the existence of one of the grounds of relief which are set out in Clause 15. That is the position, as I understand it.

I think it is interesting to bear in mind this point which makes it plain. As I said before, if we had the words "or any Government Department," then we should want Clause 18, or something like Clause 18, for two purposes—and two purposes only. The first would be that we should have to have power to ask for a licence to be granted to a nominee of the Department; secondly, we should want power to modify conditions in consequence of a report of the Monopolies Commission—conditions contained in a licence. We should want power to do that, always assuming that the proper stipulations were observed as to the way in which the Monopolies Commission had pronounced in taking evidence and that sort of thing. I suggest this to the noble Viscount, because this is not a matter on which there should be any Party difference: we all want to do the right thing, and get this clear. If you will let us have this clause at this stage, with the Amendment which has been indicated about the three years, it would be useful to look at the matter again as a whole when we come to Clause 21. Then, when we reach Clause 21, we shall really see the picture as a whole, and we will then consider what stipulations we should put in as to the conditions under which the Monopolies Commission's findings are either conclusive or prima facie evidence. If we have this clause and look at it in print, we shall be able to consider it, we shall ask our advisers what they think about it and we shall be able to ascertain the views of those experienced people who took part on the Swan Committee as to how far this clause meets their apprehensions. Therefore, I would ask your Lordships to let us have this clause now, because I am anxious to have this clause available when we come to consider Clause 21.

VISCOUNT SWINTON

I agree that this is not a Party matter. On the other hand, it does seem to me to be a most important one. The difficulty I feel about agreeing to the Lord Chancellor's suggestion—and I have listened to the whole of this debate as impartially as I can—is that it is all wrong to have Clause 18 at all. I will explain why. I am a little embarrassed at discussing Clause 18 without considering Cause 21. I will say this at once, if I am asked to give Clause 18 as paving the way for Clause 21: that I regard Clause 21 as an impossible clause. I think it fair to say that now. As the noble and learned Viscount the Lord Chancellor has said, I think that Clause 21 would lead us to a right decision about what we should do with Clause 18. What Clause 21 proposes to do is to say that in certain cases a finding by the Monopolies Commission, which is not a judicial body at all, is to be accepted as conclusive evidence. That seems to me to be an impossible basis on which to found any clause—either Clause 18 or Clause 21—and for this reason: that this is a Commission with a roving inquiry; it is directing its mind to very broad considerations, as to whether some great firm or combination of firms which carries more than one-third of the business of the country or of a particular part the country, is engaged in restrictive practices which are contrary to public interest.

The first thing that a tribunal of that kind should do—that is, if it is to do its work well—is to try and get people round the table. Some monopolies are very bad, some are harmless, and some monopolies or quasi-monopolies are extremely good and valuable. The great ding is to find out how it works. Therefore you want people to talk frankly. That is not at all the atmosphere of a law court. The Commission may send out a questionnaire which asks people to come and have a talk; and it may send its members wandering through the country to see how the business is carried out. That is the right way for a monopoly inquiry to conduct its business. But if, out of that and some reference to a patent—and patents are almost sure to come into this inquiry in one way or another—a claim is to be founded, in which the report is to be taken as conclusive and people are to lose their valuable patent rights, then obviously the whole inquiry is going to be conducted at arm's length, everybody will be put on the defensive and an entirely wrong atmosphere will be created.

I therefore think (and I cannot get away from it) that Clause 18 is only in this Bill because of the Monopolies Commission. I consider that the powers the Government should have ought to be defined in Clause 15, and there ought not to be a separate clause here at all. It may well be that when a Government Department is not an interested party it should have the right, in the public interest, where a particular patent is not being worked, to apply for a licence for an individual or indeed for a licence of right, which I gather means a general power to use it. That may be a perfectly tenable proposition, and I thought that was the object Lord Lucas had in submitting his Amendment about licences of right being granted at the instance of a Government Department. But if the suggestion is that a Government Department ought to have the right to apply to the comptroller because one of the mischiefs under Clause 15 is taking place—and it is admitted that Clause 15 has to be satisfied, otherwise, Monopolies Commission or no Monopolies Commission, the Government Department's case falls to the ground—what more is required except to put into Clause 15 words to the effect that a Government Department, on behalf of public interest, may apply? Then, if something has taken place before a Monoplies Tribunal, if some reason has come out there which properly moves the Government Department to do something, they can make that the ground of their application and say, "We are doing this because we have been put on to it by the Monopolies Commission." But of course, they must prove their case.

LORD LUCAS OF CHILWORTH

I interrupt the noble Viscount only the better to follow his argument, because nothing at present in Clause 15 (2) can give anyone—Government Department or anyone else—the right to apply for an alteration of the conditions of an existing agreement. How would he propose to overcome that difficulty? There is no right except the right I have mentioned just now in regard to an existing licensee under Clause 16. But nobody can apply for the alteration of an existing agreement under Clause 15. The Monopolies Commission may report, and that is the instrument which Parliament has decided should apply.

VISCOUNT SWINTON

If there were a case for asking to have a licence varied at the instance of a Government Department, then I would give the power to the Government Department so to apply under Clause 15. But I would certainly say that the Government Department must prove their case. As the Lord Chancellor has said, this is a judicial proceeding. The Monopolies Tribunal is not at all a judicial proceeding. I would say that that may be a good power to give to a Government Department—namely, the power to apply, and then to satisfy by evidence. It may very well be that by reason of the way in which the business was done the Government Department could say to the patentee, "If you do not vary these conditions I shall apply to the judicial tribunal, the comptroller, and if necessary appeal to the judge, for a licence to indorse your patent for licences of right." I should have thought that that was the way it should be done. I agreed with the noble Lord when he cited the Swan Committee as saying that, if the law was changed, then the patent practice ought to come into conformity with the law. I would certainly agree to that. But by setting up a Monopolies Tribunal we have not altered the law; we have not turned the Monopolies Tribunal into a law maker. There can be only one law maker and that is Parliament, and there can be only one judicial authority—namely, the law courts of this country, to which we are all amenable.

We have laid down in the Monopolies Act, that if the Minister brings a matter to Parliament and secures a Resolution of, I think, both Houses of Parliament, approving certain action being taken, then that has the force of law and he can compel the party affected to do what Parliament has authorised. If a Resolution of both Houses of Parliament has laid down that something should be done, it is equivalent to an Act of Parliament, of which the comptroller and the court must take notice. But nothing else is—no mere report of the Tribunal. Therefore, I say that the right thing to do is not to pursue this clause. If we do not pass this clause now, we shall not be precluded from discussing Clause 21, because Clause 21 deals with what attention has to be paid when applications are made under Clauses 15 or 16.

LORD LUCAS OF CHILWORTH

When a report of the Monopoly Committee is prayed in aid.

VISCOUNT SWINTON

in proceedings.

LORD LUCAS OF CHILWORTH

Based on a report.

VISCOUNT SWINTON

Therefore we are not in the least precluded from considering Clause 21, when we come to it. We disliked Clause 18 very much as it stood and should certainly have moved to strike it out. The noble Lord has moved to strike it out entirely. I think we are on an Amendment of mine, which is merely to strike out subsection (1). I should have thought that the best course for the Committee to take would be to strike out Clause 18, and not to insert the proposed new clause. Then when we come to the Report stage we can put down the right Amendments to Clause 15, which is the clause under which the Government Department or anyone else ought to make their applications. That clause gives the Government Department the right which is proposed, and which certainly seems proper, to act in the public interest and to ask for indorsement, and also gives the Government Department the right to go to the comptroller and to the court to ask within Clause 15 (under which everything has to come) that they may have power to include cancellation or modification of conditions in an application. I believe that such a course would be more consistent with the present feeling of the Committee on this point. If that course is not followed, we shall probably have to strike out this clause during the Report stage, and we should, in a sense, preclude ourselves, when we get to the Report stage, if we pass this now, from putting in the right Amendments—as I think they are—to Clause 15.

6.21 p.m.

THE LORD CHANCELLOR

May I be allowed to add just one or two words with a view to clarifying this matter? I should be sorry if we had any quarrel about this, but I think there is a good deal of misapprehension. So far as this clause is concerned, it has nothing whatever to do with evidence or the accepting of evidence by the Monopolies Commission. It is consistent with this clause that when you get to Clause 21 you should strike out the words "conclusive" or "prima fade" and have the whole clause approved again. The proposed new subsection (2) simply defines the classes of case in regard to which you may make application. It reads: Where an application is made under this section in respect of a patent which has been referred to in a report of he Monopolies and Restrictive Practices Corn mission under the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, and according to that report, or any resolution passed by the House of Commons in relation thereto, any conditions in licences granted by the patentee under the patent operate or may be expected to operate against the public interest, the application may consist of or induce an application for the cancellation or modification of any such conditions. The point which I am seeking to make—and which I think has rather been lost sight of—is that that is simply defining classes of cases in which an application may be made. When we come to Clause 21, we consider evidence on which an application is to be based, and in clue course your Lordships can do what you will about that clause. For the moment, we are simply saying that the only case in which you can apply for cancellation or modification of conditions contained in a patent is where that patent has been referred to the Monopolies and Restrictive Practices Commission. That is all we are saying. That is the only point on this subsection, and it dates back to the interjection of the noble and learned Viscount, Lord Maugham, earlier.

Paragraph (b) of the proposed new subsection (1) of Clause 18 is: for the grant to any person specified in the application of a licence under the patent. First you want that. Secondly, in that class of cases where there has been reference to the Monopolies and Restric- tive Practices Commission, you want to have permission to apply for the alteration of the conditions in the patent. I am saying to your Lordships that it would perhaps be well if we spent a little more time considering this matter, and looked at it again. Certainly there seems to be a good deal of obscurity about it. If your Lordships pass this clause now, you will be free when you come to Clause 21 to make excisions. As I have said, it deals with the question of evidence. There is an Amendment in the Marshalled List by the noble Viscount, Lord Simon, to strike out "conclusive" and insert "prima facie." There are also a whole series of Amendments by the Government which will be found at the bottom of page 7 of the Marshalled List and at the top of page 8. Your Lordships can, if you wish, greatly extend the conditions.

But I feel that if you act now and strike out Clause 18 before you have considered Clause 21 there is grave danger of there being a real misapprehension as to what is being done. If you follow out my suggestion, it will not preclude any action which you may desire to take on the Report stage when you see the picture of Clause 18 and Clause 21 together. I do respectfully submit to your Lordships—and I have given this matter a great deal of thought—that it would be a great mistake to act now unless and until we have considered Clause 21. If your Lordships wish to have a little further time to consider this matter—and you may well so desire—I can tell you that it is intended that this debate should shortly be adjourned. We have a certain amount of other Business which I hope will be largely formal. It may, perhaps, if I may suggest it, be desirable that at this stage we should adjourn without voting on this Amendment, and when the matter is considered later it is possible that some of your Lordships may take a rather different view from that which you appear to be taking to-day.

6.26 p.m.

VISCOUNT SIMON

What the noble and learned Viscount the Lord Chancellor has asked us to do has a great appeal for me. Certainly I want to consider this whole matter very closely in the light of what has been said, and I am wondering whether it would not be better that we should adjourn before deciding "Aye" or "No" about this particular proposal.

THE LORD CHANCELLOR

That was what I meant.

VISCOUNT SIMON

I would like to make a concession at once. I fully appreciate what the Lord Chancellor has said about the choice between Parliamentary and judicial sanctions, and I am rather disposed to think that if the necessary provision could be properly framed there is a lot to be said for making this a case for judicial rather than for Parliamentary sanction. I think the noble Lord, Lord Lucas, was right when he said that under the Bill as it stands it would be impossible to get an order which varied the conditions in a licence. I want to show that I accept gratefully anything which is helpful to a better understanding. But what I feel we need to consider a little further is whether the kind of scheme provided for us in Clause 18 might lead to what would be called "judicial" conclusion. My own impression, if I may express it in a sentence, is that it would be necessary, to make the thing judicial, for the Government Department to go before the comptroller with the evidence they needed to prove their case. It is not true that that would mean repeating everything because, of course, the Monopolies Commission are collecting material, just as the police collect a great deal of material before they prosecute. We do not want to have to have it all done over again. We want only to ensure that there is presented to the judicial body conclusions which it is felt can be proved. I think that to adopt the Lord Chancellor's suggestion may be the way, by general agreement, to reach a solution. In the circumstances, I think it would be almost better for us not to vote either way to-day but simply to take time to look at this again. When we have done so I am sure that we shall all meet in an accommodating spirit and doubtless we shall be able to reach a satisfactory solution.

THE LORD CHANCELLOR

My suggestion was that we should break off now without taking a vote. With regard to the activities of the Monopolies and Restrictive Practices Commission, I would point out that Clause 18 is not affected by this question of not paying any regard to the findings of the Commission and starting a matter all over again to obtain findings by this judicial tribunal. That does not affect Clause 18 which deals merely with the class of cases in which application can be made.

VISCOUNT SWINTON

I think that to put this matter in order, I had better withdraw my Amendment now, and we can decide what to do about Clause 18 on the next occasion. I beg leave to withdraw my Amendment.

LORD LUCAS OF CHILWORTH

Before the House resumes, may I say that I hope the noble Viscount will take into account in any consideration he gives to this new Clause 18 his Amendment putting in a three years' period?

VISCOUNT SWINTON

I appreciate that.

Amendment, by leave, withdrawn.

House resumed.