PATENTS AND DESIGNS BILL [H.L.]

HL Deb 16 May 1949 vol 162 cc651-719

3.5 p.m.

House again in Committee (according to Order).

[The EARL OF DROGHEDA in the Chair]

Clause 18 [Indorsement of patent on application of Government Department]:

LORD LUCAS OF CHILWORTHhad on the Order Paper an Amendment to leave out Clause 18 and to insert as a new Clause: 18—(1) 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—

1. (a) for the indorsement of the patent with the words 'licences of right';
2. (b) for the grant to any person specified in the application of a licence under the patent.

(2) Where an application is made under this section in respect of a patent which has been referred to in a report of the Monopolies and Restrictive Practices Commission 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 include an application for the cancellation or modification of any such conditions. (3) Subsections (3) and (6) of the said section fifteen, and sections sixteen and seventeen of this Act, shall apply in relation to an application and an order under this section as they apply in relation to an application and an order under the said section fifteen.

The noble Lord said: We broke off on Tuesday last at the point where the noble Viscount, Lord Swinton, withdrew his Amendment to delete subsection (1) of Clause 18, the better to allow us to consider the vital points which were raised by noble Lords opposite and to which we on this side wanted to give consideration. To permit of that being done I do not propose to move the Amendment which stands in my name on the Order Paper, because I do not think there is any principle upon which we differ. When he addressed your Lordships on this matter Lord Swinton said (I quote from Column 487 of the OFFICIAL REPORT): 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 …

Then, in answer to a question which I interposed, the noble Viscount went on: 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 …

That is the substance of what we require. Therefore, if your Lordships are agreeable, I will not move this Amendment, thus allowing Clause 18 as printed in the Bill to stand, on the understanding that at the next stage of the Bill, after we have had time to consider all the arguments, I will consult with the noble and learned Viscount, Lord Simon, and the noble Viscount, Lord Swinton, with the object of putting down on the Report stage an Amendment which I hope will meet with the wishes of both sides.

VISCOUNT SIMON

I think that what has been suggested is the better course, and I am glad that the noble Lord has proposed it. I think that what he proposes must go a little further in the way of allowing matters to stand as printed in the Bill, because Clause 21 is inevitably connected with Clause 18.

LORD LUCAS OF CHILWORTH

Will the noble Viscount forgive me for interrupting? I was proposing to take a similar course when we come to Clause 21.

VISCOUNT SIMON

I thought that probably that was so, but it is better that we should understand on what conditions Clause 18 is to be left as it is now. I regard Clauses 18 and 21 as connected, and I am sure everybody does. The situation is really this. As the Bill was introduced, and as it stood on Second Reading, neither Clause 18 nor Clause 21 was satisfactory. That is admitted, because since the Committee stage the Government have put down very substantial Amendments to both Clause 18 and Clause 21. It must be quite clear, of course—and I am sure the noble Lord, Lord Lucas, will not mind my saying so—that, in agreeing to the course he proposes, we on this side are far from satisfied with the arrangements laid down in the revised and amended Clause 18 or the revised and amended Clause 21. I am sure that the difficulties which will have to be considered later are appreciated on both sides; but, as a little help towards the discussion which certainly ought to take place between now and Report stage, venture to repeat two things that said on the last occasion. The noble and learned Viscount, the Lord Chancellor, pointed out that we had to choose between what he called "the Parliamentary sanction "and the" judicial sanction." I think he himself—speaking, no doubt for the whole Government—was disposed in this connection to prefer recourse to the judicial sanction. And having thought the matter over further, I believe that to be the preferable course.

But if the Government are going to adopt that method, the sanction must be really of a judicial character. The nature of the process must be judicial, though I do not suggest that it need necessarily be imposed by one of the High Court judges. I do not believe that it will be easy to clothe the Monopolies Commission with the character of a judicial proceeding; the Commission are really engaged in an investigation of another kind. I therefore made my suggestion, which I will not repeat publicly now, though I have indicated it to the Lord Chancellor and to Lord Lucas. I think that it may be possible to confer this additional jurisdiction on the comptroller, and to do this in a way which does not ignore anything that the Monopolies Commission Report may have said. I do not believe that you can confer upon the Report of that body anything in the character of a judgment which has a binding conclusion. Although I put the Amendment down myself, I must say that I do not see that it would greatly assist the matter to substitute "prima facie" for "conclusion" because, if you once lay down that what the Commission say is prima facie to be accepted, you leave open the door for any amount of evidence to overthrow that presumption. Therefore at present I do not feel that, either in the original form of the clause or in the suggested amended form, we have found the right solution to this matter. I think it will be much better not to argue about it now, when perhaps we have not had sufficient time to consult one another. I fully agree that the better course is to leave these two clauses, Clauses 18 and 21 as they are, it being clearly understood that they are not accepted but are left there merely for the purpose of giving us a fuller opportunity of consulting together in a practical and friendly way between now and Report stage. I hope we shall take an early opportunity of putting our minds together on this difficult subject, because is of extreme importance. I am sure that on reflection we ought to be able to arrive at an agreed conclusion. I hope so. I agree that at this stage Clause 18 should be left as it stands in the Bill.

VISCOUNT MAUGHAM

With the permission of the Committee, I should like to add an observation on one point which has not yet been mentioned and in regard to which I speak only for myself, because I have not had an opportunity of consulting noble Lords on this side of the House who are concerned in this matter. What impresses me a good deal is this. In the first place, Clause 21, subsection (6), it seems to me, raises the only matter really in dispute here. On careful consideration of what form Clause 21, subsection (6), should take, I have been much concerned with the terms of Section 8 of the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, which one is rather apt to forget. Section 8 provides: The procedure of the Commission in carrying out any investigation where a matter has been referred to them under the preceding provisions of this Act for investigation and report shall be such as the Commission may determine,"— so it is entirely left to them— and in particular the Commission shall have power to determine the extent, if any, to which persons interested or claiming to be interested … are allowed to be present or to be heard, either by themselves or by their representatives, or to cross-examine witnesses or otherwise take part in the investigation of the Commission, and the extent, if any, to which the sittings of the Commission are held in public. That is the widest possible power and discretion given to the Commission in the matter. When the Bill was before the House, I was persuaded that it was a matter on which such powers ought to be given, because a good deal of the proceedings before them would necessarily be of a secret character.

When we come to Clause 21, subsection (6), I observe that there is an attempt to tell us what is to happen in any proceedings on an application made in relation to a patent under Sections 15 to 20. Subsection (6) says that … any statement with respect to the making, using, exercising or vending of the patented invention … contained in a Report … shall be conclusive evidence … I have found myself unable to say how, in a short subsection of this kind, we should define the way in which the comptroller is to deal with the case of a Report which comes before him under subsection (6) without leaving out anything important and without saying something which may perhaps go too far. And I am convinced that the only way to deal with this difficulty is by an Amendment to subsection (6). I should like the Government to consider whether such Amendment is not necessary and whether the better plan would not be to substitute for the present subsection (6) a provision that these proceedings shall take place according to rules to be laid down by the Board of Trade. We do that in many other matters that are just as important as this. A good many things would have to be considered by those who frame the rules, and I think that might lead to something better than anything which any of us can suggest at the present time, or even between now and Report stage.

Before I conclude my remarks on this matter, may I point out that in the attempts which various noble Lords have made to frame an effective rule one suggestion made is that every statement made must be proved on oath? I think that would be going a great deal too far. I think there are matters which would not necessarily be matters to be proved on oath. We have to remember that the Report itself is not necessarily proved on oath, and does not necessarily contain a single statement on oath; it may consist of opinions formed by various persons, either before the Commission or otherwise, who can only say "Well, that is my opinion; I cannot swear to it." Since the nature of the Report is not on oath, I doubt very much whether it would suit the purposes of the Government in regard to subsection (6), to say that everything in the proceedings to challenge the Report must be on oath, whereas the whole Report is a matter of opinion. I say no more than that I should like that to be considered.

On the other hand, to my mind it would be impossible to treat anything contained in the Report as conclusive evidence of the matters stated, because a great many of the matters are not the subject of conclusive evidence at all. Whether the words prima facie, though they are far better than the word "conclusive," will be sufficient, and will satisfy those who are in charge of the Bill, I do not know. I certainly think the matter is capable of further consideration, and that even the words "prima facie" would probably have to be qualified a little by reference to what I have said about the whole thing being, in many cases, purely a matter of opinion.

Clause 18 agreed to.

Clauses 19 and 20 agreed to.

Clause 21:

Procedure and evidence on application under ss. 15 to 20

21.—(1) Every application under sections fifteen to twenty of this Act shall specify the nature of the order sought by the applicant and shall contain a statement (to be verified in such manner as may be prescribed) setting out the nature of the applicant's interest and the facts upon which the application is based.

(6) In any proceedings on an application made in relation to a patent under sections fifteen to twenty of this Act, any statement with respect to the making, using, exercising or vending of the patented invention, or with respect to the grant or refusal of licences under the patent, contained in a Report of the Monopolies and Restrictive Practices Commission as laid before Parliament under section nine of the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, shall be conclusive evidence of the matters stated.

3.25 p.m.

LORD LUCAS OF CHILWORTH moved, in subsection (1), to leave out "The nature of the applicant's interest and." The noble Lord said: The only object I have in moving the first Amendment to Clause 21 is to invite the Com- mittee to discuss Clause 21 in toto, as the noble and learned Viscounts, Lord Simon and Lord Maugham, have already done. I want to say nothing m support of the clause, especially subsection (6), as it stands in the Bill, and really nothing in support of the Amendment to that subsection which stands in my name, because I do not intend to move it, but in regard to the Amendment to which I am now speaking, I would like to take the opportunity of putting to the Committee quite frankly some of our difficulties. We earnestly invite the help of noble Lords opposite to overcome what is a great difficulty. That is the reason why we sought to put "conclusive" in subsection (6) as it stands in the Bill at the present time.

Parliament, in its wisdom, has said that the mischiefs which are prevalent in a monopolistic system will have to be inquired into and if anything is found to be against the public interest Parliament will have to put it right. Accordingly, Parliament set up the Monopolies Commission. In its wisdom or otherwise, in the Monopolies and Restrictive Practices Act Parliament deleted all sanctions when those inquiries dealt with patents. Sanctions against any mischief with regard to patents and patent agreements have to be the subject of this Bill. From your experience your Lordships will know that the working of a Monopolies Commission will be a long and laborious operation. I do not think I shall be far out if I say that it would probably take about six months for the appropriate Department, the Board of Trade, to decide to set in motion the machinery of the Monopolies Commission. Very likely it would take another nine months or so for the Monopolies Commission to investigate and report. Then, if the matter affects a patent, the appropriate authority has to take action before the comptroller, which I should think would take about another nine months. Since every decision of the comptroller is subject to appeal to the Patents Tribunal, I should think that another nine months would elapse.

So, from the time that a public mischief has been unearthed until a sanction can be made operative against it, a period of approximately three years will elapse. In those circumstances, if a ring and the operations of a ring had been the subject of investigation, what chance would anyone—even the individual whom the noble and learned Viscount, Lord Maugham, spoke of on Second Reading, "the poor inventor"—have of really being an opposer or an interested party right the way through those proceedings? What chance will a Government Department have of seeing that justice is done when the powerful and wealthy ring, right through the legal machine, opposes any final action upon what the Monopolies Commission have found as a mischief? A sanction cannot operate within less than three years. What justice is there in that?

I am not a lawyer; I am a layman. But I am sure that mill laymen will agree with me that a legal machine which, because of its expensiveness, denies justice to the ordinary individual is a negation of justice. So we sought to put in subsection (6) of Clause 21 that all the evidence which had come out before a Monopolies Commission should be conclusive before the comptroller and the Patents Tribunal, thus preventing a rehearing at every stage of the proceedings before the Monopolies Commission. Unless that is done, the whole thing can be re-heard before the comptroller, sitting in his judicial capacity as the Comptroller-General. And, of course, since every decision he makes can be appealed against to the Patents Tribunal, it can also be re-heard there. As I have already told the Committee, the whole weary process can go on for three years before either the interested parties who have been heard have justice and before the British public have justice.

I am well aware of all the arguments which the noble and learned Viscounts, Lord Simon and Lord Maugham, have raised, and I am not going to do more than explain why we sought to have the word "conclusive" inserted in this Bill. As I say, I shall be prepared to withdraw the Amendment which I am moving now and not to move the other Amendments to Clause 21 which stand in my name. The whole question of Clauses 21 and 18, which are closely linked, can then be the subject of consideration by the Government, in the light of the views expressed by your Lordships and those that we can glean from outside. With his usual kindness and courtesy the noble and learned Viscount, Lord Simon, has made a suggestion to us which is under careful consideration, and on the Report stage I hope to be able to put forward something which will meet with the entire approval of your Lordships. If either noble and learned Viscount has anything to add now to what they have already said, I am sure that it will be helpful to us to hear it. I beg to move.

Amendment moved— Page 16, line 4, leave out from ("out") to the first ("the") in line 5.—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

I should have been well content if the noble Lord who has just spoken had not moved his Amendment and we had kept the clause in the Bill as it stands, without any further discussion, because I think the spirit of our proceedings is that neither of us is going to approach this problem with his mind made up. Neither of us wishes to capture public approval by making statements which might appear to be a little partisan, and we both recognise that there is a difficulty to be solved. As the noble Lord has thought it well to say what he has said—in most moderate language. I need hardly remark—I must say one or two words, briefly and simply, to point out what is the difficulty.

It is necessary first, perhaps, to realise what the Monopolies Act does. I am sure that it was by accident, but the noble Lord did not mention what is one of the most important things about the Monopolies Act—namely, that, granting all the useful services of the Commission, nothing whatever can emerge from the inquiries and conclusions of the Commission until a draft Order made by the Board of Trade has been approved by both Houses of Parliament. That is laid down in the Act. It is not the fact that the Commission can proceed and produce some concrete result without that. At present, nothing which the Commission can do has any ultimate effect upon anyone's rights unless there has been an Order approved by the vote of both Houses of Parliament. It is just as well to remember that. I agree that that may not be the most convenient way of getting a proper sanction, but it is not the same as saying that there need not be a proper sanction. The whole problem is, what is the best way in which, between us, and with everyone's good will and co-operation, we can devise a prop or sanction.

Another thing which the noble Lord said just now I would respectfully beg to correct. He said the proposal in the Government's Clause 21 was that all the evidence heard before the Commission should stand as evidence before the comptroller. With great respect, that is quite inaccurate. The provision in this clause is not that all the evidence should be—nor indeed that it ought to be—before the comptroller, but that what the Commission says is to be regarded as conclusive and should go before the comptroller.

LORD LUCAS OF CHILWORTH

I entirely accept that. I made a slip in speaking of this matter.

VISCOUNT SIMON

I can assure the Committee that I am as ready as anyone to see that there is both promptitude and decision and that the poor inventor is properly protected. This, of course, is the clause by which the Government Department are going to help to protect him. But that is no reason at all for saying that observations made in a Report by a Commission the proceedings of which, as my noble and learned friend, Viscount Maugham, has just said, are not in the least governed by any judicial standards, must be regarded as conclusive.

I think that I had better state briefly in outline what was the suggestion I made for consideration. I do not do so in the least because I wish to make a speech at this stage or to capture anyone's approval, but simply that we should have the thing balanced. It appears to me that when application is made by a Government Department to the comptroller for this sort of Order, it would be quite right that what has been reported by the Commission should not be "given the go by." I entirely agree that the procedure must not follow the course of going over the whole wearisome business again. If I may be excused for saying so, I do not think the noble Lord—close as is the attention which he has given to this Bill—has quite appreciated what is done; it may be more apparent to a man who is a lawyer than to a man who, as he himself has said, is not.

If you are engaged laboriously in trying to find out a series of facts—as, for instance, Scotland Yard have to do when they are endeavouring to ascertain how it comes about that a crime has been committed—there may well be over a long time a very elaborate enquiry. It is often necessary to get statements from many people and all sorts of communications by telephone and otherwise have to be made. There have to be consultations again and again. All these things are parts of a process of finding out facts. It would be quite a mistake for the noble Lord to imagine that when a person is put in the dock at the Old Bailey and charged with murder, all that process is gone through again. Nothing of the kind is clone. The prosecution, having, by this laborious procedure, found out what they believe to be the facts, then what has to be done—of course under proper judicial forms, on oath, in the presence of the accused and with full opportunity for cross-examination—is to advance proof of the relevant facts. That is not what is called "doing the whole thing over again," but merely presenting to the Tribunal the conclusions which the authorities believe to be justified.

Now, that being so, it had occurred to me—I only suggest it for consideration, nothing more—that it would be right for the comptroller to have the case, as that was made, proved before him, as he would in any other sort of application, but it should be provided that he may have regard to the Commission's Report. There are, I think, many cases in our Statute Law where there is provision that a judicial Tribunal may have regard to something or other. That does not mean that they are bound by it or that they have to disregard it. It means that they can give it such weight as, in the circumstances and having regard to the case made before them, they think it ought to have. It is always possible that even the Monopolies Commission may make a mistake, and no one would wish to alter people's rights by relying upon a mistake. It is possible that after they have made their Report, it may be complained that in some material particular the contrary is the fact. No one would want to say that that should not make ally difference and that, "If they have once made a Report it does not matter how many times they have repented, I have still to be bound by it."

Therefore, it appeared to me that there might be some ground for asking that this should be a judicial sanction and not a Parliamentary sanction. I agree that it would be very difficult to do the thing by Resolution of the two Houses of Parliament. Let us see that the decision which, after all, does affect some people's rights, is arrived at by a reasonable judicial process. It does not need a High Court judge. I am sure that the comptroller would wish to act—and that he does in fact act in a judicial sense. I sincerely put forward the idea as being of some help. If I may respectfully say so, it would be better, instead of agreeing with the official point of view at this stage, that we should both keep our minds open, as I most sincerely will do. We do not want to do anything but arrive at the best and most practical means of securing justice for anyone.

LORD LUCAS OF CHILWORTH

I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 21 agreed to.

Clauses 22 to 25 agreed to.

3.41 p.m.

Clause 26:

Use of patented inventions for services of the Crown

26.—(1) Notwithstanding anything in the principal Act, any Government department, and any person authorised in writing by a Government department, may make, use and exercise any patented invention for the services of the Crown in accordance with the following provisions of this section.

(4) The authority of a Government department in respect of an invention may be given under this section either before or after the patent is granted and [either before or after the acts in respect of which the authority is given are done, and] may be given to any person whether or not he is authorised directly or indirectly by the patentee to make, use, exercise or vend the invention.

VISCOUNT SIMON moved to add to subsection (1): Provided that an article produced under the authority of this subsection shall not be made or used without marking the article so produced, If the patentee so requires in writing, with the patent number. The noble and learned Viscount said: My noble friend the Earl of Munster has asked me to do the best I can in looking after his Amendments, and your Lordships wilt excuse me if I do not do it very skilfully. There is a good deal to be said for the object here aimed at. In Clause 26, there is a provision, a perfectly right provision, that a Government Department, and any person authorised in writing by a Government Department, may make, use and exercise any patented invention for the services of the Crown in accordance with the following provisions. It is pointed out to us that that means in some cases that a person authorised by a Government Department will make a patented article which those who come across it may not know is a patented article at all. Of course, if it is not a patented article, if it is a thing which anybody may make, there is no reason why more people should not make it, and they may do so quite genuinely. But there is nothing to show them whether the article is a patented article or not.

Therefore the object of this Amendment is to secure that a patentee, who will of course be entitled to compensation under the Bill if the Government decide that they must authorise somebody to use his patent, shall at least be protected from having the patented article imitated and copied by all sorts of other people who might say, "I saw this gadget. I did not know it was patented and I have reproduced it and sold it." In that case we have what is called in this branch of the law "innocent infringement," and, as the noble Lord opposite knows, in such a case a patentee may get an injunction but cannot get damages. The object of the Amendment is to provide that if the Government think it right to authorise a manufacturer to make a patented article, then the patented article should be marked with the patent number so that anyone who may choose to imitate or copy it without authorisation knows he is making an infringement of the patent. That is in itself reasonable.

But I can appreciate there is one difficulty. It may be that this will be part of the answer which my noble friend may be disposed to make. I can imagine a case in which it is really contrary to public interest for a patented article to be marked. I do not know enough about the subject to be sure, and it may sound a little fanciful, but it may be the case that if in war an article which the Government have found it necessary to authorise a manufacturer to make bears a patent number, it may give the enemy some opportunity of tracing the patent or the patentee's place of business, or something of that kind. Nobody wants that to happen. If my noble friend Lord Munster had been here, I would have suggested that it would be well to put in after the words "provided that," some phrase of this sort, which I suggest for the consideration of the noble Lord, Lord Lucas of Chilworth: "unless the Government Department are satisfied, in regard to the patentee's interest in the patent, it would be contrary to the public interest so to do." None of us wants to do anything contrary to the public interest. If it be known that there are cases in which a patented article bearing a patent number may cause some difficulty in time of war, those cases must be provided for. Subject to that, however, I cannot see why the man who is the owner of a patent should not be entitled to this amount of protection. The law says that it is his patent, but, none the less, the Government may use it and, if necessary, may authorise its own manufacturer to use it. Very well; but one thing the patentee asks is that at least it should be shown that it is in fact a patented article. If that can be done consistently with the public interest, I do not suppose for a moment that my noble friend will not sympathise with the object we have in view. I beg to move.

Amendment moved— Page 18, line 5, at end insert the said proviso.—(Viscount Simon.)

VISCOUNT MAUGHAM

I hope this Amendment will be accepted. It requires consideration and it may be necessary before Report stage to consider it in greater detail. The first thing that occurs to a rather old hand at matters of this sort is that there are many articles patented which cannot be marked because they are of fluid character, or because they may disappear in the course of use. Therefore if we put in some words about containers, it would probably help to make this provision useful in those cases. It would be helpful also to consider the use of the somewhat similar language in the Trades Marks Act, which deals with the marking of goods. I think we shall find there that it has been discovered, after much experience, how to describe the way in which goods should be marked. There is one thing I must say in support of the Amendment, if the Government are hesitating about it. Before objecting to it, I think one should look carefully into the rules with regard to the granting of foreign patents based upon patents which have obtained recognition in this country. My memory is not what it was, and I am not sure whether in the rare cases in which I have had to deal with such matters there has not been some requirement about the mark of the patent which has to accompany one of the documents on which the application is based. It would be regrettable if an English inventor could not get the patent abroad, because unfortunately the Government were using it here and it had no mark on it.

LORD LUCAS OF CHILWORTH

As the noble and learned Viscount has said, this Amendment appears on the surface to be quite reasonable, and as such it has my entire sympathy. My difficulty is to give practical expression to that sympathy. As has been said, one great difficulty is the matter of security. In a number of cases it would be right against the public interest to carry this requirement into effect. The noble and learned Viscount has mentioned one or two specific circumstances, and I will mention another. If the articles were stamped with a patent number, it might result in the information being conveyed to the enemy on the capture, let us say, of some kind of machine. The patent number being there might disclose the fact that it is a patent, and that again might disclose something of which, if the number were not there, the enemy would be entirely ignorant.

VISCOUNT SIMON

Would the noble Lord give an example?

LORD LUCAS OF CHILWORTH

Yes. I have discussed this with the Service Departments, and they have three specific objections. In regard to the marking of the patent, they say that on capture of the article concerned the patent number may result in information being conveyed to the enemy regarding, for example, the parent company and the place of manufacture—that is the instance the noble and learned Viscount gave. The identification of a patent number attached to wrecked apparatus may disclose the nature of the apparatus, which would otherwise be unascertainable. Also, some things have to be manufactured in great emergency and there would not be time to put the number on the article; and, as Lord Maugham has said, there are many cases where it would not be reasonably practicable to put it on.

I am quite prepared to meet the noble and learned Viscount, if he thinks this will cover the point. I will give an undertaking that where it is reasonable and practicable, and not against the public interest, the Service Departments will carry out what is proposed in this Amendment. However, to say that is one thing, and to put a statutory obligation on them, to do it is quite another. Whether the noble and learned Viscount will think my undertaking is worth anything I do not know—personally, I do not think it is, worth very much. It will be the same people who have to determine whether it is reasonable, practicable or in the public interest. I am sure noble Lords will agree that the Service Department must, have the last word in matters such as this, where the security of the Realm is involved. Although I am quite willing to give the undertaking and will do my best to see that it is observed by the Service Departments, I hope, for those reasons, that the noble and learned Viscount will not press for a statutory obligation to be put upon those Departments to do something which they, in their wisdom, think may at times be much against the public interest.

VISCOUNT SIMON

I am obliged to the noble Lord for what he has said. In preparing to deal with the Amendment, he had in mind, I think, that the objection that it might be contrary to the public interest would be a very effective answer—as, indeed, it would. That is why I should like him to consider this matter a little further with his advisers. I would like to make one comment upon what the noble Lord has said. I feel he has rather given the impression that Clause 26 is limited to a Service Department using a patent in time of war. I do not think that is so.

LORD LUCAS OF CHILWORTH

No, it is not.

VISCOUNT SIMON

The scope of Clause 26 is a good deal wider than that. So far from thinking the noble Lord's, undertaking is worth little, I accept any undertaking which he gives with the full assurance that he will do everything in his power to see that it is carried out. But not every Government is as much to be trusted as the Government for which he is speaking at the moment. Consequently, since it is conceded that there are cases in which it would be quite right to do this, where the public interest will not be affected, and since undoubtedly we ought to provide for the exception where in the opinion of the Government of the day it is quite right to do it, I hope the noble Lord will consider for a later stage, without any previous determination, whether some Amendment of this kind is not desirable. If the noble Lord will inquire, I think he will find that this is not a fanciful point. It is not fair to a man who has a patent and who, quite properly, has to allow a Government Department to authorise the manufacture of it, that he should be exposed to the danger of another manufacturer, not knowing the thing is patented at all, making it and selling it ad lib. Therefore, while the man must put up with it if it is in the public interest, nobody, not even a fighting Service, would wish to leave him in that state, without protection, beyond the point where it is necessary. I still think it would be worth while to consider this matter from that point of view. I make those observations with Great respect to the noble Lord and to all who advise him to resist this Amendment. In the circumstances, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

VISCOUNT SIMON moved, after subsection (1) to insert: ( ) Where in the exercise of its powers under the last foregoing subsection any Government department or any person authorised in writing by a Government department intends to make use or exercise any patented invention for the services of the Crown such Government department shall notify in writing the patentee of such intention and shall in like manner from time to time notify the patentee of the fact and extent of such making, using or exercising of the invention. The noble and learned Viscount said: This Amendment raises a different point, which I hope will be considered with care, although it need not take any great length of time.

As things stand at present, the inventor whose invention is appropriated by the Government for the reason that it is needed for the services of the Crown does not know how much user of the invention takes place. All that happens is that the Government Department are entitled to use it. No doubt in the end, if there were an arbitration, the Government would have to pay what was proper according to the amount of the user. But the man does not know whether it is used or not; neither the fact nor the extent of the user of his intention is disclosed to him. It may happen that the Government are uncertain about the patent position at the date when some contract is placed. In many instances they are well aware of the patent position, but they do not tell the patentee that they are using his invention. They are not obliged to do so; they are at perfect liberty to act as though there had never been any patent at all. There appears to be no good reason why the patentee should not be given the information, because, after all, it is on public grounds that the Government are making us of his own property. I do not think this Amendment can possibly conflict with the importance of maintaining our safety in the face of the enemy in time of war. The fact that a Department inform the patentee: "We are using your patent, and we will tell you from time to time to what extent it is being used," cannot assist the enemy in any way. I beg to move.

Amendment moved— Page 18, line 5, at end insert the said subsection.—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

Although the noble Viscount said that it could not assist the enemy, of course it could, because the patentee might be associated with the enemy or potential enemies. If it is to be made a statutory obligation for a Government Department to notify in writing that they are using a patent, it may be notifying the enemy. In substance, the argument against this Amendment is exactly the same as against the previous Amendment—that this would be a good thing, to do if it were practicable. I do not know whether the noble Viscount has any suggestion as to how we can get over that difficulty, but in my discussions with the Department concerned we have not yet arrived at a solution. However, I will discuss it with them again. But on security grounds I am afraid that I cannot accept this Amendment as it is drafted at the present time.

VISCOUNT SIMON

In view of what has just been said, I will withdraw the Amendment at this stage, but I am a little puzzled at the idea that in notifying the patentee that you are using his invention you will be assisting the enemy. That is the only ground upon which it is resisted. If that is a serious ground, and if those who are responsible for defending the country feel that we should be exposed to danger because a Government Department notified the patentee, then God forbid that I should make such a proposal. Perhaps the noble Lord will consider whether he would like to put into this otherwise harmless, and I should have thought useful, proposal, the condition that it should apply only if the Government do not prohibit it.

LORD LUCAS OF CHILWORTH

I will consider that.

VISCOUNT SIMON

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH

In moving this Amendment, may I also refer to the Amendments at line 10 and line 14, because I had intended to accept in principle the Amendments on the Marshalled List in the name of the noble Earl, Lord Munster, at line 10 and line 12. If the noble Viscount who is watching the interests of the noble Earl in this matter will accept the: offer which I have made to accept those Amendments in principle, I will move that we will accept the Amendment down in my name. I beg to move.

Amendment moved— Page 18, line 6, leave out from beginning to the second ("any") and insert ("If and so far as the subject matter of").—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

I quite understand that the noble Lord wants to secure the same result as would be secured by the two Amendments down in the name of my noble friend Lord Munster. There is however, one point I would like to mention which might be considered. It has nothing to do with policy or merits—it has to do with language. I speak with sincere respect for those who think otherwise, but I am not at all clear that it is the correct use of language, as employed by those who have had occasion to deal with the patent law, to speak in this connection of "subject matter." It is true, of course, that it is a familiar proposition that the invention must have subject matter or it will not obtain a patent. We have already discussed this point. If the noble Lord will be good enough to turn back to Clause 4, he will find that he accepted an Amendment which struck out the use of the words "subject matter" because they were not the appropriate words to use, and substituted a different phrase. The reference was to "the whole of the subject matter of the claim."

I doubt whether it is a correct use of language, as it is understood by patent lawyers, to talk about "the subject matter of a claim." The invention is the thing which is patented, and although it is perfectly true that you cannot patent an invention unless it has subject matter, with great respect it is not the correct use of English, as understood by those who expound the patent law, to talk of "the subject matter of the claim." That is my belief, and I should be grateful if the noble Lord would consider it. I ant sure that Mr. Swan will tell him about that without any prejudice. Changing the words in the Act to this proposed new phrase is only a verbal change and, I think, is not a verbal change for the better. The present clause says: Where any such invention, so far as claimed in any claim … That is the correct use of language. The invention is in the claim; the subject matter is not in the claim. Therefore, if we are going to use the dictionary of patent law, I question whether this proposal is an improvement. For the rest, I am grateful to the noble Lord for securing what was the object of Lord Munster's Amendment.

LORD LUCAS OF CHILWORTH

The noble Viscount will appreciate that in these matters I am guided by Parliamentary counsel. Doubtless the noble Viscount could stand up to an argument with Parliamentary counsel upon these purely technical matters, but I have not yet assumed that amount of courage. However, I will convey to Parliamentary counsel exactly what the noble Viscount has said.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

I beg to move the next Amendment.

Amendment moved— Page 18, line 10, leave out ("of the invention") and insert ("thereof").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

I beg to move.

Amendment moved— Page 18, line 14, leave out from beginning to ("has") and insert ("If and so far as the subject matter of any claim of the complete specification").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This is a drafting Amendment. I beg to move.

Amendment moved— Page 18, line 20 after ("patentee") insert ("with the approval of the Treasury").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

VISCOUNT SIMON moved, in subsection (4) to omit "either before or after the Acts in respect of which the authority is given are done, and." The noble Viscount said: I apologise to the noble Lord opposite for not having put this Amendment on the Marshalled List. The proposal is not unknown to the noble Lord, and I am sure it is not unknown to the Lord Chancellor, because it is a point to which attention has been called by an authority whom we all respect. The point is technical, but can be put in a few minutes. If the claim which the patentee has for compensation is a claim made against the Government, then the form of proceeding is by originating summons in the Chancery Division. Such claims arise from time to time, and they involve preparation and the collection of evidence. On the other hand, if the claim of a patentee for compensation is a claim against a person authorised by the Government—the manufacturer—then his claim is not to be presented in that form but is in the nature of an action in which he can secure compensation. It seems very undesirable that by the action of the Government after the authority has been given to the manufacturer the patentee, who has behaved perfectly properly, should at the last moment lose his right to a remedy which he is perfectly justified in pursuing.

To put the matter in another way (I think I am right, and the Lord Chancellor will correct me if I am wrong) when a Government are going to employ a manufacturer to make an article which may involve patent rights, the agreement must be in one of two forms. The Government can say, "We employ you, the manufacturer, to make this article for us, and the Government will be answerable for any consequences if you are using a patent." That is a common form, and a very popular one, and in that case proceedings would take place against the Government. Alternatively, the Government sometimes make an agreement in which they say, "We employ you, the manufacturer, to make the article, and you must take the consequences of doing so in the event of any claims which involve a breach of patent." It is now suggested by subsection (4) that by an ex post facto authority given by the Government to the manufacturer to use a patent the proceedings which the patentee has taken should be nullified. That would mean that he has incurred expense, and finds at the last minute that he has made a claim by the wrong process and against the wrong defendant. This is a pure technical point and it is right, I think, that it should be very carefully considered. I hardly expect the noble Lord, or anybody else, without having previously considered the matter rather more closely, to deal with it now; but I suggest that it is well worthy of consideration. I beg to move.

Amendment moved— Page 18, line 25, leave out from ("and") to ("may") in line 26.—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I readily give the noble Viscount a promise that the matter will be considered. I am grateful to him for his explanation of the matter, and for his courtesy in having given me a copy of his Amendment on the way into your Lordships' House to-day. It requires, as the noble and learned Viscount has said, very careful consideration. If he will be kind enough to withdraw the Amendment now, I will have the matter considered and see what we can do between now and the Report stage.

VISCOUNT SIMON

In the light of what the noble Lord says, I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 26, as amended, agreed to.

Clause 27 [Rights of third parties in respect of use for services of the Crown]:

4.14 p.m.

VISCOUNT SWINTON moved, after subsection (1) to insert: ( ) Subsection (3) of section twenty-six of this Act shall have effect in relation to any use of an invention made for the services of the Crown by the patentee to the order of a Government Department as if that use were made by virtue of an authority given under that section.

The noble Viscount said: I am glad that in this rather complicated case it falls to the junior counsel only to argue the more obvious and incontrovertible propositions. I think it would be to your Lordships' convenience if I were to explain briefly the object of this Amendment and the others which stand in my name on this clause, because they all hang together. The object is to bring the clause into line with the recommendations of the Swan Committee. That Committee recommended that where a patentee himself works a patent for the service of the Crown he shall be entitled to something in the nature of a royalty remuneration. If the patentee had given a licence to a licensee who was working on behalf of the Crown, and the consideration had been a payment—as it would be—then the licensee would pay the patentee the amount of the royalty. And if the licensee were manufacturing under this patent he would then get whatever was the agreed price for the articles he manufactured. That price would, of course, include what was considered an element of fair profit. At the same time, in costing the licensee's manufacture there would be taken into account and allowed to the licensee as a proper cost the royalty which he had had to pay to the patentee. That would be an overhead which would be allowed as a matter of course.

In such a case the patentee would have his royalty from the licensee, and the licensee would get whatever was the proper rate of profit in addition to his costs—which, as I have said, include the royalty. Oddly enough, and very illogically, if the patentee himself is working the patent, he will get, of course, an element of profit but that will be exactly the same as the element of profit to the licensee; but he will be allowed nothing by way of royalty for his patent. That appears to me to be illogical and unreasonable. The Swan Committee advised that both the licensee and patentee should be treated alike, and that the patentee, in addition to getting his element of profit, should be allowed whatever is right as royalty as a remuneration for the use of a patent. Clause 27 as it is drawn in the Bill would preclude that. My Amendment will include it and will make the treatment of the patentee and of the licensee exactly similar.

The second point is this. Under Clause 27 (2) (a) the exclusive licensee is considered to be the equivalent of a patentee. In that case he ought to be entitled to claim compensation from the Crown. But, oddly enough, while saying that he is the equivalent of the patentee, which obviously he is, Clause 27 (2) (b), as I read it, disentitles him to that compensation. I—and not only I but, more important, the Swan Committee—thought that that was wrong. I think that subsection (2) (b) ought to be struck out. I do not know why it is there.

The third point, which is closely associated with the second, concerns the right of a licensee to be represented in making a claim against the Crown. If the licensee is an exclusive licensee, then obviously he must be in exactly the same position as the patentee; the patentee has assigned all his rights to him, and, if the patentee had a claim against the Crown, as he of course would have, then why should not the licensee have the same right and be in a position to recover compensation? Because he, the licensee, is the real claimant and the real sufferer if he does not get a square deal. That was the way the Swan Committee looked at it. Again the clause disregards what the Swan Committee have proposed, and, if the clause remains as drafted, the licensee cannot challenge the amount of an award which the Government agree with the patentee, although, observe, the patentee has really forfeited all his interests and for all purposes the exclusive licensee is standing in his shoes.

All that the exclusive licensee could do would be to say: "Here is an award and it is suggested that that award shall be divided between the patentee and myself." Is not that obviously the right and reasonable thing to do as the Swan Committee suggested? Here are two persons who are interested—the patentee who was the original inventor, and the exclusive licensee to whom the patentee has assigned all his rights. It has to be settled with the Crown what is the right remuneration to pay. I should have thought it was elementary law, as well as elementary common sense, to say that, where there were two people who were obviously interested parties in a claim, both those people should be entitled to take part in the negotiations and, if the negotiations break down and there has to be a judicial assessment, they should then both be parties to the negotiations or to any litigation with the Crown. That is what my third Amendment provides for. I hope I have explained my Amendments clearly. They seem to me, in my simple way, to be common sense. They certainly must be very good patent law and good patent practice because the Swan Committee have recommended them. I am sure that such an obvious case will appeal to the noble Lord. I beg to move.

Amendment moved— Page 19, line 24, at end insert the said subsection.—(Viscount Swinton.)

LORD LUCAS OF CHILWORTH

I am glad that the noble Viscount has moved this Amendment because at least he and I speak the same language. From what he has said, I think there are four cases which the noble Viscount is trying to cover here. First, there is the patentee who supplies the Crown, and secondly, there is the exclusive licensee who, as the noble Viscount has said, stands in the same position as the patentee. But there are two kinds of exclusive licensee. There is one who has obtained the exclusive licence for an outright lump sum, and there is the other who has obtained an exclusive licence in a case where there is consideration of the fact that royalties are paid by the exclusive licensee to the patentee. Fourthly, there is the case which the noble Viscount has mentioned, where the patentee has sub-licensees.

May I deal straight away with the first case that is, where the patentee himself manufactures and supplies? And the exclusive licensee, who has obtained the exclusive licence for a lump sum, stands in exactly the same position. It is in the Letters Patent to-day that the Crown must have the right to use that patent on terms that are reasonable and if the Crown and the patentee fail to decide between themselves what is reasonable, there is recourse to the courts. If I may put it this way—I know that the noble and learned Viscount will not mind two business men arguing in a business manner—my argument against the noble Viscount is this: that the price he obtains from the Crown is an inclusive price, because the very object of a patent inherently is not to give a patentee the right to manufacture—that is a common law right. The patent gives him a monopoly; the patent is there to prevent other people manufacturing. So the fact that he holds the patent for an article which he himself manufactures and supplies to the Government does not give him the right to a royalty; it gives him the right to a royalty only when somebody impinges upon his monopoly. Therefore we argue that the price which he gets from a Government Department is equivalent to the price he should obtain, given all the circumstances of costs and taking everything into consideration.

VISCOUNT SWINTON

May I interrupt for a moment? You give the man nothing for his patent right, and you therefore make no difference between a man who has not taken out a patent and a man who has. You place a contract with me, not because I am the unique owner and have protected myself because of my unique invention, but because you think I am good manufacturer. You fix a price with me, and that price gives me an element of profit—say, 7½ per cent. on cost, or whatever it may be. Or perhaps my profit may be based on a definite agreed element of cost—I am glad I have not to argue that sum now. Where there is a real value in this invention, by reason of its unique character, which the patentee is entitled to have protected and does, in fact, get protected, you will pay him nothing for that because you will, I hope, be assessing his capacity to manufacture and the costs of manufacture in the same way as in the case of a non-patented man, because you want to place your contract at the price at which an efficient man will carry it out. I suppose the same applies in the case of an exclusive licensee who has paid a lump sum. I am not so sure about him, however, because I think he could have said: "I paid £50,000 for this patent. That is part of my cost and, therefore, I am entitled to 5 per cent. (or whatever it is) on the £50,000."

LORD LUCAS OF CHILWORTH

Forgive me. Why did he pay that £50,000? Not for the right only to manufacture it, but for the right to prevent other people from manufacturing it.

VISCOUNT SWINTON

For both.

LORD LUCAS OF CHILWORTH

No; because he bought the monopoly.

VISCOUNT SWINTON

He paid it for the monopoly right to manufacture. There is nothing wicked about this monopoly because ex concessis it is a monopoly which the State not only approves, but gives to the exclusive licensee of a patent who has paid £50,000 for that monopoly right to manufacture. In that case the patentee, of course, is paid nothing—you cannot have your cake and eat it. But would not a Government Department contracting with an exclusive licensee who has paid £50,000, say in the courts "I must allow the man something for that payment of £50,000"?

LORD LUCAS OF CHILWORTH

May I tell the noble Viscount why? The man did not have to spend that £50,000 to manufacture that article; he could have manufactured it by applying for a licence to manufacture from the patentee. But he bought the exclusive licence so that he could purchase the monopoly and, therefore, prevent other people from manufacturing it; or if he did allow other people to manufacture it, he could obtain a royalty. The noble Viscount will see the distinction. The man need not have spent £50,000 to have the right to manufacture it; he could have done that by applying for an ordinary licence to manufacture. But he thought he could make some money if he had the monopoly, and therefore his £50,000 was paid not in order to get the right to manufacture but for the purchase of the monopoly. When you come to the third case, where the man has not paid a lump sum but his agreement with the patentee is for royalties to be paid (in other words, the value of his exclusive licence is in the amount of user) then the Government say, "Yes, we will pay the royalty to the patentee."

VISCOUNT SWINTON

They have got to, because it is part of the cost.

LORD LUCAS OF CHILWORTH

Yes. In regard to the fourth case which the noble Viscount mentioned—that of the sub-contractors who should be party to the negotiation—surely the noble Viscount does not mean that the Government should pay more. We say that we will pay the royalties to the patentee, but that it is for all those who have a claim against the patentee to make their case with the patentee. I am perfectly prepared to argue that this is an administrative point. I am advised by those Departments concerned that it would be almost impossible for them to have to treat with every known and unknown individual. They are not paying compensation to those whose rights have been infringed by Government user; they are paying a royalty for what is manufactured. And that royalty, no doubt, will be based upon the value it has to the Crown. They pay that royalty willingly. They say to these sub-contractors, "When you contract and give us your price, please do not put into that price any figure for royalty We will deal with that. We will deal with the patentee." They deal with the patentee and they say to him, "You must share out amongst all your sub-licensee; according to the arrangements you can best make." The noble Viscount, I thought, put forward the argument that one person might not have such a good case as another, or that one might find a patentee who was old and woolly and who settled with the Government for a sum which all his sub-licensees would object to. My argument in regard to that is that the parties are in commercial agreement between themselves, and that the patentee should take care of that before they start.

VISCOUNT SWINTON

But how? The noble Lord has said it is difficult to put this into an Act of Parliament. I do not know how it can be put into an agreement. If the Government claim the right to manufacture and somebody makes a bad or woolly bargain with the Government, I do not know who has the whip hand as to the amount of compensation to be paid. The noble Lord asked my noble and learned friend Lord Simon: What is the sanction? I would ask: What is the sanction in an agreement like that?

LORD LUCAS OF CHILWORTH

If the noble Viscount and I were in the position of the sub-licensee I am sure we should not allow our interests to be jeopardised by the bad judgment of a patentee.

VISCOUNT SWINTON

But I should not come in.

LORD LUCAS OF CHILWORTH

You would come in when the patentee was paying your appropriate sum out of the amount he had received from the Government. On the fourth case which the noble Viscount raised, the Government maintain that they will pay the patentee the royalties; they will not deal direct with the sub-licensee. It is for sub-licensees and all those whose agreements have been affected by Government user to settle direct with the patentee. And I say that it is up to the sub-licensees, as good business men, so far as they can, to safeguard themselves against all eventualities and to see that they get an equitable share of what the Government pay. On the first three counts I ask the noble Viscount not to press his Amendment upon grounds of policy, as it has always been a condition of the Letters Patent that the patentee must, if required, supply the article to the Crown on reasonable terms. The point is that the patent is not there to protect the patentee as a manufacturer; it is there to protect the patentee as a patent holder, to protect his monopoly. I ask the noble Viscount not to press his fourth count as it would be administratively difficult.

VISCOUNT SWINTON

May I ask the noble Lord whether the reason for this is that the Crown can come along and say, "You shall manufacture"?

LORD LUCAS OF CHILWORTH

Forgive me. The Crown say, "You will supply us upon reasonable terms." The Crown have no right to say to the patentee, "You must supply us." The patentee need not supply.

VISCOUNT SWINTON

If you please. But what the Crown can say is, "If you do not supply us on reasonable terms—and those are terms which we, the Crown, lay down—then we will take your patent and get somebody else to supply us." That is a thing which nobody except the Crown can do. Not only in this legislation but in all legislation we have all along said that where a Government Department act in a commercial way they ought to act in the same way as a decent firm acts. They should be liable to be sued; they should make contracts in the same way. That was the reason the Lord Chancellor introduced an Act to make a Government Department liable to ordinary litigation. A reputable firm may come and ask the noble Lord as a patentee to manufacture, and he may say, "I will make this but I am going to charge something in my price for the patent." The patentee is entitled to do that, and no one under Clause 15 of the Bill, has a right to say that this patent has not been reasonably worked. He would have the right to say, "I will license somebody else to make it, and then I shall get my royalty." Therefore, in every case, except where the Crown comes in, this element of exclusive right is treated as a thing of value for which some remuneration must be paid.

LORD LUCAS OF CHILWORTH

That is not wholly correct. It is only when you manufacture yourself. If a patentee manufactures himself, no royalty is payable because the patent is not granted to give him a royalty for his own manufacture; it is granted to give him a royalty upon those who infringe his monopoly.

VISCOUNT SWINTON

With great respect, the noble Lord is quite wrong. He is rather playing with words there. The whole point is, does the patentee get some money by this set-up?

LORD LUCAS OF CHILWORTH

Yes.

VISCOUNT SWINTON

He does not. He does out of the ordinary manufacturer, because if he does not like the terms he can say to the contractor who contracts with him, "I am going to quote you a price, which price is going to give me some remuneration in respect of my patent right." If he gives a licence, automatically, of course, he gets a royalty in respect of his patent rights. That he can do against every contractor in the world except the Crown. Only when the Crown comes in is he penalised.

LORD LUCAS OF CHILWORTH

If he is not satisfied with the terms the Crown offers he can, of course, go to the courts, and the courts can determine what is a reasonable price, or what are reasonable terms. His patent says he must supply the Crown on reasonable terms. If the two parties cannot agree as to what are reasonable terms, then he can have recourse to the courts. Doubtless, in this connection, the noble Viscount will imme- diately think of a very good bargaining weapon which the man has by saying to the Crown: "If you do not give me a better price to pay me the equivalent of my royalties you will have to get this made by a third party, and then you will have to pay royalties." I suggest that all these matters are taken into consideration in the case of any patentee who goes to the Crown and gets a price, and that he is satisfied that the price which he gets covers royalty and everything else.

VISCOUNT SIMON

The large number of your Lordships who are present and who have listened to this discussion between two business men must have been deeply impressed by the superiority of what I may describe as the "business method." But I am not sure that in my heart of hearts I entirely subscribe to the classification which seeks to make out that there are some people who are business men and other people who are lawyers and know nothing about business. Drawing upon my own experience, such as it is, what I have found is that business men have a strange habit of resorting to lawyers when they are not quite clear as to the nature of a contract which they have made. In that indirect way, perhaps, from time to time one may claim to have had a slight, incidental contact with business.

I want only to put the point—I do not know what the answer is—in the way mere lawyers often do, and that is by assuming a particular instance. Let A be a patentee-manufacturer: that is, let him be a patentee who has works in which he makes the article for which he holds the patent. Let B be another manufacturer—not the patentee—who has an ordinary licence from A to manufacture on royalty terms. Let us further suppose that the Government wish to get the article made for them and are entitled to do so. Shall the Government contract with patentee-manufacturer A or shall they contract with manufacturer B, who has merely the ordinary licence? In both cases, of course, the Government will have to pay. Suppose they make the contract with B; then, I apprehend, they will pay to B both a reasonable cost (which I assume is the same in both cases) and they also will be responsible to B—or it may be more convenient to pay it to A—for the royalty. They will pay £x which is the cost of manufacture, and £y which will be the royalty. That is what will happen when the Government make a contract with B. But suppose that instead the Government make a contract with A, the patentee-manufacturer. Then the Government—if I follow the argument correctly—have to pay £x, the cost, which I have assumed is the same in both cases, but they will not pay any royalty at all.

LORD LUCAS OF CHILWORTH

That is so.

VISCOUNT SIMON

That, then, is the situation as between business men. The question is that inasmuch as the service is the same in both cases, the cost is the same, the manufacturers are equally efficient and the public benefit equally in both cases, should payment be different in one case from what it is in the other? I leave that question to be decided by business men.

LORD LUCAS OF CHILWORTH

In the illustration which he has just given, the noble and learned Viscount, if I may respectfully say so, made one mistake relating to the costs of B, because the royalty which B must pay A must be reckoned in the cost and so the Government would have to pay it. Whether they pay that part of the costs relating to royalty direct to B or direct to A is an administrative matter. When the noble and learned Viscount said the costs of A and the costs of B were the same, that was not correct: there must be added to the costs of B the royalty he would have to pay to A. That is the difference.

VISCOUNT SIMON

Perhaps I should not have used the word "costs." I meant a reasonable money return for work that is done.

LORD LUCAS OF CHILWORTH

You must include costs.

VISCOUNT SIMON

I am quite aware of that. What strikes me as odd is that the total amount that has to be drawn by way of cheque or in some other form of payment should be different in the two cases. We agree that that is the argument. I appreciate the way in which the noble Lord puts it. I was concerned as a mere lawyer only to illustrate the point. I think I do understand it.

LORD LUCAS OF CHILWORTH

Unfortunately wrongly.

VISCOUNT SWINTON

I should like to consider the arguments which have been advanced. Frankly, I do not find them convincing. But I would like to give them consideration. Will the noble Lord, Lord Lucas, now be so good as to elucidate one further point for me. He said that if the patentee does not think he has received a square deal from the Government he can go to court and have it decided. According to him, if the court thought it reasonable to give more it would give more. But would not the court be bound to decide the matter in accordance with this Bill when it becomes an Act? When it does become an Act it will lay down terms. And is not this true: that under the Bill as the noble Lord has drafted it, the court would be precluded from giving A, the patentee-manufacturer, anything in respect of his monopoly patent right—however reasonable they thought it to give him that—as they would have to give it to a licensee, because they would be precluded by the terms of this clause, as drawn, from giving such an allowance?

LORD LUCAS OF CHILWORTH

The noble and learned Viscount is quite correct. In my view they would clearly be precluded under this Bill from paying the patentee-manufacturer a royalty. And I think that the courts would take precisely the same view as I have taken.

VISCOUNT SWINTON

That means that the noble Lord knows the court would decide the matter in the way in which he does, so he will be his own court. That is not an unknown technique, but I thought it applied rather to the East of Europe than to the West—at least I had hoped so. I think it is clear that the Crown does a different kind of deal, a worse deal for the patentee than he would get from any other person who placed a contract with him. I think the noble Lord did not challenge the fact that all I am seeking to do is what the Swan Committee thought was right. We can make up our own minds about what is fair. I propose to adhere to the Swan Committee's recommendations. I have not heard any argument as to why the Swan Committee's recommendations should not be carried out. On the understanding that I reserve full right to return to this or to some other form of words on Report stage, I shall be prepared to withdraw my Amendment.

LORD LUCAS OF CHILWORTH

We do not disagree with the Swan Committee. We think we have a better way of carrying out what that Committee really want. The Swan Committee say they are concerned only with getting a fair and equitable distribution, and that is all that concerns us. Perhaps the noble Viscount will allow me to discuss the matter with him between now and Report stage.

VISCOUNT SWINTON

Certainly. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH

This is a drafting Amendment. I beg to move.

Amendment moved— Page 19, line 37, leave out ("said section twenty-six") and insert ("last foregoing section").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Clause 27, as amended, agreed to.

Clause 28 agreed to.

Clause 29:

Special provisions as to Crown user during emergency

(2) In this section the expression "period of emergency" means the period ending with the tenth day of December, nineteen hundred and fifty, and any other period beginning on such date as may be declared by Order in Council to be the commencement, and ending on such date as may be so declared to be the termination, of a period of emergency for the purposes of this section.

4.52 p.m.

VISCOUNT SWINTON moved, in subsection (2) to leave out all words after "nineteen hundred and fifty" and to insert: and any other period approved by Resolution of each House of Parliament for that purpose. The noble Viscount said: This Amendment also concerns a fairly obvious question of principle. We are here dealing with the creation by Order in Council of a state of emergency. That power has always been subject to Parliamentary approval. If we go back into recent history, we find that the Supplies and Services (Transitional Powers) Act and the Emergency Laws (Transitional Provisions) Act of 1946, which continued the powers of the 1945 Act, were approved by Parliament. Section 5 of the Emer- gency Laws (Transitional Provisions) Act, 1947, which continued those emergency powers until December, 1950, was part of an Act of Parliament. It is now proposed that these precedents should be swept aside and that a state of emergency may be created by the Minister by an Order in Council not approved by Parliament. If there is a real emergency, it is reasonable that the procedure should be rapid, but Parliament always acts rapidly and reasonably in an emergency, and though action should be rapid, it should be by positive Parliamentary approval.

I observe that the noble Lord has gone one-tenth of the way to meet me—at least I suppose he thinks so—by an Amendment providing that an Order in Council under this clause should be subject to annulment in pursuance of a Resolution of either House of Parliament. I do not think that is reasonable. We are not dealing with any of the thousand-and-one Orders in Council that are showered upon us like leaves in Vallombrosa and against which we have an inherent right to pray for annulment. This is much more serious. This is the creation of a state of emergency. What the noble Lord seeks to obtain has been given four or five times in the last ten years, but always by a special and positive enactment of Parliament. What should be done is that where a Minister desires to make a ministerial Order (because that is what it is) to create an emergency, which, so far as I can see, may begin when he pleases and continue for ever, he should come to Parliament and justify it to the full and ask for the Order to be affirmed by Resolution of both Houses.

Amendment moved— Page 22, line 6, leave nut from ("fifty") to end of line 10 and insert the said new words.—(Viscount Swinton.)

LORD LUCAS OF CHILWORTH

As the noble Viscount has said, there is an Amendment down in my name in a negative sense, whereas the noble Viscount's Amendment is in the affirmative sense. I have listened carefully to what the noble Viscount has said, as I always do. I would prefer the negative, because it is easier, but the noble Viscount has advanced very good reasons for the affirmative procedure, and I would accept his Amendment. But I must consult my right honourable friend the President of the Board of Trade. If he calls me over the coals for having given way to the noble Viscount, I shall have to have some second thoughts. In the meantime, I will accept the Amendment.

On Question, Amendment agreed to.

Clause 29, as amended, agreed to.

Clause 30:

Provisions for ensuring secrecy in respect of inventions relevant for defence purposes.

30.—(1) Where, either before or after the commencement of this Act, an application for a patent has been made in respect of an invention, and it appears to the comptroller that the invention is one of a class notified to him by a competent authority for the purposes of this section, he may give directions for prohibiting or restricting the publication of information with respect to the invention, or the communication of such information to any person or class of persons specified in the directions; and while such directions are in force the application may, subject to the directions, proceed up to the acceptance of the complete specification, but the acceptance shall not be advertised nor the specification published, and no patent shall be granted in pursuance of the application.

(2) Where the comptroller gives any such directions as aforesaid, he shall give notice of the application and of the directions to a competent authority, and thereupon the following provisions shall have effect, that is to say:— (a) the competent authority shall then, and at least once in every year thereafter during which the directions are in force, consider whether the publication of the invention would be prejudicial to the defence of the realm;

(3) Where a complete specification filed in pursuance of an application for a patent for an invention in respect of which directions have been given under this section is accepted during the continuance in force of the directions, the provisions of sections twenty-six to twenty-nine of this Act shill apply in relation to any use of the invention made during the continuance in force of the directions by or on behalf of or to the order of a Government department as if the patent had been granted for the invention.

(5) No person resident Al the United Kingdom shall, except under the authority of a written permit granted by or on behalf of the comptroller, make or cause to be made any application outside the United Kingdom for the grant of a patent for an invention unless—

1. (a) an application for a patent for the same invention has been made in the United Kingdom not less than six weeks before the application outside the United Kingdom; and
2. (b) either no directions have been given under subsection (1) of this section or under 687 section twelve of the Atomic Energy Act, 1946, in relation to the application in the United Kingdom, or all such directions have been revoked.

VISCOUNT SIMON moved, in subsection (1) after "authority" to insert "as being relevant for defence purposes." The noble Viscount said: On behalf of my noble friend Lord Munster I move this Amendment, which was put down because, as the Committee will see if they turn to Clause 30, there is a printed sidenote—though the sidenote could not be used in construing the section—which says: Provisions for ensuring secrecy in respect of inventions relevant for defence purposes. I have no doubt that describes what is intended to be done in the body of the clause, but the body of the clause does not contain any reference to defence purposes Therefore it was proposed by my noble friend to insert after the word "authority" in line 15 the words "as being relevant for defence purposes." I notice that the noble Lord, Lord Lucas of Chilworth, has put down an Amendment which, so far as I can see, has the same effect I am not seeking to argue about where the original merit comes from—it does not come from me. I hope that one or the other of these Amendments will be agreed; it does not make any difference which.

Amendment moved— Page 22, line 15, after ("authority") insert ("as being relevant for defence purposes").—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

Again my taskmaster, Parliamentary counsel, would prefer the drafting of my Amendment to that of the noble Earl. If the noble and learned Viscount will withdraw this Amendment, I will move mine, which I understand covers precisely the same point.

VISCOUNT SIMON

I do not think there is very much in it. I know that the noble Lord used the word "taskmaster" humorously, but we must clearly understand that Parliament is not in the least under the authority of the draftsman. We are responsible for our own legislation. The draftsman, though much prayed in aid by some Governments, is only an assistant, and not at all a person to decide what is to be done. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH

I beg to move my next Amendment.

Amendment moved— Page 22, line 15, leave out ("for the purposes of this section") and insert ("as relevant for defence purposes").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

VISCOUNT SIMON moved, in subsection (2) (a) to omit "then, and at least once in every year thereafter" and insert: upon receipt of such notice and thereafter before the expiration of nine months from the date of filing of the application and at least once in every subsequent year. The noble and learned Viscount said: I must ask for consideration of this Amendment. On the face of it, it seems to be a mere matter of the difference of a month or two, but there is a reason for it which will no doubt be fully appreciated. It has to do with the fact that the International Convention lays down as a maximum period a period of one year, and it is highly desirable that the object that we have in common should be consistent with the Convention.

The object of this Amendment is to ensure that when there has been a secrecy order, such as the Government sometimes feel bound to issue, it shall be reconsidered in time to ensure that applications can be filed abroad within the year allowed by the International Convention. If the invention is in fact not one which needs to be maintained as secert, and if the Government do not say anything for twelve months, then it is too late to make the application in accordance with the International Convention. That is the only reason for suggesting a shorter period, in order to give a patentee time to secure his rights in the case where the Government have decided that they need no longer insist on secrecy. I do not think that can be objected to by anybody. I propose that we slightly alter the words so that it will run: … the competent authority shall, upon receipt of such notice and thereafter before the expiration of nine months from the date of filing of the application, and at least once in every subsequent year.… I am sure that neither the draftsman nor the noble Lord desires to deprive a man of his right under the International Convention, in a case where it is no longer necessary to keep the invention secret, merely by putting down arbitrarily a period which will make it too late for him to make use of the International Convention. I beg to move.

Amendment moved— Page 22, line 28, leave out from ("shall") to ("during") in line 29, and insert the said new words.—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I can assure the noble and learned Viscount that I would not dream of consulting the draftsman on points of policy or principle, but only as to the best way to put into effect what we both desire. In this case I think there is something in what the noble and learned Viscount has said. But may I ask what would happen in the case where the specification is not submitted? If the specification is submitted, I can see that there is a point. But some of these people are rather suspicious of Government Departments and will not submit specifications. A Government Department cannot do what the noble and learned Viscount wants them to do unless the specification is submitted to them. This Amendment can affect only those specifications which are submitted. If the noble and learned Viscount is satisfied with that, I am agreeable to accept the Amendment. But it does nothing to force the interested party to submit his specification to the Government.

VISCOUNT SIMON

I suggest that the Amendment might be accepted. I have not quite followed the point of the noble Lord, and naturally I should wish to consider it. What I do notice is that, whatever he the importance of it, the point applies equally to the clause as it stands and as I propose to amend it. I think it might be well to make the Amendment now, though when the Report stage comes along it may be that a new light will have been thrown upon the matter, in which case we shall all wish to act accordingly.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

The object of not only this Amendment, but also the one to page 23, line 15, is to provide that Clause 30 (3), which provides for payments in respect of the Crown user of inventions kept secret under the clause, shall also apply where secrecy is imposed under the Atomic Energy Act. I beg to move.

Amendment moved— Page 23, line 7, after ("section") insert ("or under section twelve of the Atomic Energy Act, 1946").—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

I think this is right. It merely remedies an omission from the Bill.

On Question, Amendment agreed to.

5.8 p.m.

VISCOUNT SWINTON moved to add to subsection (3): and if no such use of the invention has been made during the continuance in force of the directions the applicant shall be entitled to such sum by way of compensation as may be agreed upon between him and the Government department, or as may in default of agreement be determined by the court in like manner as if the dispute related to the use of an invention by a Government department.

The noble Viscount said: This Amendment is to meet what I think is a very reasonable point. If the Government call upon a patentee to manufacture, or use his patent for the purposes of manufacture, he receives compensation. But what may happen—and it may be perfectly reasonable—is that a patentee will take out a patent, and the Government will then say: "In the national interest this must be kept absolutely secret. We do not want to manufacture under it now, but we certainly do not want anybody else to do anything about it. In fact, we are going to sterilise it temporarily, and possibly permanently." There may be something of great value in the discovery, which may, however, be very dangerous and ought to be sterilised. So far as I can see, in that case the wretched inventor would get nothing. This provision may be a form of birth control—well, it is not birth control because it operates after the thing is born: it is a sterilisation. If a patentee receives compensation for what his invention breeds, he ought to receive compensation when it is sterilised. I am advised that these rather curious words are the correct way to give effect to that proposal. I beg to move.

Amendment moved— Page 23, line 13, at end insert the said words.—(Viscount Swinton.)

LORD LUCAS OF CHILWORTH

Again, this is an Amendment for which I have a great deal of sympathy, because it follows the admission which the noble and learned Viscount, Lord Simon, wrung out of me on the Second Reading that the Crown pay only if they use the inven- tion. But I cannot quite make sense of the Amendment, although I expect that is my fault. If the noble Viscount will read the last three lines he will see that it says: … or as may in default of agreement be determined by the court in like manner as if the dispute related to the use of an invention by a Government department. Any quarrel, such as the one we have had about Crown user, can go through an ordinary court of law, through the ordinary processes of cross-examination of witnesses and with the public present. Here we are dealing with a highly technical matter as to whether the invention shall be secret or not. Surely the Amendment cannot mean that we have to drag out in the courts of law, in front of the whole public, whether it shall remain on the secret list and all the reasons why it has so to remain.

VISCOUNT SWINTON

I do not think that was the intention. The proper authority to decide whether it shall be on the secret list is the Government—nobody else can decide that. This is intended to say that if it must remain on the secret list, then the man should get fair compensation.

LORD LUCAS OF CHILWORTH

Then I come to my second ground. First, it will be almost, if not completely, impossible to assess the value of an invention without it being worked and without it even being made. The noble Viscount will also realise this important point: to pay compensation in an indeterminate manner such as this would be right against Treasury policy. Not that I would argue that Treasury policy is sacrosanct. Our sympathy went to the extent that we quite realised that such an invention should not be sterilised permanently without very good reason. The noble Viscount will see that there is an Amendment down in my name which goes as far as we feel we can go in this matter: it is to insert a new clause after Clause 30. This is our alternative to the proposal of the noble Viscount: that an aggrieved party may make an application to the comptroller for a recommendation for the removal of his invention from the secret list. That will be passed to the Patent Appeal Tribunal which, as the noble Viscount knows, is a High Court judge. It is the same point.

VISCOUNT SWINTON

With great respect, may I say that it is not at all? That clause deals with an appeal by a patentee to have his patent removed from the secret list. That is not my point at all. My point is this. There may be an invention about which the Minister of Defence and the Chiefs of Staff would say: "This thing is of very great importance and must be kept secret, although we do not wish to use it." It is no good saying that I can have a right to appeal that it should be taken off the secret list, even if the case is heard in camera. If the Minister of Defence and the Service Chiefs say that it is vital it should be kept secret, and that we should not let a foreign country have it, then no inventor would ask that it should be used. I can imagine a case where, if an inventor took the thing to a potentially hostile foreign country, he would get a great deal of money for it. We have all heard of cases where it has been said: "This thing must not go abroad." In that case its value is difficult to assess, but there is not the least doubt that if it were not on the secret list but was in the open market, some foreign country might buy it at an enormous price.

LORD LUCAS OF CHILWORTH

I would not go so far as that, although I would agree that the inventor should be paid compensation. There might be two cases, in one of which the invention contained military matter alone, and in the other where it had some commercial content. By it remaining on the secret list, the inventor is denied the value of its commercial content. But if an inventor goes into the military field alone, and invents something which can be used and is applicable for use only in time of war and, therefore, must be kept secret, surely he should look for his remuneration as and when it is used. If he uses his inventive genius in that direction he knows all the risks. I am not concerned with that aspect. I am concerned with the man who invents something which has a commercial application as well, and who is denied the right to exploit it commercially because it is on the secret list. My Amendment is put down because I cannot see my way to accept the noble Viscount's Amendment. I wanted to offer some safeguard that these inventions are not to be on the secret list without good cause, and are not retained upon the secret list without good cause. There is an unhappy feeling in the mind of the public that Service Departments put things on the secret list without any regard for the rights of the subject, and that they retain these inventions on the secret list with even less regard. I am concerned to safeguard that point. Although I will admit that to that extent the noble Viscount and I are on different points, I cannot admit that compensation shall be paid.

VISCOUNT SWINTON

I do not see how the unfortunate man gets compensation, even if the thing has a commercial content.

LORD LUCAS OF CHILWORTH

Perhaps it would be as well if I went through the Amendment I have down, which says that it may be recommended by the Patent Tribunal that an invention should come off the secret list. If it comes off, then the patentee can commercially exploit it.

VISCOUNT SWINTON

I do not think we can carry this matter further to-day, but I want the noble Lord to consider this point. I am not at all satisfied. I am not a party to saying that Government Departments put things on the secret list unnecessarily—I was for too long a Service Minister and for too many years on the Committee of Imperial Defence to say that. My experience is that there was no foolish sterilising of that kind. On the other hand, we are now entering into a period where things may have a dual use. Take atomic energy for instance. I would say that the scales should be weighted in favour of retaining a thing on the secret list. I speak with some knowledge and experience on this matter, and I know it is not true that you can define the commercial content and the military content and say: "The commercial side of this invention shall be released, and the defence side shall be kept secret." In real life, it does not happen like that. Take radar and atomic energy. I should imagine that, in many cases, the same discovery and process which may have an enormous defence value is exactly the invention which has a commercial content.

The noble Lord's Amendment is, I think, a good one, but I am not greatly interested in it. All he says, in effect, is that he is making it easier to take an invention off the secret list. I am not excited about that; in dangerous times I would rather keep things on the secret list. If there is a doubt in the matter of security, the Services must have the benefit of the doubt. I do not suggest, of course, that an inventor should be deprived of what is due to him. Look at the risk one takes. The conscientious, patriotic man will not cause anxiety. But suppose you have the case of a man of not very definite allegiance who invents something (I am not trying to get one back at the Lord Chancellor!) and who thinks perhaps that "patriotism is not enough" and is prepared to sell his invention elsewhere. You are putting a very heavy temptation in the way of that man and taking rather a risk yourself. He may say "I will not patent this but I will go and sell it to someone abroad." I think this matter needs consideration.

LORD LUCAS OF CHILWORTH

If the noble Viscount cares to withdraw his Amendment I will see that the matter is considered. I fully appreciate his point: this has been the law of the land for ten years, but we have row moved into a state of peace. If the noble Lord withdraws his Amendment I will withdraw mine, and perhaps we can meet and discuss the matter between now and the Report stage.

VISCOUNT SWINTON

In view of what the noble Lord says, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH

My Lords, this is a drafting Amendment. I beg to move.

Amendment moved— Page 23, line 15, after ("section") insert ("or under section twelve of the Atomic Energy Act, 1946").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

VISCOUNT SIMON moved to add to subsection (5): Provided that this subsection shall not apply in respect of an invention for which an application for protection has first been filed in a country outside the United Kingdom by a person resident outside the United Kingdom. The noble and learned Viscount said: Perhaps I may be allowed to explain the situation here. The Government pro- posal is to prevent the export of an invention which ought to be kept secret in the national interest—and that is quite right. But consider another case, which often arises in practice. An American makes and patents an invention in America. His firm have their correspondents and associates here, and the arrangement is that this invention shall be patented by the British firm, not only here but in Europe. That is a common case. The practice is to wait until near the end of the year, because one wants to see whether there are any improvements in the invention and whether it works well. Therefore, shortly before the end of the year those concerned, acting through patent agents, want to patent the invention, as arranged with the Americans, here and in Europe. In a case like that, if you say that the invention must not be patented for six weeks—and I am told that in practice that is frequently done—it may greatly interfere with the fair interests of those who want to patent the invention at once.

Of course, nobody ought to be allowed to patent an invention at once if it is in the least likely to do any injury to the public interest. But the object of the whole of this clause is to secure that the first invention shall not be, as it were, exported until after an interval—during which, no doubt, in case of need a Government Department consider the situation. That is quite right. But that safeguard cannot apply where the invention is already being manufactured in America, for obviously it will also have been published. If the Government cannot accept this Amendment now, I suggest that instead of arguing about it at this stage we might ask for it to be looked at. I hope that I have explained the matter adequately. I am informed that what is proposed is a useful and practical thing to do, and that if something of the kind is not done injury will be inflicted upon perfectly honest people who want to do their best to assist the patentee. I beg to move.

Amendment moved— Page 23, line 31, at end insert the said proviso.—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I must say that for security reasons we do not like this Amendment, though we fully appreciate the whole of the arguments which the noble and learned Viscount has put forward. We are trying to find a way out and we have not yet been successful. If the noble and learned Viscount will withdraw his Amendment now, I promise that we will look at the matter again.

VISCOUNT SIMON

In view of what the noble Lord says. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 30, as amended, agreed to.

LORD LUCAS OF CHILWORTH

had given notice, after Clause 30, to move a new clause giving power to refer to the Appeal Tribunal for recommendations with regard to secrecy. The noble Lord said: I do not propose to move this Amendment.

VISCOUNT SWINTON

I think it would be a good thing to keep in mind the matter of security. And this Amendment does not meet my point about compensation for sterilisation.

LORD LUCAS OF CHILWORTH

I think we might be able to marry the two.

VISCOUNT SWINTON

I agree.

Clauses 31 to 33 agreed to.

Clause 34 [Proceedings by licensee for infringement]:

LORD LUCAS OF CHILWORTH

This is a drafting Amendment. I beg to move.

Amendment moved— Page 24, line 42, leave out ("the infringement of the patent") and insert ("any infringement of the patent committed after the date of the licence").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Clause 34, as amended, agreed to.

5.28 p.m.

Clause 35:

Threats of legal proceedings, and additional power to make declaration as to non-infringement

(2) A declaration that the use by any person of any process, or the making or use or sale by any person of any article, does not or would not constitute an infringement of a patent may be made by the court in proceedings between that person and the patentee notwithstanding that no assertion to the contrary has been made by the patentee, if it is shown—

1. (a) that the plaintiff has applied in writing to the patentee for a written acknowledgment to the effect of the declaration claimed, 697 and has furnished him with full particulars in writing of the process or article in question; and
2. (b) that the patentee has refused or neglected to give such an acknowledgment.

VISCOUNT SIMON moved, in subsection (2) after "patentee" (where that word first occurs) to insert: or, where it appears from the Register that any person is the holder of an exclusive licence under the patent, the patentee and the exclusive licensee. The noble Viscount said: I hope that this may be thought to represent a useful addition. There are cases in which there is more than one person with an interest in the patent. I imagine that the scheme of Clause 35 is intended to cover that case, and I wanted to make this point. The Amendment is to bring in the actual party who may be interested; there is no vice in it. I beg to move.

Amendment moved— Page 25, line 23, after ("patentee") insert the said words:—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I am pleased to accept not only this Amendment but the others which follow it, which apparently are consequential—with the proviso that when we get down to detailed consideration we must bear in mind that there may be drafting Amendments.

On Question, Amendment agreed to.

VISCOUNT SIMON

This Amendment is consequential. I beg to move.

Amendment moved— Page 25, line 24, after ("patentee") insert ("or any exclusive licensee").—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

This is also consequential. I beg to move.

Amendment moved— Page 25, line 25. after ("patentee") insert ("and to any exclusive licensee").—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

This again is consequential. I beg to move.

Amendment moved— Page 25, line 27, after ("him") insert ("or them").—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

This Amendment is also consequential. I beg to move.

Amendment moved— Page 25, line 30, after ("patentee") insert ("or any exclusive licensee").—(Viscount Simon.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH moved, after subsection (2) to insert: (3) The validity of a claim of the specification of a patent shall not be called in question in proceedings for a declaration brought by virtue of this section. The noble Lord said: This Amendment is submitted because I intended to accept, in principle, the next Amendment of the noble and learned Viscount, Lord Simon, and thought that perhaps this was better drafting. It covers completely the point which the noble and learned Viscount wishes to make. I beg to move.

Amendment moved— Page 25, line 31, at end insert the said new subsection.—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

I am glad of the agreement in substance. I wish this matter might be looked at for a moment or two. Possibly the noble and learned Viscount the Lord Chancellor may have a view about it. I have mentioned the point before. If your Lordships look at Clause 35 (2), you find that a declaration may be made that in carrying out a process, a person will not be infringing a patent. In practice, that has been thought by some people who have not understood it to amount to this: that the court in making such a declaration is saying that the patent referred to is a good patent. That is not so; it is just a confusion. Therefore, in my Amendment, I have put down these words: A declaration made under the last foregoing subsection shall contain a statement that nothing therein contained shall imply or be deemed to imply that the patent in respect of which the declaration is made is a valid patent. That, at least, states the matter in plain English. Though I defer with all proper modesty to the draftsman, I should not have thought that the words which he has suggested were an improvement. I should doubt whether "called in question is a suitable phrase to use in this connection, where the words suggested are: The validity of a claim of the specification of a patent shall not be called in question in proceedings for a declaration brought by virtue of this section. That is not quite the same thing. I agree that the validity of the claim will not be "called in question," but the point is that parties shall not be misled by somebody saying to them: "Oh, the question as to whether or not this patent existed came before the courts, and the courts decided that it did." Subject to what the Lord Chancellor, the noble Lord opposite and the draftsman may say, I should have thought that my words, for once, were perhaps rather better. I do not wish to be at all conceited or sure about it.

LORD LUCAS OF CHILWORTH

I thank the noble and learned Viscount. There is no difference in principle between these wordings. Would the noble and learned Viscount allow me to look at this again and see whether we can accept the words that he has suggested?

VISCOUNT SIMON

Let us both withdraw our respective Amendments, and put something down later.

Amendment, by leave, withdrawn.

Clause 35, as amended, agreed to.

Clauses 36 and 37 agreed to.

Clause 38:

Disputes as to inventions made by employees

38.—(1) Where a dispute arises between an employer and a person who is or was at the material time his employee as to the rights of the parties in respect of an invention made by the employee or in respect of any patent granted or to be granted in respect thereof, the comptroller may, upon application made to him in the prescribed manner by either of the parties, and after giving to each of them an opportunity to be heard, determine the matter in dispute, and may make such orders for giving effect to his decision as he considers expedient:

Provided that if it appears to the comptroller upon any application under this section that the matter in dispute involves questions which would more properly be determined by the court, he may decline to deal therewith.

VISCOUNT SIMON moved, in subsection (1), after "employee" (where that word occurs a second time) to insert "either alone or jointly with other employees." The noble and learned Viscount said: This is quite a simple point. Again, I hope that it can be dealt with at once. I am not sure that I was not referring to this just now, rather than to the earlier Amendment. You may have the case of an employee who is the only person who has made an invention, or you may have another case in which somebody else has joined with him in making the invention—there may be two people concerned. Of course, in that case you wish to cover the inventor's rights, whether he is alone or whether he has done it jointly with other employees. That is the sole object of the Amendment. I think it must be agreed in principle. I beg to move.

Amendment moved— Page 27, line 16, after ("employee") insert ("either alone or jointly with other employees").—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I am pleased to accept the Amendment, and also the next three that follow it, which are consequential.

On Question, Amendment agreed to.

VISCOUNT SIMON

This Amendment is consequential. I beg to move.

Amendment moved— Page 27, line 26, leave out ("If").—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

This again is consequential. I beg to move.

Amendment moved— Page 27, line 29, leave out from ("section") to the second ("the") in line 31.—(Viscount Simon.)

On Question, Amendment agreed to.

VISCOUNT SIMON

This is also consequential. I beg to move.

Amendment moved— Page 27, line 32, leave out ("so entitled") and insert ("entitled to the exclusion of the other, to the benefit of an invention made by the employee").—(Viscount Simon.)

On Question, Amendment agreed to.

Clause 38, as amended, agreed to.

Clause 39 agreed to.

Clause 40:

System of registration of designs

(2) A design shall not be registered under Part II of the principal Act unless it is new or original, and in particular shall not be so registered in respect of any article if it is the same as, or if it differs only in immaterial details or in features which are ordinary trade variants from, a design which before the date of the application for registration has been registered or published in the United Kingdom in respect of the same or any other article.

LORD LUCAS OF CHILWORTH

There are two Amendments to page 28, one to line 21 and one to line 25, where we have succumbed to the blandishments of the Chartered Institute of Patent Agents. In the draft Bill, we have used the expression at line 22: ordinary trade variants. The Chartered Institute of Patent Agents would like us to use the expression: variants common to the trade. As we have no objection, and they seem to think that this is a matter of some substance, we are only too pleased to fall in with their wishes. I beg to move.

Amendment moved— Page 28, line 21, leave out from ("as") to ("a") in line 22.—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

I am glad of this Amendment, especially as it happens to be the form of words which Mr. Swan's Committee themselves suggested.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This Amendment I have already referred to. I beg to move.

Amendment moved— Page 28, line 25, at end insert ("or differs from such a design only in immaterial details or in features which are variants commonly used in the trade").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

VISCOUNT SIMON moved to add to subsection (2): which is of a similar description having regard to its general character and use. The noble and learned Viscount said: I am sorry I have not given notice of this Amendment before, though the point will not be unknown to the Government. We have now passed from patents to designs. I speak most sincerely when I say that the noble Lord, Lord Lucas of Chilworth, has shown such a grasp of the patents part of the Bill, and has so filled us with admiration for his diligence and understanding, that I can only hope he is equally at home with the subject of designs. I myself have, in times past, found designs an even more crabbed subject than patents, although I have had something to do with one or two decisions about them. The words which I propose to add to the subsection seem to be absolutely necessary. It is not clear to me why they have been omitted in the draft of the Bill. The Swan Committee, which referred to "other articles," described them as articles of a similar character having regard to their general character and use.

This subject of designs is also rather comical, so I may be forgiven for quoting an example. You may have a design which has been propounded in respect of a hot water radiator panel. It may be strikingly original, and a perfectly good design to register, as compared with all previous radiators, yet it may be very like a design to be found on the cover of a slab of chocolate. It is not a had design on that account, but what is meant, I think—and it is what Mr. Swan's Committee supposed was meant—is that the reference should be to another article which is of a similar description having regard to its general character and use. If that is not so, I think you will find that some rather absurd contrasts will arise. I do not know whether it has been, possible (probably it has not) to consult others about my Amendment, which I am, sorry to say has not been put down before, although I had thought about it. If so, we had better leave it. I feel fairly confident that when the noble Lord consults the authorities with whom he is dealing, they will think that this is supported by the Swan Committee and is right. I beg to move.

Amendment moved— Page 28, line 25, at end insert ("which is of a similar description having regard to its general character and use").—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I would appreciate a little time to consider this matter. The noble Viscount handed his Amendment to me only as we came into the Chamber. I think it needs consideration. I will pay due regard to all the noble and learned Viscount has said, and perhaps I can consult with him if there are difficulties.

VISCOUNT SIMON

Yes. I am very much obliged.

Amendment, by leave, withdrawn.

Clause 40, as amended, agreed to.

Clause 41 agreed to.

5.41 p.m.

Clause 42:

Effects of copyright and legal proceedings

42.—(1) The registration of a design under Part II of the principal Act shall give to the registered proprietor the copyright in the registered design, that is to say, the exclusive right in the United Kingdom and the Isle of Man to make or import for sale or for use for the purposes of any trade or business or to sell, hire or offer for sale or hire, any article in respect of which registration subsists and to which the registered design or a design not substantially different from the registered design has been applied.

VISCOUNT SIMON moved, in subsection (1) to omit all words from and including "exclusive right" down to and including "hire" and to insert: right to exclude others in the United Kingdom and the Isle of Man from making or importing for sale or for use for the purpose of any trade or business or from selling, hiring or offering for sale or hire.

The noble and learned Viscount said: This Amendment is designed merely to secure that the language which we use correctly expresses what we mean. When we are dealing with the subject of designs I am not sure that that is always so. I think it can be fully shown that the definition which is in Clause 42 should be reconsidered from that point of view. It might be sought to justify these words because there is something, like them in the Copyright Act, with which, when I was Solicitor-General, in the year 1911, I had a good deal to do. But copyright and designs are not the same thing, and with great respect I think the words do not accurately represent what is meant. The words: shall give to the registered proprietor … the exclusive right … to make seem to suggest that he need not worry about prior registration or prior monopolies of any kind but that he has the right, to the exclusion of others, to make the design there referred to. That is not really so, for a reason which I will explain in a minute but which is perhaps a little subtle. A man may produce a design which is a perfectly good design to register because it is original and satisfies the definition in Clause 41, and yet it does not in the least follow that he will be entitled under that registration to make it. It may easily be only in the nature of a new design to be applied to a previous design which does not belong to him at all but which is, in fact, the exclusive design of somebody else. In that event it is no good having a new registration of what he has invented, because it is a filigree to be put on something which has itself a design attached to it and which he has no right to use.

Therefore the real meaning is not that by registering the design you get the right to make the thing; the real meaning is that you get the right to exclude others in the United Kingdom from making or importing for sale or for use for the purposes of any trade or business, or offering for sale or hire, the thing in question. It is a very fine point, but I hope I have made it plain. There may be what may be called previous design A, which is somebody else's, and a man may correctly register what is really complementary to that, an original design, B; but it does not follow that because he does so he obtains the right to make anything. His right is to prevent other people using B; but he may not be able to use B himself unless he gets a licence from the man who has the right to use A. I will not say more. I beg to move.

Amendment moved— Page 29, line 3, leave out from the second ("the") to ("any") in line 6, and insert the said new words.—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I am grateful to the noble Viscount. I think we shall have to take this back and look at it again in the light of what he has said. But I have stumbled over something that the noble Viscount has not mentioned, and perhaps he will give me the benefit of his opinion upon it. I stumbled over his words "the right to exclude others in the United Kingdom and the Isle of Man from making …," as opposed to what is in the Bill—namely, "the exclusive right in the United Kingdom and the Isle of Man to make or import …." I wondered whether his wording was not going to bring in the question of domicile, which I know is not his intention.

VISCOUNT SIMON

It would have nothing to do with domicile.

LORD LUCAS OF CHILWORTH

If the noble and learned Viscount is agreeable, we will take it back and look at it again.

VISCOUNT SIMON

I am much obliged. The order of words may not be the best, but at least I think I can say that domicile has nothing in the world to do with it.

LORD LUCAS OF CHILWORTH

I know that.

Amendment, by leave, withdrawn.

VISCOUNT SIMON

had given notice of his intention to move an Amendment to subsection (1), after "subsists" to insert "or any article of a set of articles in respect of which registration subsists." The noble and learned Viscount said: Is not this agreed?

LORD LUCAS OF CHILWORTH

There is an Amendment immediately following which covers the same point. I was rather hoping that if I agreed to the noble Viscount's Amendment in principle, he would agree to accept mine.

VISCOUNT SIMON

Is it another case of the draftsman wishing to say the same thing in a slightly different form of words?

LORD LUCAS OF CHILWORTH

Yes.

VISCOUNT SIMON

. Was there something wrong with mine?

LORD LUCAS OF CHILWORTH

I do not know, but I am told he would prefer his words.

VISCOUNT MAUGHAM

In my opinion they are exactly the same.

VISCOUNT SIMON

Nevertheless, the noble Lord prefers what the draftsman wants. Let me at once concede the point to that almighty authority.

LORD LUCAS OF CHILWORTH

I beg to move my Amendment.

Amendment moved— Page 29, line 7, leave out ("and") and insert ("or any article of a set in respect of which registration subsists, being an article").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

had given notice of his intention to move to add to subsection (1): and the exclusive right in the United Kingdom and the Isle of Man to do anything with a view to enabling any such article to be made or sold as aforesaid, whether in the United Kingdom or the Isle of Man or elsewhere". The noble Lord said: In view of the discussion we had upon the previous Amendment, if the noble and learned Viscount will agree, perhaps I had better take this one back and look at it again. They all go together and are really concerned with the same subject.

VISCOUNT SIMON

Yes.

Clause 42, as amended, agreed to.

Clauses 43 to 45 agreed to.

Clause 46 [Appeals from decisions of the comptroller]:

LORD LUCAS OF CHILWORTH

This is not much more than a drafting Amendment. I beg to move.

Amendment moved— Page 30, line 38, after ("Act") insert ("or section twenty of this Act").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Clause 46, as amended, agreed to.

Clause 47 [Increase of number of judges of High Court]:

On Question, Whether Clause 47 shall stand part of the Bill?

VISCOUNT SIMON

This is the clause dealing with the appointment of an extra judge. I must respectfully entirely agree with the provision in the Bill. I should not agree with it if, indeed, it were in the terms of the Explanatory Memorandum. The Explanatory Memorandum says: Clause 47 provides for the appointment of an additional puisne judge who will deal primarily with patent cases. I do not think it is a matter for the Statute Book to say what this judge shall deal with. I entirely believe that the Lord Chancellor will appoint the best person, but I do not think he will give him patent cases and nothing else.

Clause 47 agreed to.

Remaining Clauses agreed to.

First Schedule [Minor and consequential amendments of principal Act]:

LORD LUCAS OF CHILWORTH

The Amendments to page 34, line 21, and to page 44, line 37, are to make clear the extension of the power of postponement to cover cases within Section 22 on the question of the revocation on a counterclaim. I beg to move.

Amendment moved— Page 34, line 21, after ("subsection (2)") insert ("or subsection (7)").—(Lord Lucas of Chilworth.)

VISCOUNT SIMON

We can accept all these.

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

I beg to move.

Amendment moved—

Page 44, line 37, at beginning insert— ("After the words 'think fit' there shall be inserted the words and may postpone the operation of any other order made in the proceedings during such period as may be required to enable the amendment to be made'.")—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

I beg to move.

Amendment moved— Page 46, line 43, leave out from ("and") to end of line 46 and insert ("paragraph (c) shall be omitted").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This is really a drafting Amendment to the amendment which is proposed to be made by the Bill to the principal Act. On re-consideration we came to the conclusion that the wording in the existing Act was, after all, preferable. This Amendment seeks to put the matter right. I beg to move.

Amendment moved— Page 47, line 25, leave out ("the words "a patent in respect of"").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

The next is purely a drafting Amendment. I beg to move.

Amendment moved— Page 48, line 36, after ("contract") insert ("relating to the patent").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

VISCOUNT SIMON moved to add to the proposed amendments of Section 41: After subsection (1) there shall be added the following subsection:— (2) A claim of a complete specification shall not be deemed to have been invalidated by reason only that before the priority date of the claim the invention was publicly worked in the United Kingdom for the sole purpose of reasonable trial and experiment (such working being reasonably required having regard to the nature of the invention) either by the patentee or applicant for the patent or any person from whom he derives title or any other person with the consent of the patentee or applicant for the patent or any person from whom he derives title.

The noble and learned Viscount said: I think this Amendment is important. Of course everyone will agree, and the Statute law so provides, that within limits trial and experiment shall not prevent a man getting his patent after the trial and experiment have shown him that his invention works and is worth patenting. Everyone agrees about that. But as things are I do not think that is clearly stated in the Statute, even though the test which the man applies can be made only in public. Prima facie, no one who wants to patent anything is likely to make experiments in public, because other people may see the experiment and endeavour to appropriate the idea. But there are cases in which trial and experiment cannot be made unless they are made in public I need not give illustrations of this; they will readily occur to your Lordships. But that is not a good reason for saying that a man cannot obtain a patent. The proper limitation, I venture to think, should be the one I have put down here. It is only to be … reasonable trial and experiment (such working being reasonably required having regards to the nature of the invention) …

I do not think that those who are concerned particularly with patents or those concerned with the framing of legislation will doubt that this is a provision which ought to be made, in order that there should be no doubt about the situation. At present, it is by no means clear that if a thing is done in public it is covered by any of the existing protections. I hope that the noble Lord will find it possible to accept this Amendment, but if anything is said afterwards I shall understand that his acceptance is only provisional. I beg to move.

Amendment moved— Page 48, line 50, at end insert the said words.—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

I am afraid that I shall have to ask the noble and learned Viscount to withdraw this Amendment now, but I will under- take to consider the matter. Two questions arise upon this. As the noble and learned Viscount has said, this is an addition to the existing law—it is something which has never been done before. This point was not considered by the Swan Committee which, therefore, made no recommendation upon it. It will have to be considered from that angle. The next angle from which it will have to be considered is this: if it is proper to alter the law in this respect, is this the best way of doing so? I suggest that this might make for more confusion and give rise to considerable argument and uncertainty as to the exact extent of commercial working which could be said to be reasonably required for "reasonable trial and experiment." It provides no time limit for the working before the application for a patent.

VISCOUNT SIMON

I am willing to agree to the noble Lord's suggestion.

VISCOUNT MAUGHAM

The necessity for some such words as my noble and learned friend has put down is, I think, clear. The law as it at present exists is not considered by most people to be by any means perfect. For instance, there are cases where some public user will invalidate a patent, and that cannot be avoided. Suppose that it was a case involving a patent for an explosive. You cannot explode something almost as powerful as an atom bomb in a laboratory; you have to do it publicly. I am not sure that as matters stand that would not invalidate the patent. At any rate, I think this is a case which the noble Lord, Lord Lucas, will be very wise to have fully considered.

LORD LUCAS OF CHILWORTH

I am grateful to the noble and learned Viscount for that intervention. I have in mind the case which was mentioned during Second Reading—of the Haskell golf ball. Your Lordships will recall how a dear old gentleman took a ball around which he had twisted long strands of rubber, and hit it about St. Andrews to such effect that he was able to collect a number of half crowns from hard-headed Scotsmen. When Mr. Haskell arrived from America with the proper ball, he could not patent it because of prior user by the dear old gentleman, who, in all probability, after hitting his ball a few times around St. Andrews, and, as I have said, winning a number of half crowns, threw it away.

VISCOUNT SIMON

If it really was the case that a dear old gentleman, by hitting a golf ball round St. Andrews, managed to extract a number of half crowns from Scotsmen, that was not an invention—it was a miracle! I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH

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

Amendment moved—

Page 50, line 37, leave out from beginning to ("any") in line 38 and insert ("For subsection (3) there shall be substituted the following subsection:— '(3) The comptroller may refuse'").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

We have put this Amendment down at the instigation of the Chartered Institute. I hope that it will be acceptable to noble Lords opposite. I beg to move.

Amendment moved—

Page 53, line 25, leave out from beginning to end of line 31 and insert ("For paragraph (b) of subsection (1) there shall be substituted the following paragraph:— '(b) for the grant of a compulsory licence in respect of the design on the ground that the design is not applied in the United Kingdom by any industrial process or means to the article in respect of which it is registered to such an extent as is reasonable in the circumstances of the case'").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

VISCOUNT SIMON

This next Amendment is really only to ensure that what was intended is made clear. It appears that the words as they are in the Bill would have had an effect which cannot be desired. As the words stand, I think the result would be that there would or might be excluded from audience the patent agents in cases where at present patent agents can be heard. It was not intended that the Bill should do anything of that kind. If the noble Lord and his advisers will look at this, they will see that by rearranging tat words as I have done in this Amendment to page 60, line 53, the right of audience of patent agents will be preserved. It might not be necessary, therefore, in all cases to employ counsel or solicitors. That is the effect of the change. I beg to move.

Amendment moved— Page 60, line 53, leave out ("for") and insert ("there shall be omitted from").—(Viscount Simon.)

LORD LUCAS OF CHILWORTH

For the reasons stated by the noble and learned Viscount, I shall be pleased to accept this Amendment and the one which follows it. But I would make the proviso that on looking at it we may feel some modest alteration is required at the Report stage.

On Question, Amendment agreed to.

VISCOUNT SIMON

I beg to move the next Amendment.

Amendment moved— Page 60, line 53, leave out from ("(c)") to the first ("the") in line 54 and insert ("the words 'and the awarding of costs' and there shall be added at the end of the subsection").—(Viscount Simon.)

On Question, Amendment agreed to.

6.0 p.m.

VISCOUNT SIMON moved, in the proposed amendment of Section 93 to substitute for the proposed new definition of "invention." 'invention' means any manufacture the subject of Letters Patent and Grant of Privilege within section six of the Statute of Monopolies which is new or alleged to be new and includes without prejudice to the generality of the foregoing any article produced by manufacture and any method or process of manufacture or of testing applicable to the improvement or control of manufacture being an article method or process which is new or alleged to be new.

The noble and learned Viscount said: This Amendment concerns what is probably the most interesting point in the whole law of patents, and the most difficult. What do we mean by "invention"? Anyone who has had to deal with this matter, to say nothing of the noble Lord who has made himself such a master of this subject, will know that it is not easy. The difficulty I feel about the Government's new clause is that it proposes to substitute a new definition for the old definition; not to take the old definition and all the case law connected with it as a provision which stands subject to amplification or elucidation, or whatever you like to call it, but to strike it out and substitute a new one. I speak on this subject with proper modesty, because I do not claim to be a complete expert, though I have had a good deal to do with patents in my time; but I defy anybody with wisdom at this time to write down on paper the best definition of "invention." It has been expounded over a great many years and, as the noble Lord and the noble and learned Viscount the Lord Chancellor know, it goes back to the Statute of Monopolies of James I. We might just as well propose at this time of day to have a new definition of "charity" and have nothing to do with the Statute of Elizabeth. I do not think that the noble and learned Viscount is likely to propose that, because there is an immense case law about the subject and great judges and authorities have gradually built up what is meant.

Perhaps I may be forgiven if I tell the House of an experience of my own in the days when lawyers had to sit on appeal from the Comptroller of Patents. That was an extraordinary function, but they had to do it. I have sat many times on appeal from refusal of the Patent Office to grant patents. I remember that one day, after dealing with half a dozen appeals, I was told that there was one more case and the litigant was appealing in person. He had been refused a patent for what he held to be the discovery of squaring the circle. I said to him, "Well, sir, I daresay your mathematical deductions are very valuable, but I have to tell you that that kind of discovery is not an invention which can be patented." I am not at all sure that he was entirely level-minded. He showed the greatest annoyance. I told him, "After all, Isaac Newton discovered gravity, but he could not patent it. Pythagoras discovered the forty-seventh Proposition in the First Book of Euclid, but he could not patent it." He looked very disappointed and asked, "If that is so, where is my reward?" I said to him, "Sir, your reward is in the gratitude of posterity." He went away saying that that was tie first kind thing anybody had said to him since he had made his discovery.

To attempt to define an invention is a very dangerous thing to do at this time of day. Instead of attempting to do that, we should accept the substance of the Government's proposal by including it as a piece of elucidation and not as a piece of exhaustive definition. I feel confident that that would be the view of most of the authorities whom the noble Lord may consult—I mean by "authorities" those who have been familiar with the work of administering patent law in the Law Courts. I hope this point will be carefully considered, because otherwise most serious consequences might follow which nobody desires and nobody intends.

Amendment moved— Page 61, line 19, lease out from beginning to end of line 23 and insert the said new words.—(Viscount Simon.)

VISCOUNT MAUGHAM

I am not prepared to express myself with any arrogance or certainty, but this, as the noble and learned Viscount has said, is one of the most difficult problems in the whole of the law relating to patents. What is an invention? We get on pretty well in the courts, but when we try to define what it is we find it a little difficult. I have no doubt the noble and learned Viscount has some reason for putting down his Amendment, but one thing in line 4 rather perturbs me. It says, "which is new or alleged to be new." Surely it has to be new. There should be no mere allegation that it is such. Another point which should be considered is this. I do not like the limiting of an invention by calling it a "manufacture," because I am not sure that that covers an improvement in an existing process. There are patents granted for small improvements, say in the degree of temperature, where it may be said that there is no invention but where it has been held that there is. I should like it to be considered whether we ought not to add something in my noble and learned friend's words to cover improvements, or to show that they at any rate are not left out. I think my noble and learned friend has taken the rest of the words as they stand in the Bill; I do not think there is any alteration after the words "without prejudice to the generality of the foregoing." The result is, I think, to restrict the number of things which can be patented. But I am not sure whether it restricts or enlarges.

VISCOUNT SIMON

My noble and learned friend's comments will be considered. May I explain that if he will turn to page 61 of the Bill, he will find the proposal that "For the definition of 'invention' there shall be substituted the following definition." The definition pro- posed uses, as the Statute of Monopoly used, the word "manufacture," and this includes "improvement." I am suggesting that it is unwise to strike out the whole of the existing law on this subject and try to write it down in five lines, however carefully drafted. I should have thought it much wiser to keep the present law and all that has been done to explain and expound it and add something which is intended, without prejudice to the generality, to have the effect of the words proposed in this Amendment.

The problem of how far manufacture is essential to invention is as old as the hills. It existed under the Statute of Monopolies of James I and has existed ever since. As nobody knows better than the noble and learned Viscount, the difficulty is that there are eases where it is extremely difficult to say when a manufacture is not patentable. For example, in Cheshire, brine is brought out of the subsoil by flooding a mine with water and pumping it up, and it is used to produce salt. Is that a manufacture of salt? A still more recent case, which may be familiar to those interested in this subject, is due to recent developments in physical science. In recent years articles have been patented which are extremely difficult to define as "manufactured" in the sense of being vendable products. For instance, the B.B.C. now send out a signal which involves waves of a certain frequency which will be heard at a distance, and, as it were, varied in the same message, waves of a shorter frequency which can be amplified by those who have the right instruments, so that you can send a secret message at the same time as you appear to be sending a public message. I think that was used to great effect during the war. Is that a manufacture? All that has been expounded, of course, in many cases recently. A very well-known judgment has been given on that point by Lord Justice Evershed. Is it not a dangerous thing to say: "I will scrap all that, and the draftsman will give me five lines which will define 'invention'." I say that that should not be done, and that it is much better to rely on this slowly expounding but very scientific exposition. By all means add suitable words which, without prejudice to the generality of things, will make the position plain. I do not expect this to be decided here and now, but the point is very important. It is practically the last point of substance in the Bill with which we have to deal, and I apologise for having taken so much time on what is a very technical subject.

VISCOUNT MAUGHAM

I want merely to say that something should be considered. Therefore, I am not at all disturbed by what my noble and learned friend has said. The phrase "or alleged to be new" occurs in both places, and also in the Bill.

LORD LUCAS OF CHILWORTH

As the noble and learned Viscount has said, this is the last item of substance in the Bill, and I am sorry that he and I cannot part wreathed in smiles, having come to a happy understanding on this. The noble and learned Viscount has said that this matter has received very careful consideration, and that change must come at some time. Against the noble Viscount's Amendment we have the 100 per cent. support of the Swan Committee. The definition of "invention" was fully considered by them. In paragraphs 124 and 125 of their Final Report, at page 28, they say this, talking about criticisms: We feel the force of these criticisms, and we think that an attempt should be made to bring the definition of 'invention' into closer relation with the progress of modern science and industry by enlarging the existing definition sufficiently to include inventions of the character above referred to.

VISCOUNT SIMON

That is just what I have been saying. It does not there say "substitute" a new definition for the old one, but "enlarge" it.

LORD LUCAS OF CHILWORTH

The Swan Committee go on to say: We therefore recommend that the definition of 'invention' in Section 93 be amended in such a way as to make it clear that any new method or process of testing applied for the purpose of improving or controlling manufacture may be treated as coming within the expression 'manner of new manufacture.' The Swan Committee came to the conclusion that the existing definition—the one which the noble and learned Viscount has mentioned—is open to criticism on several grounds, one being that the terminology is "archaic"—that is the expression they use. The Statute of Monopolies was enacted in 1624, as the noble and learned Viscount said, at which date the meaning of the words "manner of manufacture" was probably very different from their meaning at the present time.

VISCOUNT SIMON

The noble Lord will forgive me for interrupting. I am quite familiar with these matters. The noble Lord, with great respect, has not understood what I was saying. There is all the difference in the world between preserving a definition and amending it by addition, which is what the Swan Committee recommended. The Bill as it is drawn proceeds to repeal the definition. That is something which I should have thought very unwise. I have not the slightest doubt that the note before the noble Lord is full of wisdom, but I am sure that what I am saying will receive considerable support from noble Lords in this House with experience in these matters.

LORD LUCAS OF CHILWORTH

As the note I have is full of wisdom, perhaps the noble and learned Viscount will not mind if I go on quoting from it.

VISCOUNT SIMON

Not at all, so long as the noble Lord understands it.

LORD LUCAS OF CHILWORTH

The definition we have arrived at, after very careful consideration, has been arrived at in reference to the decisions and expressions of opinion in the courts. It does not make any reference to the Letters Patent or to the terms of Section 6 of the Statute of Monopolies. My advice is that this method is to be preferred to that suggested by the noble and learned Viscount. I do not for one moment think that he would put forward the statement he has made, with such force as to deprecate my apparent contradiction of it, unless he felt very strongly on this. Therefore, I am going to offer to take it back and look at it again, and bring to my advisers' attention the observations which the noble and learned Viscount has made, and also the observations of the noble and learned Viscount, Lord Maugham. The noble and learned Viscount the Lord Chancellor, who is my chief adviser in these matters, will no doubt give his opinion again upon what should be in the Bill. If the noble and learned Viscount will withdraw his Amendment, I will undertake to have the matter looked into between now and the next stage.

VISCOUNT SIMON

I am very glad to do that. As this is the last occasion on which I, at any rate, have to intervene, I hope I may say most sincerely that I thank the noble Lord for all the help he has given, certainly to me and, I think, to all noble Lords in the House. We all greatly admire the way in which he has grasped this subject, and from time to time expounded it. I deprecate a little his relying on a note which has really been written under a misapprehension. If the noble Lord will himself—never mind about his advisers—look at paragraph 125 of the Swan Report, which I know perfectly well, he will find that what the Swan Committee recommended, I should have thought most sensibly, was that the definition in Section 93 should be amended in order to make something in it perfectly clear. I think the noble Lord will see from that paragraph that that is not what this Bill does. This Bill does not amend, but repeals; it does not make something clear, but seems to suggest that you can write down in five lines what is meant. If the noble Lord will consult Mr. Swan, or the noble and learned Lords, Lord Morton, Lord Maugham or Lord Simonds, or any other great lawyer who has considerable experience of this, I feel sure they will tell him that it is much better to leave the definition itself on the Statute Book, though it would be right to follow the advice of Mr. Swan and amend it in the way suggested. That is the sole point of my suggestion. I should be sorry to end this long co-operation in anything but the best of tempers, and therefore, with all good will, I agree with the course he suggests, and beg leave to withdraw the Amendment.

THE LORD CHANCELLOR

Before the noble and learned Viscount withdraws the Amendment, I would just like to say this. I will gladly do what I can to have this matter looked into. My noble friend Lord Lucas said that I am his chief adviser. In some sense I am; but only in some sense. It occurred to me once or twice in the course of our discussions that some slight criticism was made of the Parliamentary draftsmen, as though they had been a little over-insistent in adhering to their views. May I give this illustration? On page 7 of the Marshalled List of Amendments, there are Amendments to Clause 42 dealing with a set of articles in respect of which registration subsists. If your Lordships look at the Order Paper you will see that the Parliamentary draftsmen's form is down first, and the second one, which is starred on the list, is that in the name of the noble and learned Viscount, Lord Simon. It was not that the Parliamentary draftsmen had made some trivial alteration, and disliked anybody else's efforts; it was rather that the noble and learned Viscount, for some reason, had made some Amendment to that which the Parliamentary draftsman had already put down. I think it worth while pointing that out, because we always rely so greatly upon the services of these people to carry out our instructions and to put the thing in the right way.

VISCOUNT MAUGHAM

Perhaps as I have constantly complained of the drafting of Bills which come here, I should say that this one of the exceptions. I think this is an exceedingly well-drafted Bill.

Amendment, by leave, withdrawn.

6.22 p.m.

LORD LUCAS OF CHILWORTH

In moving this drafting Amendment, may I express my great appreciation of the kind remarks of the noble and learned Viscount? It has been a rather exhausting experience to pit me against the noble and learned Viscount, ably aided and abetted by the noble and learned Viscount, Lord Maugham, and (as if that were not enough) against the noble Viscount, Lord Swinton. I take the words of the noble Viscount as a very high compliment indeed. I beg to move.

Amendment moved—

Page 61, line 24, leave out from beginning to end of line 26 and insert ("for the definition of 'inventor' and 'applicant' there shall be substituted the following definitions:—— 'inventor' includes the personal representative of a deceased inventor; 'applicant' includes a person in whose favour a direction has been given under section ten of the Patents and Designs Act, 1949, and the personal representative of a deceased applicant.")—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

First Schedule, as amended, agreed to.

Second Schedule agreed to.

Third Schedule [Transitional Provisions]:

LORD LUCAS OF CHILWORTH

This first Amendment is a matter of drafting. I beg to move.

Amendment moved— Page 64, line 10, after ("of") insert ("sections eleven and twenty-six of").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This Amendment is little more than drafting. I beg to move.

Amendment moved— Page 64, line 41, leave out from ("specification") to ("become") in line 42, and insert ("filed before the commencement of this Act has").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

LORD LUCAS OF CHILWORTH

This Amendment is complementary to the Government Amendment to Clause 34, and provides that the new powers given by that clause to an exclusive licensee to take infringement proceedings shall not apply to infringements committed before the commencement of this Act—for example, before he had any statutory right to sue. This clears up a doubt which might arise without the Amendment. I beg to move.

Amendment moved—

Page 65, line 18, at end, insert— ("16. Section thirty-four of this Act shall not apply in relation to any infringement of a patent committed before the commencement of this Act").—(Lord Lucas of Chilworth.)

On Question, Amendment agreed to.

Third Schedule, as amended, agreed to.

House resumed.