§ 3.43 p.m.
§ Debate on Second Reading continued.
§ LORD BALFOUR OF INCHRYE
My Lords, when the Postmaster General intervened to make his important statement I was endeavouring to prove to your Lordships that the provisions of this Bill would violate the customary sanctity of commercial contracts, and I had just given an example where the Government had taken over from one manufacturer in this country his designs and his "know-how" and handed them over to his rival. I said that as I understood the Bill, the first manufacturer would be unable to sue because of the provisions in Clause 2 (1), which says that the Bill overrides any contract made between any two such manufacturers. My main criticisms of this Bill are that the Bill contains no machinery whereby those who have developed and manufactured goods, either for defence or for services of the Crown, can question the Government's absolute right to take over their work. All the Bill does is to provide machinery whereby the inventor or manufacturer can appeal against the financial proposals of compensation from the Government for the requisitioning by the Government. If the inventor or developer cannot arrive at an agreement with the Government—I presume the Treasury would be the Department with which he would negotiate—then there is provision for arbitration.
I think that is manifestly unfair for three reasons: first, it puts the citizen (in using the word "citizen" I mean either an individual or a corporation) entirely into the hands of the Executive so far as concerns the removal and the 788 placing of his work elsewhere. Secondly, it puts him in the impossible position of having to prove not only financial loss to himself by the Government's action, but problematical future financial loss through the future use of his inventions by those to whom those inventions have been handed. I believe that to be an impossible thing to expect anybody to prove. Thirdly, in the case of defence goods or processes requisitioned (I use the word "requisitioned" broadly) by the Government and given to a foreign Government or contractor, there is the danger that what was given for defence will in fact be used in that foreign country for civil purposes, with no possibility of redress at all by the developer or the maker over here.
The Government have given assurances that they will allow ample time for consultation with representatives of industry before proceeding with further stages of this Bill. That is a most satisfactory assurance for us to receive, but it does not entirely expunge our regret that the consultations which are now to take place did not take place before the Second Reading. I should like to ask the Government, if the Bill to-day obtains a Second Reading from your Lordships' House, whether they will please not proceed with the further stages until all responsible industrial bodies who wish to make representations—not a few, but all—have had time to make those representations. It is unfair to expect industry to consider, digest, and give opinions upon such an important measure, affecting our home and export trades, in the limited time which so far has been available.
My own view is that somewhere in the Bill there should be inserted a provision whereby some form of tribunal would act as a checking point to the Government's proposed absolute and complete power to say what is or is not required for defence purposes, and what are or are not goods required for the services of the Crown. If some such checking point were instituted, it would give the corporation or the individual some appeal beyond merely questioning the financial compensation offered as redress, and it would also afford opportunity for representations to be made as to whether or not the Government should in fact take his invention or process. This checking point could have a further use, namely, to restrict in some form the indiscriminate distribution by 789 the Government of what has been requisitioned. I do not wish to rake up old troubles, but it was under similar powers to those in this Bill that the Nene jet engine went to Russia and gave a large step forward to Russian jet engine development, as we all acknowledge now. Responsible industry should have some checking point to which they could go and make representations, before the Executive are allowed to use these absolute powers. I thank your Lordships for your consideration and kindness in allowing me to develop these points in a very complicated and technical Bill which it is not easy for a layman to speak upon, but I believe this Bill to be of such importance that it justifies consideration from every quarter of this House.
§ 3.50 p.m.
My Lords, I know that the House is anxious to get on to the next item, in which I myself am interested, so I propose to say only a few words on this Bill. As outlined by the noble Lord, Lord Mancroft, in his interesting and eloquent speech, it seemed to be a very simple Bill. But, having listened to the speeches subsequently made in this debate, it does not now appear to me to be so simple as it sounded when it was explained by Lord Mancroft. The noble Lord referred, in his closing remarks, to the liberties of the subject. In that he was quite right. This Bill, in my view, represents a substantial invasion of the liberties of the subject, and that has been brought out in the debate.
One of the matters which interested me as much as any that have been touched on was a point brought out and developed by the noble Lord, Lord Balfour of Inchrye. Lord Mancroft, your Lordships will remember, spoke of exports to China and of licences issued by the Board of Trade to British industry for exports to China. I am interested in a body called "C.O.C.O.M."—I forget its full title: we all know these bodies by initials. Now C.O.C.O.M. is a body which sits in Paris, and about it I have already expressed some apprehensions. Apprehensions undoubtedly exist in British industry that in the consultations which take place inside C.O.C.O.M., as between representatives of this Government and of other Governments, information in relation to British commerce and the activities of 790 British traders is passed across to some of our competitors. It is suggested that these competitors may use it—I do not say that they do—to their own advantage. As I understood Lord Balfour of Inchrye, it was that point which he stressed in relation to this Bill. I hope that the noble Lord, Lord Mancroft, will consider this point—though of course I shall not expect him to deal with it in detail in his reply to-day. I hope that he will consider it, and will try to make certain that it will not be possible, under any of the clauses of this Bill, for information to be passed across to our competitors and used by them to their advantage and to the disadvantage of their British rivals.
That is all I have to say, except this. I would add my plea to those already made to the Government that ample time should be given for consideration of this Bill before the Committee stage. This was stressed by the noble Lord, Lord Balfour of Inchrye, and, like him, I trust that time will be given for British industry to consider this Bill in all its aspects. I hope that Lord Mancroft will at least be able to satisfy us in that connection when he replies to-day.
§ 3.53 p.m.
§ VISCOUNT SIMON
My Lords, I am reluctant to interpose in this debate, in view of the importance of the discussion which is about to take place on the Committee stage of my noble friend Lord Templewood's Bill, for which many people here are waiting; but I must ask leave to make an observation. I remember very well the discussion which took place on the Patents Act, 1949. I took a leading part from the Opposition side in shaping that Bill and in getting it changed by the noble Lord, Lord Lucas of Chilworth. Section 46 is the section which applies during any emergency period, and all that I quite understand. But I also have a recollection of another and a later debate which we had in this House on the subject of the continuance of emergency legislation. The present Lord Chancellor made a very important speech on that occasion, and, if I recall it aright, he referred to the Emergency Regulations in connection with patents and pointed out that some of these might require to be preserved in permanent legislation. Unless my memory deceivers me, however, he went on to indicate that 791 that would be done only after full consideration of what might be said by those who had the best reason to have a view as to what the permanent legislation should be.
To me, this Bill has a very odd air. It has been attacked, or criticised, by the noble Lord on the Opposition Front Bench on the ground that it strikes at the roots of private property—an excellent sentiment, coming from Socialist quarters. But the Bill itself appears to be a claim that the State and Ministers know better than anyone else, and that they have a complete right, within the provisions of this Bill, to demand from a private person not merely the use of processes but even information as to how to use them. That appears to be prima facie a Socialist doctrine. I remind myself of the explanation which Dean Swift gave long ago, in a highly satirical passage, as to why Irish bishops were so bad. He said that most excellent persons were selected in England to be bishops in Ireland, but that, unfortunately, on the way there, they were seized by highwaymen, who acquired their robes and status; and so really it was a lot of highwaymen who went to Ireland and occupied the bishoprics there. Something of the same sort has happened here.
§ VISCOUNT SIMON
It is almost impossible to understand how this Bill can have been approved in its present form by Her Majesty's Government. In the days when I knew the inner processes of legislation—there is no harm in my saying it now—we had a Legislative Committee before which every Departmental Bill came; and it had to run an examination, if it was a Departmental Bill, by Ministers not specially attached to that Department, in order to see whether it was a proper Bill. Here, I do not think even the noble Lord on the Opposition Benches has exposed the full character of this measure, though, as we know, he denounces it as striking at the roots of private property.
I turn to this famous Clause 3 in which I see thata competent authority"—792 that, I think, means the Minister of Supply or the Admiralty—may … give directions to any person requiring him, within such time as may be prescribed by or under the directions, to furnish to that authority, or to any other person nominated in the directions, such information in his possession … as may be demanded by the person so nominated …That is an astonishing power to claim. I cannot understand how a Government, inspired, as I know this Government to be, with a proper respect for private property, and a dislike of the theory that the State knows better, since "the gentleman in Whitehall knows best," could possibly have sponsored such a provision. I suppose that we are now going to be asked to pass the Motion for the Second Reading, but I hope that, when we have done so, there will be a long interval, during which the promoters of the Bill will themselves consider whether, on reflection, they are going to stand by it. In his opening speech, the noble Lord, Lord Mancroft, observed that the Government's object was to review and, if possible, abolish these Defence Regulations. It is quite plain that this Bill not only does not do that but in fact widens the powers contained in the Defence Regulations and invents new powers which the Government will claim to exercise.
Lastly, I would make this observation. I am not an expert on this subject, although I took some interest in it when discussing the Patents Act, 1949, when I tried to help to make the Act a good one. I have noticed of late, in some newspapers, some comments on this Bill. My noble friend Lord Mancroft, who must have a very unpleasant task, observed at the end of his speech that "some uneasiness has been expressed in the newspapers." I read the leading article in The Times this morning and I should not be surprised if the Cabinet, or some of them, read it too. That leading article called attention to this Bill and its curious terms, and makes some very moderate comments. It ended by saying:The Government have almost certainly gone too far, and quite certainly too fast.I think that is the reflection to which I am forced by an impartial study of the Bill and by listening to what my noble friend said. All I wish to ask the noble Lord is that he will give us a perfectly definite assurance, which he has already 793 indicated, that, if we give the Bill its Second Reading to-day, there will be abundant time, not only to hear the views of the people who know about this matter—as my noble friend Lord Balfour of Inchrye has demanded—but for the Government to reconsider the whole proposal, because I should be very sorry if this Bill went on the Statute Book as an example of Conservative policy.
§ 4.4 p.m.
My Lords, having listened to this debate, my noble friend Lord Mancroft will be in no doubt whatsoever of the grave concern the industry feels about this measure. I would go further. Industryis not merely gravely concerned about the contents of the measure, but it feels that the arrangement whereby over the last few years an understanding has been built up for Government Departments to consult with organised industry before any important measure is laid before Parliament has been overlooked. On this occasion, none of the major industrial organisations, such as the Federation of British Industries, mentioned by my noble friend, and the National Union of Manufacturers of which I can speak personally, has been consulted beforehand.
We all recognise that it is important that when possible emergency regulations should be done away with, and we recognise also that some minimum residue may have to be included as part of our permanent legislation. The question arises, what should that minimum be? When we consider a measure such as this, which affects the ability of industry to compete under conditions of intense competition in the world markets, we have to think seriously whether such a measure is right at all. I do not want to go over the whole Bill, but in the light of what has been said I should like to remind your Lordships again how very widely the definitions in Clause 6 have been drawn. I find it difficult to conceive of anything that any manufacturer can make, or any design or invention he may have in his possession, which is not subject to the provisions of this measure. Even more important, the definition, particularly on the question of information, is not subject to any territorial limitation. If I make something in this country, it may be arguable that I ought to be compelled at the right time to hand that knowledge 794 over to the Government; but is it right that if I, in this country, have knowledge that somebody in Canada is making something under licence from the Canadian Government, I should be compelled to provide that information to the Government of this country?
As has been said, there are two main purposes—the disclosure of what I might call secret information and the disclosure of patented information. As regards the first, dealt with in Clause 3, I understand that the Minister of Supply or the Board of Admiralty, by giving directions, can compel any person to disclose information. He can be made to disclose information not only to a Government servant, but also to a third party, perhaps a private individual. That individual may be one of his competitors. Moreover, information having been disclosed to a third party, I can see nothing in this measure that would not allow that individual to publish it for all to see and know; and, therefore, it no longer remains secret information. I understand that there is only one limitation to this—that is, whether it appears to the competent authority to be necessary for defence purposes—whether "it appears," not whether "it is." When we recognise how very wide the definition of "defence purposes" is, we realise that this is a very serious measure.
I understand there is only one set of circumstances in which an individual is legally entitled not to give information—that is, if he has received the information in his capacity as a counsel, solicitor or patent agent. The reasons one would more often expect him to be able to put up against giving any information are not allowed for in this measure at all, and I should like to give your Lordships an example of the kind of cases which seem to be serious. The question of being under contract of secrecy has been mentioned already and I shall not refer to it again. But a foreign citizen visiting this country can be compelled to give information. If that is so, a member of the United States Atomic Energy Commission visiting this country could be questioned on those matters of which he may have special knowledge, and he could be prosecuted, and even imprisoned, if he were so unwise as not to agree to give the information asked for. I could go on giving other cases of a similar kind. 795 I would merely suggest that for a Government Department to be able to extract information in this way under threat of prison is a complete change in the law of this country and is without any precedent whatever.
It has been mentioned that a considerable amount of confidential, technical and scientific information is passed between different people in different countries. We pass confidential and technical information to firms in the United States, and in return we get valuable information in this country. That is also not infrequently coupled with some allocation of markets. It may be that the American firm has the South American market and the market of the United States, and that we are given the market in this country, in the sterling area and in Canada. But if this measure goes through as it now stands, surely there will be a great effort on the part of foreign countries to stop giving us this information, which can only be to the disadvantage of our export trade.
It is true, as has been mentioned, that there is provision for compensation, and that compensation may amount to a considerable amount where one firm is using the invention of another, or the Government are going to use the invention of some firm to a considerable extent. But where information is not going to be very much used, the secrecy will have been broken, and there is no compensation at all that I can see, unless it be by some form of ex gratia payment which is provided for in the Bill. Clause 1 deals with patented information, and I have in mind in particular the production of proprietary medicines, and so on. I should like to ask my noble friend whether there have been many abuses where this information has been withheld; and whether those cases of abuse that have been detected are not capable of being dealt with under the provisions of the existing Patents Act.
I think it was only last week or the week before that two draft statutory instruments were laid before Parliament for the prolongation for a further year of emergency regulations dealing with patents, inventions and designs. Surely, with that extension of one year, there is no hurry. My noble friend has already promised to postpone the Committee stage of this Bill for a considerable time—that is obviously reasonable. But we 796 want to make sure in our minds whether the Bill is capable of being amended satisfactorily. That raises a matter of principle. Is it right that industry should be liable, in peace time, to have to disclose everything it knows? If the answer to that is, "Yes, it is right", then I am sure the measure can be amended. But if the answer is, "No, it is not right", then I would suggest that there is only one course which should be adopted, and that is for this measure to be withdrawn altogether. As I imagine the answer to that question will not be "Yes" or "No," but rather, "It is not peace time," then it should be clear in our minds what that answer means. We must all agree that it is not, in the ordinary sense of the word, peace time; but while in some respects it is not peace time, in so far as we are up against highly competitive conditions in world markets it is very much peace time. Therefore, we want to guard against caring for an eventual future crisis while we are at the same time jeopardising the immediate prospects of being able to pay our way. I welcome my noble friend's offer to postpone the Committee stage. I take it that that means that all organised industry will be allowed to express their views and discuss this matter; and I can only hope that when that is done, such a situation as the one in which we find ourselves today will not be allowed to arise again.
§ 4.15 p.m.
§ LORD DOUGLAS OF BARLOCH
My Lords, this Bill has received a chilly welcome in this House, and I am afraid that I am not going to offer any comfort to the noble Lord who introduced it. I do not remember an example of permanent legislation of such a drastic character. All kinds of things are done, and no doubt justifiably done, in time of war, in order to safeguard the public interest; but these are drastic provisions indeed to form part of the permanent legislation of this country. For example, Clause 1 appears to mean that a Government Department has the power to vend an invention. That, I presume, means that it can effect a compulsory sale of the patent rights to somebody other than the patentee. I do not know what the justification for that can possibly be. I understand that reasons can be advanced for giving compulsory powers to use an invention, subject to payment of a proper royalty, but to oblige the sale of it seems 797 to be a very strong measure, and an unnecessary one.
I have had considerable occasion in recent times to deal with matters relating to patents for inventions, because a number of my clients are interested in them. I am not speaking this afternoon on behalf of any particular private interest, but, I hope, in the public interest. The path of the applicant for a patent in this country is already a difficult one. Even under the most favourable conditions it takes a long period before he is able to get his patent sealed, and if it should be the subject of opposition the time taken is quite inordinate. And during all that period he is in a state of uncertainly as to what his ultimate position will be. This Bill will add considerably to the uncertainties and the difficulties of patentees.
It is a remarkable thing that it should also require the disclosure of secret processes. In many cases it is necessary, in order to protect the interests of an inventor, that, instead of patenting his process, he should develop it as a secret process. It may be that the process is of such a nature that, if he patented it and the method became known to the world, it would be impossible for him to detect infringement. Therefore the remedy which is theoretically open to him is, in practice, not available. Or it may be that, although the process is of considerable industrial value, it may not be of a nature which is patentable. Once this information becomes disclosed as it can be under the provisions which are contained in this Bill, to the operator's competitors, they are not under any obligation—and if they were, it is difficult to see how the obligation could be effectively enforced—to keep the process secret any longer; and once it becomes known to the world the inventor's position is entirely destroyed. As I understand them, the provisions contained in this Bill for compensating him do not take any regard whatever of that possibility.
As industry becomes more and more complicated, industrial processes become of a very intricate nature. The development of new methods of manufacture involves long periods of research. It often involves an extremely large expenditure of money for the purposes of experiment, and I fear that the provision of this Bill may lead to a considerable loss to people who have expended their resources and energies in that way. If that happens, 798 it will be a detriment to the country as a whole, because it will discourage inventors from devising new inventions.
§ 4.22 p.m.
§ LORD SILKIN
My Lords, may I ask the noble Viscount the Acting Leader of the House whether, in view of the many responsible speeches which have been made on this Bill to-day, and the fact that the noble Lord, Lord Mancroft, has promised that the Committee stage will not be taken for a considerable time yet, it would not be wiser to postpone taking the Second Reading? After all, nothing would be lost, and it would not be any sign of weakness on the part of Her Majesty's Government to think again as a result of the weighty remarks which have been made from all sections of the House. If, after consideration, Her Majesty's Government still insist upon getting their Second Reading, they can have it at any time they wish; and, of course, if they insist they can have it this afternoon. Nobody is going to vote against it. But would it not be wiser for the Government to think again and make up their minds whether, in the light of the debate which has taken place, they really want the Second Reading, and whether, as the noble Lord, Lord Rochdale, said—and I think quite rightly—this Bill is capable of amendment in such a way as to satisfy the criticisms which have been made?
§ 4.24 p.m.
§ VISCOUNT WOOLTON
My Lords, I have not been able to listen to the whole debate, and my apologies are due to the House for that fact. I was not aware that my noble friend Lord Salisbury was going to be away this afternoon, and I had another appointment to keep in the House. That was the reason for my absence, which I regret. I have, however, noticed the general feeling of the House, and there is another factor in my mind, which is that the consultations with industry, which have in fact begun, undoubtedly had not been finished when the Bill was drafted—indeed, I do not think they have been finished now. If it will suit the convenience of the House I beg to move that this debate stand adjourned.
§ Moved, That the debate be adjourned.—(Viscount Woolton.)
§ On Question, Motion agreed to, and debate adjourned accordingly.