§ 7.45 p.m.
§ Bill read 3a(according to Order).
§ Clause 1:
§ Rights in inventions made by employees
§ (3) In the determination of any dispute as to the allocation of benefit under this section regard shall be had—
§ as well as to any other relevant circumstances.
LORD CAWLEY moved, in subsection (3), after paragraph (c), to insert
(d) to any expenditure in connection with registration, maintenance or enforcement of any patent for the invention and corresponding patents in other countries,
§ The noble Lord said: My Lords, I put down this Amendment for the sole reason that the noble Lord, Lord Rhodes, said on Report stage that he would give the matter further attention. I think I need say little, but I want to say two things. It was suggested that this Amendment was unnecessary because, as the noble Lord said, the normal rules about expenditure in protecting trust property will apply and therefore we need not put in anything about the expenditure on the enforcement of patents for an invention and corresponding patents in other countries. I am not a Chancery lawyer, but I have grave doubts as to whether that would apply. I have no doubt the noble Lord has made investigations on that point.
§ The second point the noble Lord raised was that since an application under Section 56 would most likely come fairly early in the life of a patent, one would have no idea how much could be expended on these various objectives in 89 future and there would be some confusion. But I think it is far more likely that an application under Section 56 on the part of an employee would come late in the life of a patent, for this reason: that an invention might show no chance of succeeding in the first few years, and during that time, in all probability, the employee would show little interest in his invention. However, when the employer has made a great success of the patent, he is likely to say, "Why can't I have my cut out of the invention?" And rightly so. I think that the idea that these expenses are likely to come after the hearing of an application under Section 56 may be exaggerated. In my submission, they are equally likely, or more likely, to come before the application. I do not think that I need say more on this point, but I shall be pleased to hear what the noble Lord has to say about it. I beg to move.
Page 2, line, at end insert the said paragraph—(Lord Cawley.)
§ THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES)
My Lords, I did promise to give this matter further consideration on Report stage. The Amendment is the same as that which was moved by the noble Lord on that occasion. It deals with the question whether the expenditure incurred in maintaining and enforcing patents should be included in the list of considerations. The scheme of the Bill is that the function of the tribunal (the court or the Comptroller of Patents) should be limited to determining what share of the benefit of the invention should be enjoyed by each party. Expenditure incurred in maintaining and enforcing patents is not relevant to this decision. It would become a matter to be taken into account only if the Bill were to be changed so as to provide for the tribunal's going further than simply laying down the share each party is to enjoy and actually translating that just share into a monetary reward. As I pointed out at the Report stage, the trust relationship which the Bill creates arises when the invention is made, and this will ensure that, when it comes to translating just shares into cash payments, all expenditure properly incurred in protecting the trust property—normally, the invention—will be deducted before dis- 90 tributing the net benefit. I think that is common sense. I cannot therefore accept the Amendment, but in discussion of the next Amendment I can, perhaps, offer some concession on the subject.
§ LORD CAWLEY
My Lords, I thank the noble Lord for what he has said. I realise that this is not an important Amendment. The next one is much more important. I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ 7.50 p.m.
LORD DRUMALBYN moved to add to the clause:
( ) Effect may be given to the foregoing subsections of this section by directing that the benefit of the invention and of any patent therefor shall belong to the employer and the employee in specified shares, or by apportioning the interest in or benefit derivable from the said invention and of any patent therefor in any other way that the court or comptroller may deem appropriate in the circumstances of the case.
§ The noble Lord said: My Lords, this Amendment is identical with the Amendment moved on Report but for the last sentence, and is not very different from the one moved by the noble and learned Lord, Lord Wilberforce, in Committee, except that it is in more general terms. I do not think I need argue the merits of the Amendment. All I need say at this stage is that, in his reply on the Report stage, the noble Lord, Lord Rhodes, seemed to us to deal only with the first part of the Amendment. We have cut out the third part, and that leaves the second part. The first part deals with apportionment in specified shares, and there the noble Lord said that the first part of the Amendment added nothing to the Bill. But the point of the Amendment was to bring out the fact that apportionment in specified shares might not be the only way, and, indeed, not always the most appropriate way, in which to divide the benefit of the invention or any patent therefrom. We have put down this Amendment in order to give the noble Lord another opportunity of expressing a view on this matter and also to give the House an opportunity of considering it. I will not say more about it at this stage, but will listen to what the noble Lord has to say. I beg to move.91
Page 2, line 14, at end insert the said subsection.—(Lord Drumalbyn.)
§ LORD CAWLEY
My Lords, I rise to support my noble friend on this Amendment, and I think I ought to say something in general about this Bill. It has, in my view, been considerably improved in passing through this House, but I still think it is a lawyers' feast, and it will benefit our profession considerably. I will not bore your Lordships with a list of reasons why, but there will be enormous complications in administering the provisions of the Bill. All I would say now is that I support my noble friend on this Amendment.
§ LORD RHODES
My Lords, I think the noble Lord, Lord Drumalbyn, made a fair comment about the accent that I put on this matter on the Report stage. While it omits the last sentence, nevertheless, it is the same matter that we dealt with on that occasion and deals with ways of apportioning the benefit. It was, we were told on the Report stage, intended to enable the tribunal to provide for the grant of shop rights—that is to say, in a case in which the legal title of the invention was owned by the employee, a grant to his employer of a royalty-free licence to use the invention in his business. As I have said several times before, the intention of the Bill is that the tribunal shall simply lay down the share to which each is entitled, and it would not, therefore, be appropriate, as the Bill is at present drafted, to provide for awards of this sort. There is, in any case, a difficulty about the tribunal awarding shop rights: for example, if the employer is given a shop right it could conflict with an exclusive licence previously given by the employee to some third party. It would, therefore, be necessary, in any case, to make it clear that the tribunal's power to award a shop right is limited to cases in which such an award would not conflict with the rights, of third parties bona fide acquired.
It is therefore in my view likely that once the just shares have been agreed or determined, the parties will come to contractual arrangements of this sort. It might well happen in the not unusual case where the employee thinks more highly of the invention than does his employer. I can envisage cases of the employer agreeing to the employee having all rights 92 in the invention, subject only to the grant of a shop right to himself. But we have doubts whether the Bill should make provision for the tribunal to impose such an arrangement. We have considered the sort of Amendment that would be necessary. It would be a fairly radical one. We think that the Amendment should provide that the tribunal (the Court or the Comptroller) may in a suitable case deal with the matter by way of awarding a lump sum or the grant of an appropriate licence. We think it will be necessary to provide that shop rights may be granted only in a case in which such a course will not infringe rights already given to a third party or third parties. No doubt drafting will raise other points.
However, having listened attentively to what has been said, and thinking round this in between the Report stage and now, I can undertake that an Amendment will be moved in another place allowing the tribunal to award single lump-sum payments, or in appropriate cases, shop rights, and to consider the aptness of the considerations already set out in the Bill having regard to this change. I hope that this is satisfactory to the noble Lord.
§ LORD DRUMALBYN
My Lords, I am sure my noble friend Lord Cawley shares with me gratitude to the noble Lord for the consideration he has given to this matter. He has gone a long way to meet the case that we were making. We were trying to gather up into one sentence all the possible ways in which the interest in or the benefit resulting from the invention or the patent might be apportioned. The noble Lord, if I understand him rightly, has limited the way in which apportionment can be made to the specified shares as at present, to a lump sum and to shop rights. In each case, of course, it would have to be an appropriate case; I do not think there is anything between us there.
The noble and learned Lord, Lord Wilberforce, referred, also, to the possibility of royalties. The noble Lord, Lord Rhodes, has not mentioned that possibility. I take it that he has found some difficulty there to which he has not referred in replying. I do not know whether, at this late hour, he would think it worth while going into any detail on this point. I would say, frankly, that I should sympathise with him if he felt 93 that it was not necessary, because, after all, there is another place for the consideration of this matter, and the fact that the noble Lord has undertaken that an Amendment will be put down in another place will certainly give an opportunity for exploring it further. Therefore, subject to what my noble friend may wish to say about it, I feel that there is no point in pressing this any further.
Like my noble friend Lord Cawley, I would express my appreciation of the consideration that has been given in a difficult field. My noble friend can tread with a sure step in this field where the noble Lord opposite and I go rather delicately. Nevertheless, I hope that, between us, we have managed to bring out some important matters and to improve this Bill. Once again, I would say "Thank you" to the noble Lord for the consideration he has now given. I felt (he will not mind my saying this) that perhaps he had given a little scant consideration before the last stage, but he has certainly rectified this now, and we are grateful to him. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ LORD RHODES
My Lords, I beg to move that this Bill do now pass. I will do so quite briefly, because the hour is late. I should like to thank noble Lords in all parts of the House for their cooperative and constructive criticism. I think it is a better Bill now than when we first introduced it. We have listened carefully to the views expressed on the question of inserting in the Bill some criteria for the guidance of both the tribunal and the parties themselves in determining what is a just share. We followed this up by inserting during the Report stage what appeared to be the most relevant factors to be taken into account. Finally, I have to-day undertaken that an Amendment will be moved in another place to take into account what has been said in to-day's debate. I much appreciate all the helpful comments that have been made, and all that remains for me to do is to move that this Bill do now pass.
§ Moved, That the Bill do now pass.—(Lord Rhodes.)
§ On Question, Bill passed, and sent to the Commons.