HL Deb 15 March 1977 vol 380 cc1460-9

3.14 p.m.

Lord ORAM

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do again resolve itself into Committee.—(Lord Oram.)

On Question, Motion agreed to.

[The LORD ABERDARE in the Chair.]

Clause 54 [Interpretation, etc., of provisions about Crown use.]:

The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey) moved Amendment No. 246: Page 46, line 2, leave out ("last specification to be filed") and insert ("claims of the last specification to be filed (as interpreted by the description and any drawings contained in it)").

The noble and learned Lord said: Clause 54(1) and (2) confers on an applicant certain rights in respect of Crown use of his invention once his application has been published. Clause 53(5) envisages use of a patented invention for the services of the Crown on terms agreed between the proprietor of the patent and the Government Department concerned or on terms determined by the court. Clause 54(1) applies these provisions to Crown use of the invention between the dates of publication and grant. Clause 54(2), however, places restrictions on the applicant's rights in respect of Crown use in this period, in that any payment agreed or determined will be recoverable only (1) if a patent is granted and (2) if the Crown use in question would be an "infringement" not only of the patent as granted but also of the specification as published had it been a patent; that is the "infringing" act must fall within the claims of the published specification. The purpose and effect of the Amendment is to make this absolutely clear, and also to make it quite clear that the claims contained in the published application are to be interpreted by the description and drawings in like manner to the claims of a patent under Clause 114. A corresponding Amendment will be proposed for Clause 67(2): that is No. 266 in the fourth Marshalled List. If noble Lords are agreed, perhaps I may move that formally when it is reached. In the meantime, I beg to move Amendment No. 246.

Lord DOUGLAS of BARLOCH

I should like to ask the noble Lord what is the purpose of the words in brackets. It would appear that the descriptions and drawings in a patent specification can always be referred to in order to interpret it, and to state it in this way implies, I think, that nothing else can be referred to. Is that the intention of the Amendment?

Lord McCLUSKEY

I can perhaps answer the noble Lord in this way: we have made similar Amendments earlier for the purpose of making the matter absolutely clear, and at this stage the purpose of putting in these words in brackets is to be consistent with the Amendments made earlier and to which I spoke on the first or second day of the Committee stage.

On Question, Amendment agreed to.

Clause 54, as amended, agreed to.

Clause 55 [Rights of third parties in respect of Crown use]:

On Question, Whether Clause 55 shall stand part of the Bill?

Lord LLOYD of KILGERRAN

This is a very long-winded clause which gives to the Crown immense powers. In brief, the provisions of this clause will render inoperative for the services of the Crown "any licence, assignment, assignation"—and I like the word "assignation" when used in relation to patent matters and inventions—"or agreement" related to a patent. Therefore, no such licence or assignation or assignment or agreement has any effect in relation to the working of the invention, the subject of the patent. This is a clause which covers two or three pages of the Bill; subsection (1), for instance, has approximately 400 words in it without a full stop.

I should like to ask the Minister whether any similar powers are to be found within the jurisdiction of other Governments in Europe, and particularly the EEC countries, and whether it is likely that the progress of standardisation and the costing of military equipment, for NATO, for example, is affected by the fact that the Government have such large powers in relation to licences and arrangements under patents which may be owned by foreign proprietors. It is known among practitioners that foreign owners of United Kingdom patents are, therefore, rather careful about licensing then patents in the United Kingdom, which are likely to be used for the services of the Crown, which are defined in such wide terms.

I apologise to noble Lords opposite for not having given notice of this question and I fully appreciate that I cannot expect an answer this afternoon. Where disputes of this nature are likely to arise in relation to patented inventions and the foreign proprietors are finally forced to go to the courts of this country, there is likely to be some effect upon the introduction of new ideas in the field of technology where the invention is used for the services of the Crown.

Disputes over patent matters of this kind are, of course, dealt with by Government Departments. I should like to pay tribute to those Government Departments, usually known as patent departments, which have done such magnificent work, in solving disputes of this kind and acting as a kind of conciliatory organisation for dealing with these matters. The Royal Com-mission on Awards to Inventors, which was set up after the last war and to which I have referred on several occasions, in its many reports laid down some basic principles as to how Government Departments might reasonably behave in dealing with patent disputes. Therefore, I pay tribute to those patent departments for the difficult but successful work they have done for United Kingdom and foreign proprietors of patents, in settling disputes.

However, it must be remembered that many patentees, particularly foreign ones, sometimes with reluctance have to accept settlements rather than venture their fortunes on the uncharted seas in the courts, to which litigation with the Crown so often leads. It may also lead to astute firms being able to include large sums of money in their prices relating to their patents which, in the negotiations that ensue, are hidden. I shall suggest quite soon that some of these matters could be dealt with by a tribunal rather than in the High Court. Therefore, I should be grateful if at some stage, at the convenience of noble Lords opposite, the Government could answer my questions.

Lord HARMAR-NICHOLLS

To some extent the very length of this clause makes it suspect—he "protesteth too much" in getting these powers. I support the noble Lord, Lord Lloyd of Kilgerran, on the matter of a tribunal rather than a court. In the circumstances that are envisaged in the clause, I should not have thought that a court is the proper place to make decisions which are likely to affect the rights of individuals and third parties. The noble Lord has given notice that those matters will be discussed later. I hope that serious consideration will be given towards setting up a tribunal to hear these cases rather than having the courts as the deciding factor in this very long and, as consequence of its length, suspect clause.

Lord McCLUSKEY

Perhaps I might be allowed to reserve my fire on the matter of tribunals until the battle has been formally and properly opened by the noble Lord, Lord Lloyd of Kilgerran, when we come to the next group of Amendments.

I have a deep sympathy and fellow feeling with what the noble Lord, Lord Harmar-Nicholls, said about the length of the clause. However, that does not make the clause suspect; it makes it more difficult to understand. Having repeatedly asked about this matter in the course of my briefing sessions, I am satisfied that the complications of the subject matter are such that if one follows normal drafting practice the clauses do become rather long.

I acknowledge the tributes that were paid by the noble Lord, Lord Lloyd of Kilgerran, and thank him for them. I defend the matter about "assignation" with a certain fervour because it is the Scottish legal term equivalent to the word "assignment" and, indeed, some purists and classicists might think that it is a better translation. I am obliged to the noble Lord for suggesting that we might take time to consider the answers to the questions that he asked. They are important questions and deserve time to be considered. Accordingly, if I may, I shall write to the noble Lord in due course.

Lord LLOYD of KILGERRAN

I am very much obliged to the noble Lord.

Clause 55 agreed to.

Clause 56 [References of disputes as to Crown use]:

3.27 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 247: Page 49, line 22, at end insert ("or by agreement of the parties, to a tribunal for determination.").

The noble Lord said: With the leave of the House, I beg to speak to associated Amendments Nos. 248 to 251 inclusive. I shall also refer to Amendment No. 254. The object behind these Amendments is that if a dispute arises in the course of negotiations as to payment of compensation to a patentee for the use of his invention by the Crown, in default of agreement, an opportunity should be given to the patentee or the licensee, as the case may be, who is in dispute, to have the dispute dealt with not by the courts, as the present clause envisages, but by some kind of tribunal. The decision of that tribunal should be final. The tribunal would comprise a chairman, perhaps a chartered patent agent or a lawyer who is familiar with patent matters, and two persons who are also familiar with industrial matters associated with inventions. One matter that might have to be considered in a dispute is, for instance, the cost of developing an invention. If one had to deal with this matter before a tribunal of men versed in these industrial affairs there would be no problem. But if one has to advise and instruct members of the High Court in these matters, it becomes a very long and tedious business, as I know from experience in dealing with disputes involving the Crown.

When I suggested a tribunal for dealing with awards for compensation and payments to employees, it was said that there would be some legal problems. The noble and learned Lord the Lord Chancellor suggested that it would be difficult to find a list of people suitable to deal with matters of this sort. I should not have thought there was any problem about that. As your Lordships will know, under certain aspects of race relations a panel of men is called upon from time to time to deal with difficulties that arise in relation to immigrants to this country. In the same way, the Comptroller General, the Department of Industry or some other body could have a panel which could be called upon if the parties to the dispute agreed to go to the tribunal rather than to the High Court to have the matter dealt with.

The Banks Committee, of which your Lordships have heard, considered at great length the patent system of this country. That Committee was somewhat against this kind of procedure, but suggested that many patent disputes should be dealt with in a robust manner. When industrialists have a dispute on patents and invention, many do not wish to get involved in inevitably lengthy court proceedings. The Crown can say to a patentee that it cannot pay him anything because the invention in the patent application has been recorded in Government archives or Government research establishments. A great deal of time is involved in pressing discovery as against the Crown, and it has always been a difficult mater. Then comes the question whether the invention recorded in all the files of the Government Department is the same as the invention the subject of the patent.

It is difficult for a High Court judge without experience of patent matters to deal with these things quickly and robustly, as the Banks Committee indicated. May I say that my experience is that once a High Court judge has been instructed about the technical matters his judgments are often a very fine summary of the technological matters involved in the invention. But it is the expense of having to instruct the court, and the procedures of the court, which should in my view be considered. I think that a tribunal would be the more effective way of dealing with these matters. I beg to move.

Lord HARMAR-NICHOLLS

I should like to say a word in addition to what I said a moment or two ago. The noble Lord is on to a strong point here. I thought that it has now become common form that in matters where there are likely to be disputes, such as we h id under the Industrial Relations Act, we had a learned Lord sitting as the Judge but he had two assessors sitting alongside him who understood the dialect and the language of the particular problems likely to come to an industrial court. Similarly with the rent tribunals there is an assessor sitting with a solicitor because they have the knowledge of the practical day-to-day problems which arise from these matters.

Here, when we get into the realms of scientific and technical disputes, they use almost a different language, and their whole idiom and approach is different. This is certainly no criticism either of the high standing or of the objectivity of the courts. They call for admiration, and deservedly so. However, in this field, if all parties agree that because of the technicalities of the matter an assessor sitting alongside a learned chairman would make it more easily and quickly understood, from every point of view I should have thought that that was more desirable.

The point the noble Lord made about cost really comes into it. So many times one feels that one has a case and would like to pursue it but the cost of doing so through the courts prevents one from pushing for one's rights, and that is certainly not a good thing in this particular field. Without in any way interfering with the normal reputation that the courts carry with them, I should have thought that in this new world where matters other than a dispute as to people's meaning come into it, where technical considerations have to be taken into account, this is an ideal vehicle for having alongside a learned chairman people who would be assessors. Provided that all parties wanted such a tribunal to give a decision, this would be much more likely to be satisfactory, and the results of their decision are much more likely to be accepted than resented.

3.33 p.m.

Lord McCLUSKEY

First may I thank noble Lords who have spoken for the moderate way in which they have pressed this Amendment. I hope that I can reply to it in the same spirit. I think that it would be desirable to look at rather more of the Amendments for some guidance as to what the effect would be. First of all, to explain the background to noble Lords who have not attempted yet to follow it, Clause 53 of the Bill allows Government Departments power to use patents for the services of the Crown. It further provides that such use shall be on terms to be agreed between the proprietor of the patent and the Government Department concerned, or, failing agreement, to be determined by the court. I am repeating here what I said in relation to the previous Amendment I moved. Clause 56, therefore, provides for reference to the court of any dispute as to the exercise of the powers conferred by Clause 53, or as to the terms of use, also any dispute as to the right of any person to receive any part of any payment made or agreed to be made in respect of such use.

The effect of the Amendments which have been spoken to by the noble Lord, Lord Lloyd of Kilgerran, would be to enable parties to refer such a dispute by agreement to a tribunal. I invite noble Lords' attention to the wording of Amendment No. 247. This is not for a technical reason but for a substantial reason, because the purpose is absolutely plain; namely, that the matter would go to a tribunal for determination by agreement of the parties. That is an essential part of this and all the related Amendments. I think that the noble Lord, Lord Lloyd, is acknowledging that.

May I invite your Lordships' attention to Amendment No. 361 on the Marshalled List. Noble Lords will see that that is a related Amendment; the noble Lord, Lord Lloyd, did not speak to it today, but I presume that it must be related: ('"tribunal", means a tribunal comprising a qualified chairman and two or more other persons with experience in industrial matters;')". That bears out the point that the noble Lord, Lord Harmar-Nicholls, was making. Amendment No. 323 in the Marshalled List has a bearing on this as well because it in effect makes the tribunal final. It reads: No appeal shall lie from the determination of a tribunal. Amendment No. 328, as noble Lords will see, provides that in proceedings before a tribunal no costs shall be awarded against either party to the dispute. So one gets from these the character of the tribunal and the way it would operate. If one looks at Amendments Nos. 270 and 276 one sees that the noble Lord, Lord Lloyd of Kilgerran, will ultimately, I suppose, propose that tribunals of the same kind would deal with matters of infringement and revocation.

I sympathise with the noble Lord's wish to provide some means or mechanism for resolving these disputes informally, but the Government doubt, and I certainly doubt, whether the tribunal which he proposes would provide any mechanism for determining disputes which is not for all practical purposes already available. The essential point is that you cannot go to a tribunal without agreement. If parties are agreed that they want an informal determination of the dispute between them, then they can reach an ad hoc agreement to go to a body; and instead of being restricted to a selection of members of a tribunal from those who may be on a panel (who may not include people expert in a particular field) they are free to select their own experts in the course of the agreement and go therefore to an ad hoc tribunal.

In the circumstances I do not want to go on at length about this matter, but I would say to noble Lords that if the agreement is essential, as it appears to be, then that agreement would enable parties on any occasion ad hoc to set up a tribunal which would exactly meet their needs, and they can reach such agreement as they wish in relation to procedure and costs. Therefore, in my submission to the Committee, the Government's position is that the Amendments are unnecessary. For that reason I would invite the noble Lord not to press them.

Lord STRABOLGI

This may be a good moment to take the Statement at present being made in another place. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.