HL Deb 24 January 1983 vol 438 cc92-116

8.45 p.m.

Lord Scarman

rose to move, That this House takes note of the report of the European Communities Committee on Trade Marks (1st Report, 1982–83, H.L. 21). The noble and learned Lord said: My Lords, I beg to move that the House takes note of the report of the Select Committee on the European Communities upon certain proposals made by the European Commission for establishing in the Common Market a Community trade mark. These proposals of the Commission were published in November 1980. Similar proposals earlier had been under consideration for a considerable number of years. The proposals are to establish a Community trade mark and to do so by means of two instruments, a regulation and a directive. The documents published in November 1980 were a draft regulation and a draft directive.

The regulation would establish a new Community body, a Community trade mark office; and the task of that office would be to grant Community trade marks, to maintain a register of Community trade marks and, subject to an appellate procedure, to deal with oppositions to grant of a Community trade mark and with applications for removal of such marks from the register, and for declarations of invalidity. The marks to be registered would be marks for goods and also for services.

It is important to bear in mind that if the draft regulations were to be implemented there would be a Community trade mark system covering marks applied to goods and marks applied to services. The Community trade mark would be valid in every member state. In order to get it, it will be necessary to make only one application. One registration would secure the comprehensive cover for trade marks now available in the Common Market only by eight registrations in eight different national systems. One must make eight applications at the moment and get eight registrations in order to secure the only trade mark protection available at this moment in the Common Market.

The Community trade marks system being proposed by the Commission would replace all that by one application and one registration; and the mark so registered would be valid, recognised and enforceable throughout the length and breadth of the Common Market. It is important to bear in mind when considering this proposal that the Community trade mark would not be in substitution for those eight national systems now prevelant in the member states; it would be additional. The fact that it would be additional gives rise to the need for the draft directive, which is the second of the two instruments under scrutiny in this report.

The purpose of the draft directive is to approximate the national trade mark laws so that they harmonise with the provisions of the proposed regulation establishing the Community trade mark. The idea is that the approximation should go no further than is necessary to enable the Community trade mark to co-exist harmoniously with the national trade marks. Of course, the draft directive will have a greater impact in some member states than it will in others. It will have a particularly heavy impact in the United Kingdom and in the Republic of Ireland. The reason for that is that those are the two member states in which unregistered trade mark rights are of fundamental importance and are protected and enforceable under the common law.

Such in the barest outline is the scheme of the two draft instruments emanating from the Commission which the House is now considering in this short debate. Let me say at once that the evidence is that the Governments of all the member states and many influential bodies, institutions and persons in the trade and industry of the Community regard the establishment of a Community trade mark as a logical and desirable development in the Common Market. Let me emphasise at the outset that this is the view of our own Comptroller-General of Patents, Designs and Trade Marks. In evidence to Sub-Committee E, Mr. Davis said: If one looks upon the Community almost as a single trading entity, it seems strange that one can be opposed to a Community trade mark. The problem is simply one of reconciling it with existing systems". But there is another view strongly held—and strongly held among people who understand and have at heart the good health and future of British trade and industry. Their view can be summed up that these proposals which I have outlined are basically unsound; that they require complete rethinking and redesigning. In the light of that clear-cut and very important difference of opinion among people who really understand this subject matter, Sub-Committee E, which had the task on behalf of the Select Committee of scrutinising these instruments, sought to produce a report which would help in the onward negotiations that of necessity still have to take place over a period of years. The Committee hope that the report, of which the House is being invited to take note this evening, will assist in the further examination of these important proposals not only by the Commission but by member states, the Council of Ministers and of course by those in trade and industry directly affected by them.

It is an appropriate moment to take stock of where we stand with these proposals, for any suggestions that may now be made either in this House or elsewhere—or, indeed, by her Majesty's Government—will come at a time when they can go into the melting pot from which it is to be hoped ultimately a satisfactory system will emerge. In what has been—as is quite clear, I expect, from the sketch that I have given—an anxious and difficult scrutiny, the sub-committee has had the advice and guidance of, if he will allow me to say so, a quite outstanding specialist adviser: Professor Cornish. Professor Cornish is of international repute—and, indeed, national repute as well—in this field.

He is the author of one of the most imaginative legal textbooks that I have ever read. He has not only assisted the sub-committee in the preparation of its report, but has produced two working documents which those of us in the sub-committee who had the privilege of reading them considered to be of such importance and of such constructive assistance in the future negotiations that lay ahead that we have, with his permission, incorporated them as two appendices, Appendices A and B, in the report. Appendix A is Professor Cornish's assessment of the draft regulation; Appendix B is his analysis of the possible effect of the draft directive upon our national law. These documents deserve careful consideration even though in a short debate such as this one it is impossible to do justice to them. With the assistance of Professor Cornish, the sub-committee has taken a very considerable body of written and oral evidence and indeed we are grateful—as I hope the House will also feel grateful—to those who have taken the time to prepare and give such evidence.

Before it is possible to reach a conclusion as to whether the proposed Community trade mark and the system embodying it is logical and desirable, one must ask the question: are the proposals which embody the mark feasible and practical? As the work of the Committee continued, it became clear that three major problems had to he solved, and that many minor modifications to the draft instruments had to be met either in toto or by some satisfactory compromise before it would be possible to say that these proposals were feasible and practicable. The blunt fact has to be stated in order that by further work it can, we hope, be overcome; but the blunt fact is that, as the two instruments now stand. they will not do.

What is the difficulty? The difficulty is the different approach between the law of the United Kingdom and that of the Republic of Ireland and the law of other member states on the rights which we may call "trade mark rights". In the United Kingdom the registration of a trade mark is not the basic protection offered to traders who seek to establish goodwill by the use of distinctive marks in relation to goods and services. Trade mark registration—and of course one registers trade marks in the United Kingdom under the provisions of the Trade Marks Act 1938—is no more than an additional protection to that afforded by the common law to unregistered rights and registered rights as well; and the common law, of course, protects the rights, registered or unregistered, by means of the action known as the action for passing off.

We are in a field in which a lot of words are used which really mean very little to laymen and perhaps not very much to many lawyers. The action for passing off is a very simple action in principle, although infinitely complex in its many applications. It was described by Lord Halsbury in the leading case of Reddaway v. Bonham in these terms: Nobody has any right to represent his goods as the goods of somebody else". It is as simple as that.

But of course what the action for passing off, with its injunctive remedies and its remedy in damages, does is to protect the actual goodwill of the trader, whether or not he has a trade mark and whether, if he has a trade mark or trade marks, he has registered them or not. As it is put succinctly in Professor Cornish's book, actual good will in trade is the fundamental value protected by British law". The law of the other member states is very different in its approach. It does not approach the problem of protecting trade marks from anything like the common law stance which I have briefly described. In France and the Benelux countries and some others, what matters is registration. You get nowhere until you register your trade mark, and priority on the register is what matters. Furthermore, in these countries the use of a trade mark, once registered, cannot be challenged save by an application to declare it invalid or to remove it from the register. There is nothing remotely resembling common law rights.

In some member states, notably Germany and Denmark, there are rights in addition to registered rights which bear comparison with our common law. They have rights relating to the redress of unfair competition. Indeed, in Germany there is a very well-developed law dealing with unfair competition. But these instruments now under consideration—the proposed regulation and the proposed directive—are much closer to the French model than they are to the German, and their basic approach is that registration is what matters. There is accommodation, of course, in these instruments for common law rights, because the object of the directive is to ensure that the Community trade mark can co-exist with national systems; but the accommodation, in the view of those who have studied it, is not at present adequate.

Having considered the evidence, and having considered the matters which I have mentioned and which lie beneath those which I have mentioned, the Committee did reach the overall conclusion that a Community trade mark is a logical and desirable development in the Common Market; and indeed, to quote again from Mr. Davis, it would be, "very strange if it was not."

In presenting this report for your Lordships' consideration, it is my earnest hope—and here I speak personally—that, in the negotiations which lie ahead and which will begin just as soon as the views of the European Parliament are available to the member states and to the Commission, Her Majesty's Government will follow a determined line, resolved to secure that those changes which are necessary to make a Community trade mark feasible and workable alongside the British system are indeed secured—because, again I repeat, unless they are, these proposals just will not do.

I will now, if I may, mention three vital matters which have to be resolved before we can properly say that these proposals are feasible. The first matter is the protection of unregistered common law rights. The second matter on which I will touch briefly is the protection of British registered rights; that is to say, rights registered under the Trade Marks Act 1938.The third matter is the protection of service marks. We are bound in this House to be concerned to ensure that the British trader, who has unregistered rights protected at common law, will be able to exercise those rights effectively after the establishment of a Community trade mark. I will not go into detail, but I will indicate briefly those matters which require to be dealt with before we can be certain that the owner of unregistered rights will retain that necessary protection.

First, the owner of a prior unregistered right must have the right to oppose the grant of a Community trade mark. He should be in no worse position to raise an opposition than the proprietor of a registered national trade mark. And yet, under these proposals, under the draft regulation, the proprietor of a registered trade mark has the right to oppose the grant of a Community trade mark, but the proprietor of an unregistered prior right has not.

Secondly, the owner of an unregistered prior right must be given the opportunity to initiate proceedings to restrain the use of a Community trade mark indentical with or confusingly similar to his protected, though unregistered, mark, without the necessity of having to go to the lengths of establishing the invalidity of the Community trade mark.

At the cost of wearying your Lordships, let me tell you what the position is at the moment. In our law, with the fundamental rule being the protection of the trader's goodwill, whether his mark is registered or not, somebody with a prior unregistered right can restrain the owner of a subsequently registered conflicting mark from using that mark. Under the proposals of the Commission, that right will not be there and the two provisions which really need to be reconsidered in this context are the following. They are so important that I will quote them.

First, Article 82 of the draft regulation reads: Without prejudice to Article 45, the national laws of the Member States shall not apply in relation to the validity or use of Community Trade Marks. Then the preamble and introduction to the draft directive—every one of hese words is important—reads: This directive excludes the application to trade marks of other rules of law of the Member States, such as the provisions relating to fair competition. The third matter in regard to the protection of the owner of unregistered rights to which I wish to refer is that it should be clearly acknowledged—and it is not in these proposals—that, if such an owner of a prior unregistered right exercises the right which the draft regulation would give him of bringing proceedings after the grant of the Community trade mark to declare the Community trade mark invalid, it should be open to the national courts, in their discretion, to grant such a plaintiff an interim injunction against the use of the Community trade mark pending the outcome of the litigation. At the moment, if such proceedings are begun under these proposed instruments, the owner of the subsequent conflicting Community trade mark could go on using it in the course of litigation which might well be protracted, causing, clearly, very serious damage—perhaps, irretrievable damage—to the owner of the prior right.

So much for the necessity of protecting the man who has to rely on his common law rights. It is equally important, however, to protect the registered proprietor of a British trade mark. I can be short about this. The matters are important and difficult, I regret to say, to explain in a short compass, but registration in Britain of a trade mark is not the easy, almost formal business that it is in a country like France. Because France attaches importance to registration, almost anyone can get something registered. The fight begins later as to whether the registration should be cancelled, or declared invalid, or removed.

In British law, however, as I have already mentioned, the registrar has a discretion to refuse an application to register a mark which is put before him. What is important is that before he does so he is required to undertake, in the register, an official search and examination for prior registered marks. That is a peculiarity of English law not to be found in the law of other member states. It is of great value to traders who have already registered marks, because they can rely, without any action on their part, upon the registrar examining the register and refusing to register the later mark put forward if he finds a prior, conflicting mark. That obviates the expense and necessity of the trader himself searching the register. That will be lost under these proposals. It may be difficult to persuade our friends in the Common Market to introduce into their Community system anything comparable with official search and examination. We may have to face that possibility. Therefore, for the first time now we are looking at something which may require legislation in the United Kingdom if the Community trade mark is to come.

Not only is this official search and examination a great advantage to traders in this country; it will also present them with a genuine obstacle if the Community trade mark comes. The official search and examination is only one reason why it is more difficult to get a British registration than it is to get, for instance, a French, a German or a Belgian registration. Since registration will be the linchpin of the Community trade mark, this means that it will be easier than it is here to get yourself into a position to preserve your rights or to attack other people's activities if you register in the Community register or in a Continental register. You may not be able to get yourself registered here, whereas you would be able to get yourself registered abroad. This may indeed be an obstacle that we should seek to eliminate if these proposals are to come. If we cannot persuade, as I think it may be impossible to persuade, the Commission and other member states to introduce official search and examination into their systems, we may have to consider legislation so as to produce a system of registration nearer to that in use in the Continental states.

The other matter where it is necessary to secure protection for the owner of a registered right is that under these proposals a prior trade mark owner will lose his right to object to a conflicting later mark if he acquiesces in its use. This is a sound principle, but it must he made clear that by "acquiescence" is meant acquiescence in the use of a mark in the state or states where the owner of the prior mark trades. It would be quite absurd, and unjust, to expect of a trader who trades only in, let us say, member states A and B that he should be on the lookout as to what is going on in member states X, Y and Z. Of course, where others are using a trade mark in competition with his goods, then he must act or lose his rights, but it should not go further than that.

The third matter—and I apologise for the length of my speech but take courage from the fact that there will not be many speeches this evening—is the need to protect service marks. There is a very serious omission in our law. We protect registration marks applied to goods but not marks applied to services. In 1974, the Mathys Committee recommended that our law should be amended so as to cover services as well as goods. If we enter a Community trade marks system without having put our house in order and without having gathered into the folds of the Trade Marks Act 1938 protection for service marks, a large and developing section—largely the high technology sector—of British trade, industry and business will be at a serious disadvantage compared with Continental competitors. I will not take time on this but commend to Her Majesty's Government favourable consideration of the Bill introduced by the noble Lord, Lord Campbell of Alloway, recently in your Lordships' House—the Trade Marks Act 1938 (Amendment) Bill, the object of which is to extend registered trade marks protection to service marks.

How stands it at the end of the day? The committee accepted—and I hope that your Lordships' House will endorse its view—that, notwithstanding the difficulties which I have been at pains to outline, a Community trade marks system is logical and desirable, but it will not be feasible or practical unless solutions are found to the problems I have mentioned; and unless modifications into which I have not been able to go in the time at my disposal along the lines sketched by our specialist adviser in Appendices A and B are sought in the negotiations which are about to start, and they or something similar are obtained. There is also undoubtedly a need, if we are to enter into a Community trade marks system, for some United Kingdom legislation in due course: legislation dealing with the difficulties of registration and with the problem of official search and examination; and legislation dealing with service marks.

I conclude by reminding the House that there is a fear among British business people that we may be exchanging the swift, simple and relatively inexpensive remedies provided by the Trade Marks Act 1938 for something that will prove slow, costly and, in one specific respect, disadvantageous to those who have to rely on their common law rights. These fears can be dispelled only by a determined conduct of negotiations on behalf of British interests in the negotiations which are to begin, along the lines indicated in the report. If they are, it can only be to the benefit of the whole European community, for the result will be a Community trade marks system which is satisfactory to all member states whatever the differences in principle of their own national laws. My Lords, I beg to move.

Moved, That this House takes note of the report of the European Communities Committee on Trade Marks (1st Report, 1982–83, H.L. 21)—(Lord Scarman).

9.25 p.m.

Lord Mishcon

My Lords, from these Benches I wish to pay a tribute—and I am sure I speak for all your Lordships—to the excellence of the report we are now considering, and to the typically lucid and forceful manner in which it has been introduced by the noble and learned Lord, Lord Scarman. He has the great ability, blessed as he is with that logical and clear mind, accompanied by such felicity of language, to address us on the most complex subjects in such simple and intelligible terms, and he has done that for our general benefit this evening. In adding the membership of Sub-committee E as recipients of our gratitude, I can do so without any immodesty, because, through other duties in your Lordships' House, I was unable, as a member of that sub-committee, to participate in the preparation and approval of this particular report.

There is no doubt about the importance of this matter to our trade and industry. Trade mark laws, as the report says, underpin the goodwill that the trade mark owner builds up as he actually uses and advertises his mark". There are obviously conflicting pressures upon those laws in which a balance has to be struck: those of the new entrants into a market who want quickly and cheaply to test whether they are blocked in their proposed user and who also want to get their protection before they have got far with their particular product; there are contrary pressures from those who have existing trade marks and who want to make sure that their protection has not been watered down. A fortiori, holding the balance, as has been particularised for us so clearly tonight by the noble and learned Lord, in attempting harmonisation between the laws of different nations within a community of nations, is even more difficult, not least because of the different emphases, aims and legal traditions of the respective countries in regard to this subject.

As a major example of this, we have, as the noble and learned Lord emphasised, built up in our legal tradition, in our legal system, a common law protection, quite apart from the statutory trade mark registration commenced in 1875; that is the action known as the passing off action. I quote, if I may, the alternative definition in the report to that of Lord Halsbury to which the noble and learned Lord drew our attention: It protects the reputation of our established trader against imitations which would tend to lead purchasers into believing that they were getting his goods or services which they were not". Denmark, Italy and West Germany tend to be like us in this respect. France, Greece and the conjoint Benelux system regard the fundamental factor as registration, as against use.

We are indeed faced with a complex task when we look at harmonisation and the setting up of a Community register. This report, if I may say so, has made a monumental contribution to helping us to get to grips with the problems so vividly outlined to us by the noble and learned Lord—which I therefore do not intend to repeat, especially at this hour—and to giving us guidelines so that, in the negotiations ahead, we can try to give adequate protection to our own people.

Apart from the most useful evidence which the committee obtained from all those intimately concerned, the report contains pointers which are of great import. The appendices to which the noble and learned Lord, Lord Scarman, referred are particularly helpful, and I am glad that he paid such an eloquent tribute to the specialist advisers' assessment of the draft regulations and directive in the light of that evidence which forms Appendix A. After going into the difficulties created particularly for this country by the absence of any search or examination in the proposed Community Register, Appendix A deals with the issue so constructively and incisively, in paragraphs 55 to 57, that I take the liberty even at this hour of quoting a part of paragraphs 56 and 57 of the appendix to which I refer: The proposed Community system would give industry a single alternative means to eight national registrations for securing a trade mark that has effect throughout the Common Market. The system will become self-financing unless perhaps it proves to attract very little custom. While there is no way of predicting accurately how much it will be used in preference to the existing national systems, or what it will contribute to lowering trade mark barriers within the market, it is likely to contribute something significant towards the major objectives seen by its proponents, even if it does so only gradually. From a British perspective, however, the introduction of a Community alternative built upon different premises from those of the national system could be a source of disruption and misapprehension to British business which would incur costs over a substantial period of time. In particular, the absence of any search or examination in the Community system would throw upon those with registered rights the need to monitor Community applications for later conflicting proposals. As already suggested, if this came about, the British would probably be drawn to consider whether the national system should not be similarly adapted. That would be a major change and one quite contrary to the strong recommendation of the Mathys Committee in 1974. It presents a problem hut for which the Commission's plans, if suitably amended in detail, could be unequivocably endorsed". Reference should also be made, though I shall deal with this in one sentence only, to Appendix D, which sets out in such admirable detail the potential effect of the directive on existing British trade mark law. I am quite sure that British industry and commerce will be very much in the committee's debt. I should indeed have said in the debt of your Lordships' House as a whole, for, without this House and without this committee of your Lordships' House, much of this, or indeed similar vital work in the EEC field, would never be done.

I wish that I could be as complimentary to the Government as I wish to be to your Lordships' House and to the committee. I am so glad that the noble and learned Lord referred, in his usual moderate terms, to the matter about which I want to say a few words in conclusion. The draft directive and regulations presuppose a trade mark not only for goods but also for services. When the regulations and the directive become effective, those with national registration of trade marks for services will have certain essential rights. Those who have not, will suffer.

We do not have registration of trade marks for services, and your Lordships have been reminded by the noble and learned Lord, Lord Scarman, of the short Bill recently granted a Second Reading in this House and which on Wednesday of this week is to have its Committee stage. It was introduced as your Lordships have been told, as a Private Member's Bill by the noble Lord, Lord Campbell of Alloway, who I see with pleasure is to speak later on in this debate. The Bill aims to protect our vital service industries and to give us some important experience by providing for registration of trade marks for services in line with the recommendation of the Mathys Committee which reported many years ago. The Government's response on the Second Reading of the Bill was negative and unhelpful in the extreme.

The Government advocated through the courteous voice of the noble Lord, Lord Lyell, a dangerous delaying policy when the Government must know that waiting can well be disastrous for the service industries and put them at a grave potential risk and disadvantage. I had to say then, and I in no way retract that statement, that I regarded the speech of the noble Lord, Lord Lyell, on behalf of the Government on that Second Reading as nothing short of disastrous. I appeal to the Government—and I hope very much that the appeal will be successful—supported on this occasion, as the Government will note, by the voice of the noble and learned Lord, Lord Scarman, on the Cross-Benches with all the authority that he commands, that they should think again upon this very important matter and give the support to the Bill of the noble Lord, Lord Campbell, which it so much deserves.

I conclude by again expressing our appreciation of the excellence of this report to its authors and in particular to the noble and learned Lord, Lord Scarman.

9.38 p.m.

Lord Renton

My Lords, first let me say that I am very glad indeed that the noble Lord, Lord Mishcon, said what he did about the importance of the Bill which has already been given a Second Reading in your Lordships' House, introduced by my noble friend Lord Campbell of Alloway. I should make it clear at the outset that I am not quite so hopeful, as was my noble and learned friend Lord Scarman and the noble Lord, Lord Mishcon, of this draft directive and these draft regulations being capable of adaptation in such a way as to make them acceptable in this country. I think that there are some fundamental difficulties and I shall be referring to them.

I have sat for the past two Sessions, and still do, at the feet of the noble and learned Lord, Lord Scarman, in Sub-Committee E. Most of our work has involved the scrutiny of draft directives and draft regulations issued by officials of the European Commission in Brussels in pursuit of their laudable aim of approximating, under Article 100 of the Treaty of Rome, some very different laws of member countries. It has been a complex and difficult task for us to scrutinise those drafts, but we are indebted and grateful to the noble and learned Lord, Lord Scarman, for his prodigious energy in mastering them and for the clarity with which he has led us through those vast labyrinths. Sometimes I must confess that it has been a rather turgid task.

Although Article 100 of the Treaty of Rome refers to "approximation" of laws, the word "harmonisation" has come to be used more often to describe the process. But it seems to me that those two expressions have different meanings. "Aproximation" means something not far short of assimilation in our language and I think in the French language, in which the same word was used in the original draft. But "harmonisation" presumably means something less, something different. It means the elimination of conflicts between laws and legal systems which are at variance with each other, so that trade may flow more smoothly through the Community.

There is a valuable work available in the Library of your Lordships' House called the Oxford Companion to Law, the present edition being that of 1980. It says: Harmonisation of laws is an alternative to approximation. In English approximation goes further than harmonisation or co-ordination, but falls short of unification". In the Oxford English Dictionary one finds that "harmony" is mostly a musical term but, to the extent that one can find a current meaning for it, it means "consistency" in this context or the "process of making consistent".

On most of the occasions on which we have had to consider their drafts, the gentlemen in Brussels have expressed them as being "in order to approximate". But if they really are attempts to assimilate, as I have sometimes suspected that they are, then instead of creating harmony and removing conflicts, they may even cause conflicts. It is in that context that I think we need to examine this draft regulation and draft directive, and with that danger in our minds.

The problem here—and it has been referred to by the noble and learned Lord Lord Scarman, and the noble Lord, Lord Mishcon—is that in the EEC there are three distinct systems affecting trade marks. Of course, each system covers only part of the EEC. I need not go into the details of these three systems because they are well set out early in our report in our comments in paragraphs 5 to 8 inclusive. One must bear in mind that the traders in each system have not only become accustomed to the way in which it works, but have acquired rights which they will never willingly relinquish.

In paragraph 72 of Appendix A we find that our splendid expert has pointed out that, in so far as it interferes with rights, the draft directive may be in conflict with Article 222 of the Treaty of Rome. The gentlemen in Brussels recognise the difficulties and so, instead of trying either to approximate or even to harmonise the three systems, they have introduced a fourth system to cover the whole of the Community—this Community trade mark—while leaving the three systems to go on operating each in its own limited sphere, unless it conflicts with the new and fourth system of the Community trade mark.

Of course, that in itself involves problems of reconciliation in order to enforce the Community trade mark. We are up against this problem, that the Community trade mark involves a form of registration which confers its own rights which will have to be protected on a Community basis. In order to ensure that that is effective, each country will have to alter its laws in order to incorporate what are described in paragraph 18 of our part of the report as the five techniques for adjusting conflicts between earlier and later claimants to similar marks.

Unfortunately, those five techniques do not adjust the conflicts. I venture to say that they even create fresh conflicts. We recognise this. We have pointed it out in paragraph 36. As the noble and learned Lord, Lord Scarman, has mentioned, there are two problems. We feel that full protection should be given to common law rights which in our country are enforceable by passing off actions and which traders will not relinquish—the bone is in the dog's mouth; they will not let it go.

Secondly—this is a very serious problem to overcome—the proposed new Community trade mark system would make no provision for official search for prior conflicting registrations, nor would it make provision for an examination based on such a search. The result would be two alternative systems operating in the United Kingdom for registering rights. Each of those systems would be operating on different principles. It would be chaotic.

We have also seen in the draft directive and regulation, and in giving evidence, that those concerned have conceded harmonisation in this matter is not their aim. Indeed, it could not be an aim in the way they put it forward. What has not been mentioned by them, as far as I remember, is that by superimposing a new system of registration for the Community as a whole further disharmony would be created. it would be a self-defeating exercise. Therefore, it follows, in my opinion—I am speaking personally—we should advise Her Majesty's Government not to agree to the drafts as they stand. As I have said, I seriously doubt whether they could be made more satisfactory and acceptable to the United Kingdom, if they were amended. But one must be candid. There would obviously be advantages as the noble and learned Lord, Lord Scarman, has pointed out, and as we say in our report, if—and it is a very big "if"—a suitable Community system could be contrived and introduced which did not give rise to conflicts which I have mentioned.

It is tempting to say that in our country we have registration of patents which works well and is self-sufficient; they stand on their own without common law rights to enforce them. We have over a large part of the country registration of ownership of land and titles to land and over land. To the extent that we have it, that works well also. A European may very well say, "What are you fussing about? In some spheres you have got very well used to registration; you have shown that it works".

But that is not all in this case, because we have these common law rights which we find work smoothly, with our rights of ownership within the meaning of article 222, and we cannot lightly disregard them. Therefore, although this is an important matter, and in a perfect world and uttering a counsel of perfection one could wish that there could be something better in the Community, in my own humble, respectful opinion I do not think that the proposals in the draft directive and draft regulation provide the answer.

9.51 p.m.

Lord Lloyd of Kilgerran

My Lords, I also should like to congratulate the noble and learned Lord on his speech and on having chaired Sub- Committee E with his usual charm, competence and remarkable insight in dealing with basic problems—on this occasion international problems associated with the development of Community trade marks. There is no doubt that his long and lucid speech this evening and his report will be read with great interest throughout the Community, and indeed throughout the industrial world, as an important contribution to progress in the long history of trade mark discussions on the European trade marks, which have already lasted over two decades.

I agree with the noble and learned Lord, Lord Searman, that the sub-committee were very fortunate indeed in having had the services of such a distinguished lawyer as Professor Cornish as their specialist adviser. I have no hesitation in saying from my experience of these international trade mark matters that Professor Cornish's two papers, already referred to, are themselves alone a great contribution to progress in this difficult field of European trade marks. But, as the noble Lord, Lord Renton, has indicated, there are profound difficulties.

The evidence from United Kingdom industry submitted to the committee was most discouraging to those who wished to see an EEC trade mark adopted in industry in the near future. Most witnesses, as the noble and learned Lord said, supported the theory of having one trade mark for the EEC, but all from industry rejected the present proposals. Thus, at page 45, the representatives of the Chartered Institute of Patent Agents, who are in close touch with UK industry, submitted that the proposals were quite unacceptable. At page 53, the Institute of Trade Mark Agents thought that with appropriate amendments there could be a workable system.

It is perhaps significant that only three companies gave evidence directly to the committee. Thus the Wellcome Foundation, in an interesting memorandum at page 142, stated that the British industry and commerce does not need new experimental ideas in the field of trade marks, but rather requires to be left alone with existing concepts which should be made to work more consistently. At page 143, British-American Cosmetics Limited, owners of over 1,200 trade marks in the EEC, were wholly against the EEC trade mark registration system as it stood. The Mars Group of Companies, in a long memorandum at pages 121 to 130, suggested that the proposed legislation in theory was acceptable, but that it was conditional upon the adoption of a large number of amendments. I thought that the memorandum of the Association of the British Pharmaceutical Industry at page 106 was particularly helpful. This UK industry has a vast export trade. The association's view was that the present drafts should be entirely abandoned and rewritten, as they were totally misconceived in the context of British industry.

At the beginning of his speech, the noble and learned Lord, Lord Scarman, mentioned the long history of international discussion on trade mark matters. As I have indicated, to my personal knowledge they have lasted over 20 years. Many of us take the view that much of this history ranks so far as some of the most boring and useless in the history of any jurisprudence.

To add a personal note, I have with me a small book of 100 pages which enshrines speeches made in Washington DC on 10th and 11th November 1962, over 20 years ago, at a conference called by the Georgetown University Law Centre to discuss the then proposals for a European trade mark convention. Georgetown University invited seven lawyers from countries of the EEC, and I had the honour of being asked to give the British view relating to the then Common Market law, which seemed to he understandable in that period.

The basic European trade mark model at that time had been prepared largely by a German lawyer, an old friend of mine, Dr. Rotsche, who, at the conference, had been designated father of the Common Market trade mark, which was then expected to be born very soon. Unhappily, however, that was not to be the position. After discussing aspects of the proposed convention, I said: Once the basic principles of the unique form of trade mark rights are understood, it should not be difficult to formulate a European trade mark law which will not hamper or restrict unnecessarily the commercial activities of the business world". I concluded my speech on that occasion—when a welcome was given by all lawyers to that trade mark convention of 1962, which then we all understood and thought would be practical and useful to the Community—by quoting (I apologise if I am taking up your Lordships' time, but I think these words are very relevant) almost as a warning from some of the lectures given by the late Lord Radcliffe, in Illinois in 1960 under the title, "The Law and its Compass". This is a passage which, as I said then and believe today, still indicates in general terms the basic approach towards drafting the new trade mark law: Law needs at all times a compass to steer by. I hope I do not say anything impertinent if I say that it is not lawyers themselves who are most conscious of this need. It is possible to perceive that the lawyer often stands too close to his subject to see clearly in what direction he and his fellows are going". lie concluded by saying: What drives us back from time to time to search further, to question outright what are our purposes, is the insistence of the layman"— I interpose by saying that I would include on this occasion British industrialists— the man who is not versed in law, but who stands for something more, for some indication of a sense of right and wrong that is not merely provisional or just the product of historical proceeds". In the light particularly of the reports of Professor Cornish to which I have referred, I suggest—and this is my personal view—that it would be helpful now if United Kingdom industrialists were to take up the initiative in this matter of an EEC trade mark law to ensure that something may be produced which will not hamper or restrict unnecessarily the commercial activities of the business world. I mention to the Government that there is a danger that British industry may have foisted upon it a trade mark law which, even in the long term, will be a source of disruption and great expense, and will be damaging to industry. I should like to echo the concluding remarks of the noble Lord, Lord Renton, when he wondered whether it was wise to proceed further in the near future with EEC proposals of this kind. Naturally, one does not wish to introduce any political atmosphere, but I think it worth quoting the view of the committee to be found on page xxxviii. The committee state—and I commend the passage to the Government: The uncertainties surrounding the effectiveness of a Community mark system go not so much to the legality of the proposal as to the political wisdom of establishing it at this stage of the Common Market's development".

10.1 p.m.

Lord Campbell of Alloway

My Lords, like other noble Lords, I wish to congratulate the noble and learned Lord, Lord Scarman, and the members of the Select Committee, in particular all those who have already spoken in this evening's debate, on the report. As has been truly said, it is a monumental contribution to the subject. I should also like to thank in particular the noble and learned Lord, Lord Scarman, for his authoritative endorsement of 'the need for the Trade Marks Act 1938 (Amendment) Bill to protect our high technology and our service industries. Further, I wish to thank the noble Lord, Lord Mishcon, and my noble friend Lord Renton for the kind and constructive things that they have said in this regard.

The report is of vast importance to industry and consumers, for these symbols of competition—trade marks—are designed to avoid imitation, eliminate confusion, underpin goodwill, and afford a measure of consumer protection. As usual, we Anglo-Saxons are the odd men out so far as our Napoleonic Code partners are concerned. As has been explained, far more eloquently than I can explain it, by the noble and learned Lord, Lord Scarman, this is because the registration system for trade marks developed from the common law of "passing-off", and both systems operate side by side, giving primacy to reputation which is established by use.

So the question is, whether to set up a Community trade mark for goods and services which is unitary throughout the European Community; whether we should accept the proposed régime, which conflicts with our own law, and so involve by the directive amendments to our own law to ensure that both systems remain in step. We are concerned here with what was referred to by the noble and learned Lord, Lord Scarman, as the "heavy impact of the directive"—a graphic and accurate description.

In my submission the draft regulation and directive are unacceptable without substantial amendment. The case for the amendments—and I say this in order to be brief—is made out with compelling clarity in paragraphs 36 to 38 of the report. Some are of fundamental importance, such as paragraphs 36 and 38(a), which involve a basic amendment of Article 7 of the regulations to allow opposition to the grant of a Community trade mark based on common law rights, as distinct from prior registration under national law; as has already been said, the only priority claim acknowledged, for example, in France. Other amendments are of minor consequence; such as, for example, paragraph 37(a) where changes of detail are required in connection with the rights conferred by a registered trade mark. But there is also the important question, and the very difficult question, of injunctive relief. This is neither the time, nor, I suspect, the place, in which to consider the difficulties that arise in that connection. But I point to them so that my noble friend the Minister may perhaps take aboard that there is a very serious difficulty that arises in connection with injunctive relief on which no doubt his department will advise him in due course.

Although it is not the object of these proposals to harmonise national laws, as far as we are concerned, that would be the effect, resulting in very substantial amendments. It is wholly idle to pretend to the contrary. No doubt in the long run there will have to be a measure of compromise. Other member states have their problems in this sphere—but not as great as ours. If compromise reflects the art of negotiation, then this report provides the essential material. If the reality of the situation is—and here, with the utmost respect, I differ a little from the approach of my noble friend Lord Renton; and your Lordships may think that it is the reality of the situation—that sooner or later we shall have to compromise, so be it. But I am approaching it from a slightly different angle from the equally tenable intellectual approach of my noble friend Lord Renton.

I am approaching it from the problem that the reality of the situation is that sooner or later we shall have to compromise, that this report is gold dust because here is the material for our negotiators to use when they seek to negotiate to achieve the compromise; so that at least our Ministers shall go to the negotiating table armed not just with some departmental brief but, one may also hope, with your Lordships' unqualified approval of the reservations contained in this invaluable report and that they, our Ministers, shall heed this warning that the two instruments as they stand will not do.

10.10 p.m.

Lord Lyell

My Lords, I am sure that the whole House will agree that we have had an outstanding debate this evening. Speaking for my own part as one of the non-lawyers to have my name on the list of speakers this evening, it has been a privilege and a pleasure to hear such a massive and complicated subject so excellently and cogently described for us by such a leading expert as the noble and learned Lord. Lord Scarman. It has been a tremendous education to your Lordships and, I may say, to Government spokesmen who appear from time to time in this position when—as has been pointed out by several of your Lordships this evening—all is not necessarily sweetness and light on this particular subject. I shall spare my comments on the various criticisms that have come my way in respect of my earlier deeds at this Box. I shall have a few words to say about them later.

I hope that your Lordships will hear with me if I preface my remarks on the report which is before the House this evening with one or two general observations on the subject of trade marks since we believe in setting forth the Government's position on this complicated, important and difficult subject at the outset. As I am sure noble Lords are aware, trade marks play an important part in the commercial success of many companies, both large and small, in the United Kingdom by providing that vital link between the goods or services on offer and the customer. Satisfied customers will look for the same trade mark when they make future purchases. Because of this a company can found its marketing on a trade mark which may consequently acquire real commercial value in its own right.

Clearly if the system is insufficiently secure to prevent unauthorised people from using the trade mark, there will be various adverse effects. Not only will the company lose sales but its reputation will be damaged. The consumer too will suffer by not receiving the goods he expected. Hence the importance of trade mark protection for companies and consumers alike. Any proposals therefore for amending our trade mark laws must be examined with the greatest care—as indeed they have been in the report which has been presented under the aegis of the noble and learned Lord, Lord Scarman. With this care in mind, we unreservedly congratulate the Select Committee for the careful attention they have given to these proposals for a Community trade mark system.

As your Lordships will be aware, every country in the European Community has its own system of trade mark protection effective in its own territory—a British registration, for example, is only effective in the United Kingdom. This proposal for a Community trade mark has an altogether broader scope. It treats the Community as a single market and allows a trader to get a registration which is both effective and is protected throughout the Community. Of course, the Community mark will not transform the Common Market overnight; but it will be another step in the direction of a unified market.

Goods carrying a Community trade mark will circulate freely thoroughout the Community, and traders will therefore be encouraged to think of the Community as their domestic market. Thus, we fully support the view that a Community trade mark is a logical development of the Common Market.

At the same time, it is clear that there will be a continuing need for our national system. We have heard that reiterated time and time again this evening with great strength and great clarity. There is a high proportion of companies which trade in a single country, and they will therefore be interested in national trade marks only. The Community trade mark, therefore, will need to co-exist with the national systems of the individual member states. These national systems differ from each other in the scope of the exclusive right granted and in many other respects, and this could obstruct the free flow of goods. This point alone calls for the harmonisation of national trade mark laws in the Community, and this is sought by the directive.

One more reason for the directive is to reduce the anomalies that could exist between Community trade marks and national trade marks, which could well cause difficulties for traders. It has been argued at various stages, though not necessarily in your Lordships' House, that it is sufficient to harmonise the various national laws and that the proposal for a Community mark should be shelved until more progress has been made towards an integrated market. No doubt every Community proposal meets the same response, but the Community trade mark is itself a factor in integrating the market. It is a way in which such progress can be made. The Community trade mark will certainly not come about tomorrow, and I am sure that now is the right time to be looking at these proposals and identifying the problems which exist, as has been done with great clarity by this report, and working towards a system which is acceptable to everybody.

Perhaps I may now consider some of the major issues dealt with in the report. I hope that your Lordships, and indeed the noble and learned Lord, Lord Scarman, will forgive me, but it would be impossible at this hour, and indeed virtually impossible without an endless peroration, to cover all the major and important issues bound up with this subject contained in the report.

As your Lordships will have noted, the report concludes that a Community trade mark system is feasible, subject to certain fundamental difficulties being overcome. The first difficulty which has to be overcome is the need to give full protection to common law rights. It was most gratifying to hear the forthright declaration of the noble and learned Lord, Lord Scarman, on this subject. Perhaps I may explain at this point that the owner of a trade mark in the United Kingdom can acquire rights in two different ways. In the first way, mere use of the mark gives him rights at common law—the so called "passing off" rights. In the other way, he can acquire rights by registration. When a trader acquires a mark, he acquires the right to prevent others from using his mark and, in addition, a number of other rights as a result of its use.

The first problem that we encounter with the regulation and the directive is that they would deprive the proprietor of a registered trade mark of these additional rights. This would have very serious consequences throughout the Community and, as a result of representations made by us to the European Commission, it is clear that the draft will be revised in order to avoid this situation.

One more difficulty raised by the report, still dealing with common law rights, arises because the regulation would not permit the user of an unregistered trade mark—a trade mark which has only common law rights—to oppose a later application for a Community trade mark. He would need to wait until the application had been registered and then would need to seek invalidation of the registered mark. All this would take time and, frankly, because of the increased difficulty in removing a mark from a register as opposed to its becoming registered, would place the user of an unregistered mark at a considerable disadvantage.

We have also made proposals to the Commission in order to safeguard the position of the users of unregistered marks. These proposals, I am glad to say, have been well received by other member states. We look forward to seeing amendments to the regulation to meet this most important point.

Perhaps I may refer at this point to the problem of service marks, which is tied up with the Bill of my noble friend Lord Campbell. The Government did not support my noble friend's Bill at the Second Reading just before Christmas, on the grounds that the time was not ripe, having regard to the present Community proposals and the current state of the trade marks registry. If the draft proposals are amended to give full protection to common law rights, as urged by the report, many of the fears voiced by users of unregistered service marks would disappear. If these are not amended, as we have urged in Brussels, then we shall have time to consider what precisely should be done.

So far as the trade marks registry is concerned, at the present time there are serious delays in processing new applications. This is a very severe disadvantage for British business, and we are making very strenuous efforts to improve the position. But it would not help British business, nor would it help the registry, to, perhaps, double the delays by adding service marks to the statute book at the present time.

Lord Mishcon

My Lords, before the noble Lord the Minister continues and because the House is so anxious, as has been made clear in this debate, could he tell the House why the Government could not consider support for a Bill which would contain a starting date for registration which was sufficiently far ahead to enable the clearing up, which he thinks is a barrier in the trade marks registry at the moment, to take place?

Lord Lyell

My Lords, if the noble Lord believes that my noble friend's Bill meets the criteria that he mentioned, I hope that I have given a preliminary answer as to why we were not able to support it. If I am correct in assuming that the noble Lord wishes me to give further reasons why we could not support my noble friend's Bill, perhaps he could wait, because we are going to deal with it in two days' time. But if he is asking a further question which is away from my noble friend's Bill, or is about wider powers, then I am afraid that I could not give him an answer tonight. Perhaps I may study his remarks and write to him.

Lord Mishcon

My Lords, I hope that the noble Lord will not think I am too persistent. I was not, in fact, mentioning a point which he had not himself brought to the attention of the House as a reason for not supporting the Bill, and that was the present congested state of applications in the trade marks registry. If the noble Lord the Minister wishes to take time to consider the remark and cannot answer tonight, then, of course, I shall be courteous enough to bow to that. But what I am asking him specifically is: if this is one of the points that he wishes to bring into this debate, could he inform us why the Bill could not have support with a starting date for registrations which takes into account the relief of the congestion which is now taking place?

Lord Lyell

My Lords, I shall certainly have to write to the noble Lord, because we are treading over the ground that was covered extensively by many of your Lordships on 22nd December last year. But I can assure the noble Lord and your Lordships that I shall read carefully what he has said, and I hope that I may be in correspondence with him. But I could not go further on my noble friend's Bill than I have gone tonight in relation to this debate on the noble and learned Lord's report.

Lord Campbell of Alloway

My Lords, would the noble Lord—

Lord Lyell

My Lords, if the noble Lord will be brief.

Lord Campbell of Alloway

My Lords, I am always brief. Could the noble Lord consider why this should be the seventh excuse that Her Majesty's Government have given for not introducing service marks legislation and why, if it is a good excuse, and a genuine excuse, it was not produced before?

Lord Lyell

My Lords. I do not have the Hansard for 22nd December with me, but—

Lord Campbell of Alloway

I do.

Lord Lyell

My Lords, the noble Lord says that he does, but I beg him and the House not to cover again all the ground that we covered on 22nd December. We are going to have a chance to do that on Wednesday. So far as I am aware, this problem of congestion did arise. I think that I may well have mentioned it, but I do not have Hansard with me.

May I, however, attempt to answer the question which has been raised by the noble Lord, Lord Mishcon? If I only skirt around it, I hope he will forgive me; I shall complete my answer in writing. I am informed that if a consensus emerged that the present British system of search and examination could not exist side by side with the Community system and that as a result the British system should be abandoned, we believe that there would be no sense in setting up an expensive search and examination system for service marks now, only to disband it again in a few years' time. That is a preliminary answer to the question that has been raised by the noble Lord, Lord Mishcon. I promise that I shall study the full thrust of the noble Lord's fairly weighty questions. During the two interventions which he made, he covered a number of points. I shall certainly read Hansard with great care and will write to the noble Lord.

I revert to the report which is before us this evening and turn back to the second major difficulty which was referred to in the conclusions contained in the report. It concerns the contrast between the British system, which involves a search and examination based on the search, and the proposed Community system, which makes no such provision. To put it plainly, the United Kingdom system is based on the public interest. That is to say, a careful search is made through trade marks already registered and we will not register a mark which conflicts with one already on the register. Over the years, this search has come to be regarded as extremely reliable. This is a great advantage to commerce in this country. If a firm applies to register a mark and nothing is found in the register, it is reasonably safe for the firm to go ahead and base its business on that mark. Unfortunately, in connection with the Community mark, a complete search would involve eight national registers. Some of these registers are, to say the least, of uncertain accuracy. In any case, they involve several different languages. The problems involved here are probably insuperable, although we would not say that definitely. For this reason, the system adopted for the Community mark is one in which owners of existing marks must protect themselves by keeping track of what is being placed on the Community register, and opposing as necessary. The report touches on this point and indicates, quite properly, that a state of possible confusion of marks in the market place is not a good one. They refer to the need for an acceptable solution.

There is no perfect solution, but I am sure that your Lordships would wish to know that we have already proposed adopting a British type system as regards Community marks. That is to say, prior Community marks at least should he searched to ensure that Community trade marks do not conflict with one another. In the long run, it may be that computerisation will offer the possibility of comprehensive searching of all national and Community marks, but of course we are not there yet.

As the report points out, we would still have the problem that there would exist in the United Kingdom marks on two different registers. A mark on the national register could be presumed valid, in view of the strict national procedures prior to registration. On the other hand, a mark on the Community register would not have the same presumption of validity. Of course this is a far from ideal situation. Whether these two systems could co-exist happily is difficult to say, but, if the number of Community marks ever became a significant proportion of the total number of registered marks used in this country, then attitudes to the necessity of searching for British marks would very likely be changed.

There is one further matter which is not dealt with by the report but which I feel I should draw to your Lordships' attention because of the concern of industry. This is the effect of the directive on existing registered trade marks. The purpose of the directive is to ensure that trade marks enjoy uniform protection under the legal system of all member states. This is perfectly feasible for post-directive marks, but we have considerable doubts about applying the directive to existing marks—in other words, making the directive retrospective in application.

The directive will have the effect that it will change the rights attached to certain marks, and therefore perhaps bring into conflict many existing rights on which long-established business and commercial dealings are based. The effect of the directive could well be to disrupt well-established trading patterns without any compensating advantages. If I mention that there are at the moment 250,000 trade marks on the British register, your Lordships will appreciate the size of the problem. Your Lordships will also gather that we are not at all convinced that making the directive retrospective is at all necessary.

The report raises a number of other points of detail and in general the Government would not dissent from the conclusion arrived at. However, we will just raise a note of caution on the fascinating issue (to a layman at least) of international exhaustion. Under the proposals, if a manufacturer sells trade marked goods in one country, he may not use his trade mark rights to stop a third party from buying up those goods in the first country and re-selling them in a second country. That is to say, once the goods have been sold in one place, the trade mark right has been "exhausted". This principle of exhaustion of rights already applies within the Community and arises out of the free movement of goods principle of the EEC Treaty.

This seems fine when applied to the Community. However, the proposals would extend this principle on a worldwide basis, subject to certain exceptions. The report concludes that the list of exceptions is inadequate to safeguard British industry and it proposes some additions to the list. It is not immediately clear that the unilateral adoption of this principle of international exhaustion by the Community would be of lasting benefit unless our non-Community trading partners were to do the same. Situations may arise where our Community industries would be disadvantaged by cheaper versions of their products coming into the Community, without the compensating advantage of cheaper versions of Community products being free to flow in the opposite direction. We shall need to look very carefully at the list of exceptions to ensure that Community industries are not disadvantaged by the adoption of such a principle. Indeed, we shall look at the principle itself; it may be that exceptions are not enough.

Your Lordships will also be aware that this Community trade mark proposal envisages the establishment of a Community trade marks office to deal with the applications. The Government have proposed London as the home of the Community trade marks office, and I would like to take the opportunity of repeating that proposal most forcefully this evening.

Your Lordships will be aware—as will anyone who has attended this debate or who reads it in Hansard—that the United Kingdom has a long tradition in trade marks, both nationally and internationally. Our trade marks registry is one of the oldest in the world, and, as the trade mark lawyers among us will know, it is situated nearby, in Chancery Lane. It is surrounded by a wealth of expertise in trade mark agents, patent agents and specialist lawyers. London is firmly established as one of the most experienced centres for trade mark activities of any city in the world and in our view would provide an ideal home for the Community trade marks office.

I have taken the opportunity of doing a little advertising and giving a gentle "plug", even at this late hour, for our great City of London. But, returning to the report itself, I will attempt to answer some of the points made by your Lordships. If I miss any, I assure your Lordships that I shall read Hansard very carefully; and I will certainly write to the noble Lord, Lord Mishcon, who raised a point of substance.

The noble and learned Lord, Lord Scarman, and the noble Lord, Lord Mishcon, both made powerful speeches. The only comment that I had before I stood up was, "My noble friend's Bill—nothing to report." Alas! that has been changed since I got to my feet. But I have nothing to add beyond what I have said this evening; we shall be coming to my noble friend's Bill on Wednesday.

My noble friend Lord Renton added—if I may put it this way, in all humility—very much "the Lyell touch" to our deliberations this evening. He spoke for me when he mentioned that he considered the attitude of traders to be that of "dogs with bones in their mouths". I do hope we shall be considering paragraph 36 in the main report as "the bone in the mouth report", and it might become as famous as the Terrapin v. Terranova case, let alone Hoffman Laroche v. Centrafarm BV, also mentioned in the evidence. I believe that the touch of my noble friend Lord Renton brought this subject of trade marks as it affects traders really to life in your Lordships' House. We also note the strong recommendation not to accept the regulation or directive.

Lord Lloyd of Kilgerran made his apologies to me and my noble friend and I pass them on to your Lordships; he had a train to catch. He quoted the evidence at the end of the report from many sections of industry, the pharmaceutical industry and the Wellcome Foundation. I note that he skipped the submission from the Scotch Whisky Association; possibly that was the error of a Welshman skipping over Scotland's influence on this major report. He mentioned the Association of British Pharmaceutical Industries and others, which brought back to me, and I am sure to others, memories of six years ago to the day when we started our deliberations on the Patents Bill, which became the Patents Act 1977. Perhaps the noble Lord has gone off to sixth anniversary celebrations. I shall note the noble Lord's comments with care.

My noble friend Lord Campbell raised one or two very valuable points, apart from his Bill, which we shall be considering later. I was particularly grateful for his reference to the report before us as gold dust for our negotiators. I think he has put it aptly, and I am grateful for that little nugget this evening. I think it encapsulates the debate beautifully for our future deliberations.

I have gone on longer than I intended at this fairly late hour; I hope I have not rambled. I do stress that the Government strongly welcome this report, and in particular we appreciate its constructive approach to the proposals before us and assure your Lordships and the authors of the report that their analysis of the areas of difficulty will be of particular value to us in our continuing negotiations in Brussels.

Lord Mishcon

My Lords, before the noble Lord sits down, he referred to international exhaustion, and I wonder whether he is aware of the fact that there is also exhaustion in Members of your Lordships' House. Would he be good enough, if he sees fit, to pass on to his noble friends who arrange the business of the House that it is really regrettable that a matter of such national and international importance on the work of a committee which worked so hard should be taken so late at night?

Lord Lyell

My Lords, my noble friend has added "late but not light". I shall certainly pass on the concern of the noble Lord to my noble friend the Chief Whip. I understand that the usual channels were in conversation earlier with the noble and learned Lord who introduced the report.

10.40 p.m.

Lord Scarman

My Lords, having heard the recent exchanges between the noble Lord, Lord Mishcon, and the Minister, I do not know whether I now rise as the white rabbit looking at his watch or as the dormouse waking up from the tea party. Whichever it is, this has been a stimulating and constructive debate. Each noble Lord who has contributed to the discussion has brought to it something new, something original, something sensible and almost always something constructive. One cannot often say that of a debate, whether it is in good time or rather late. I also welcome the attitude of Her Majesty's Government to the report, and I am delighted to hear the use that they hope to make of it in their deliberations.

I end by saying, let us not reject the principle in the proposal for a Community trade mark. The principle must be sound in any great trading area. In the great markets of the United States of America, Canada and Australia where, of course, there are different systems of law within a federal structure, one finds that in each great area it has been necessary, or it was found necessary, to introduce a unified trade mark law. That is all that we are trying to do in the European Common Market area which is now a worthy rival of those great trading areas. We would be very unwise to do without it.

Therefore, at the end of this debate I say to the Government, let us adopt the attitude of the Comptroller-General of Patents, Designs and Trade Marks, and see what we can do to reconcile this principle with existing national systems which must continue. If I were a betting man I would say that, perhaps sooner rather than later, the Government will be reconsidering their attitude to reforming the national law of the United Kingdom in regard to the protection that it affords to service marks. If they do they will have a double welcome from myself, as I sit down, thanking the House for the attention it has paid to this report and this subject.

On Question, Motion agreed to.

The House adjourned at seventeen minutes before eleven o'clock.