Copyright, Designs and Patents Bill [H.L.]

HL Deb 12 January 1988 vol 491 cc1153-221

House again in Committee.

Clause 218 [Powers exercisable for protection of public interest]:

On Question, Whether Clause 218 shall stand part of the Bill?

Lord Williams of Elvel

Before we pass Clause 218 there are two questions that I should like to put to the noble Lord. The first is a simple question of English. In Clause 218(1)(a)(ii) the expression in the Bill as drafted is, that facts found by the Commission in. pursuance of their investigations under section 49 of that Act operate or may be expected to operate against the public interest". I simply ask whether facts can "operate". It seems to me to be a very odd expression. It is not an expression that I recognise in the English language. Perhaps the drafting can be cleaned up.

The second question is of greater substance. The clause deals with reports made by the Monopolies and Mergers Commission under various sections of the Fair Trading Act or the Competition Act. As the Committee will know, the Monopolies and Mergers Commission has been charged under Acts other than the Fair Trading and Competition Acts to conduct investigations into certain aspects of certain matters.

Perhaps I may give an example which I cited earlier today in response to the Statement of the Secretary of State on the future role of the Department of Trade and Industry. The Airports Act contains a provision that the Monopolies and Mergers Commission may be required to make a report. As I recollect, I believe that the Banking Act and the Building Societies Act also have a provision to that effect. There are certainly other Acts. I suspect that the British Telecommunications Act and the Gas Act have some such provision. I speak from memory at the moment but I believe that almost every privatisation Bill that has come before the Chamber has a provision somewhere that as a last resort operation the Monopolies and Mergers Commission may be required to report.

It is perfectly conceivable that in a report under any of those other Acts which are not specified in this Bill the Monopolies and Mergers Commission might find that a monopolies situation exists in relation to design rights. I am not saying that it will happen but that it is conceivable. I suspect that Clause 218 is rather narrowly drafted. I should certainly like to see the Monopolies and Mergers Commission given the brief that, if it finds any transgression or infringement in any of its reports under any statute, the licence of right or the enforced licence which the Secretary of State can impose should come into play.

If one accepts that view, the subsidiary problem is that the public interest as defined in these other Acts—other than the Fair Trading and Competition Acts—is, as I mentioned in my reply to the Secretary of State, rather different from the public interest as defined in the Fair Trading Act and the Competition Act. We return therefore to the position to which I referred earlier this afternoon where it is unclear what the "public interest" is. It is differently defined in different statutes. I say no more than that. However, I believe that this is a matter that the Government may wish to consider. I do not think that the Monopolies and Mergers Commission or the Secretary of State should be restricted to the Acts that are mentioned in the Bill.

Lord Beaverbrook

I am grateful to the noble Lord, Lord Williams of Elvel. On the point that he raised about the use of the word "facts" and whether facts can operate, I would point out that in Clause 218(1)(a)(ii) the wording is that used in the Fair Trading Act. That is precisely why we have used it here.

On the noble Lord's second point, I think that we should look further at whether there are powers under other Acts which should be taken account of in this Bill. The noble Lord very kindly gave me notice a short time ago that he was going to raise this point. It is an important one and we shall look at this further. I cannot give him any commitment, but we shall look very carefully at what he has said.

Lord Williams of Elvel

I am most grateful to the noble Lord. I hope that in looking at this matter he will also consider the definitions of "public interest" in the different statutes because there may well be conflicting definitions of public interest which could impinge on the powers of the Secretary of State under Clause 218 as it stands.

Lord Beaverbrook

The use of the term "public interest" is very much based on Section 51 of the Patents Act 1977. However, I take the point that there is other legislation that impinges on this matter. We shall carefully consider that issue.

Clause 218 agreed to.

Clause 219 [Undertaking to take licence of right in infringement proceedings]:

Lord Lucas of Chilworth moved Amendment No. 295: Page 95, line 22, at end insert— ("(3) A defendant who denies infringement or challenges the validity of the design registration shall be entitled to give an undertaking to take a licence in case his defence fails; such undertaking shall be effective for the purpose of subsection (1); and if the defence fails the licence shall come into effect as from the date upon which the undertaking was tendered or application for a licence was made, whichever is the earlier.").

The noble Lord said: I beg to move Amendment No. 295 in my name on the Marshalled List. Clause 219 deals with undertakings to take a licence of right in infringement proceedings. My amendment is basically to limit the area of damages. As the wording of the Bill currently stands, in proceedings for infringement of design right and registered design—since Clause 244 of the Bill applies to this clause and to the same concept—the defendant would be obliged to choose between defending the proceedings or accepting a compulsory licence, if such were available. The defendant therefore must elect whether to take a licence or to defend the proceedings. If he believes that he has a good defence he will be faced with a somewhat difficult dilemma knowing that he will not have the option to take a licence if he is proved wrong. This puts the plaintiff at an unfair advantage in proceedings.

Surely it would be fairer if the defendant were to have the opportunity to continue the proceedings, but had to give an undertaking that in the event of his defence not succeeding he would take a compulsory licence. This could be backdated to the date of the undertaking. My amendment would allow that possibility. It would improve the position of a defendant who genuinely believed that he had a good defence, while not prejudicing the position of the plaintiff, who would ultimately be recompensed by the payment of the licence fee if he, the plaintiff, were successful in the proceedings. Nothing would be lost to him since the licence would be backdated to the commencement of the proceedings. I beg to move.

Lord Morton of Shuna

It is no doubt my fault. We have been on this Bill for some time and I get slightly bemused. The amendment talks about a "design registration". I thought that in this part of the Bill we were discussing an unregistered design. I fail to see that registration has to do with, or makes any sense in connection with, this part of the Bill. Perhaps the noble Lord, Lord Lucas of Chilworth, will explain that.

It also appears to me—and it may be my fault for not understanding it—to give an opportunity to apply for a licence of right to anyone who chooses to challenge somebody who had the design right at any time rather than at the restricted last five years of the existence of the design right. I may be totally misunderstanding the position, in which case I apologise to the Committee. But I fail to understand what the amendment is designed to do.

Lord Monkswell

I have interpreted the amendment slightly differently, in the sense that I presumed that we had a misprint in the second line and that "design registration" should read "design right". It seems to me that if the clause were agreed to there would be no incentive for a parasitical parts manufacturer to approach the original manufacturer for a licence of right because he could gaily carry on producing the goods. It would then be up to the original manufacturer to challenge him in the courts; at which time the pirate could say, "I shall apply for a licence of right", and get off scot-free. It would seem to me to nullify the Government's intention to get the two parties together during the period when the licences of right were available.

The other factor I have to stress concerns the safety implications. That is probably secondary to the implications of the clause in terms of the way it would operate vis-à-vis the licence of right provisions that we have already agreed.

Lord Lucas of Chilworth

Perhaps it would be right for me to answer those two questions. On the point raised by the noble Lord, Lord Morton, it does not matter whether the design right is registered or not. All I am saying is that an infringer may well suffer—

Lord Morton of Shuna

It does not matter a great deal if we are dealing with designs which have no registration. I do not understand how they will register anything. That is what baffles me about this reference to registration. At this stage we are dealing with the unregistered design right.

Lord Lucas of Chilworth

The noble Lord may be right and it is possible that I have not set down the amendment as clearly as I ought to have done. I am concerned particularly with the infringement of a design right. It seems to me that two penalties might accrue. All I seek to do in the amendment is to ensure that an infringer suffers one penalty only. It is as simple as that.

On the matter raised by the noble Lord, Lord Monkswell, nobody is suggesting—I should be the last to do so—that anybody should get off scot-free. All I am attempting to do is, as I said at the outset, to limit the area of damage an infringer may suffer.

8.45 p.m.

Lord Beaverbrook

I am grateful to my noble friend Lord Lucas for raising this matter. There are some problems with the drafting in his amendment, but I probably understood the thrust of it correctly. I am sure he will tell me if I have not.

The Government have no intention of forcing defendants to choose between contesting an action for infringement and giving an undertaking to take out a licence, thereby limiting the relief that can be awarded against them. If a defendant believes that he has not infringed a design right and is prepared to argue the case, he should be free to do so. Equally, if an infringement was committed at a time when licences were available and the defendant is willing to give an undertaking to take out a licence, he should be able to take advantage of Clause 219. I can see no reason why that should not apply where the defendant is defending the action because he believes he has not infringed. Indeed, in this case I can see every reason why it should.

In this connection it was our view that Clause 219 as drafted would allow that. Nevertheless, since my noble friend and I both seem to agree what the effect of the clause would be, it would be appropriate for me to consider the detailed drafting in the light of our debate. Therefore, if my noble friend will withdraw I shall do that and return to the matter at a later stage.

Lord Lucas of Chilworth

I am delighted that my noble friend the Minister knew what I was getting at, even if others perhaps did not. There is no collusion here, I can promise the Committee. I am glad that my noble friend will consider this matter and on that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 219 agreed to.

Clause 220 [Crown use of designs]:

On Question, Whether Clause 220 shall stand part of the Bill?

Lord Mottistone

Clauses 220,221 and 222 provide for Crown use of design right. We shall come to Clause 223 in a moment. Design right should not confer absolute monopoly on the proprietor of the design right and therefore there is no need for provision to be made for Crown use of designs, any more than there is in the case of copyright. However it is recognised that there may be a need for Crown use in an emergency and it is therefore suggested that Clause 223 should be retained. That clause will, however, have to be amended to enable it to stand alone.

It should be noted that Clause 222 extends the right of the Crown beyond the benefit derived by the proprietor of the design right, since the Crown has the power to set aside provisions in licences, contracts and so on relating to the use of any model, document or other information relating to design right.

The power which the Crown is seeking to give itself is a new power. It has been described somewhat vulgarly as licensed burglary. It has applied in the past for patents and registered designs, but not for copyright or the equivalent in design right, which merely protect against copying and do not give an absolute monopoly. If I may sum it up, a design right does not give rise to a monopoly right in the way that a patent gives a monopoly in an invention. There is always another way of designing an article. Under the clauses the Government are giving themselves powers to take the best of British design and have it second-sourced by some overseas manufacturer who will be only too pleased to be legitimately copying, tooling up at the behest of the United Kingdom Government and then supplying the rest of the world. There should be no need for the Government to have such a right.

If the Government want to buy Jaguar cars for their Ministers or pens for their clerks, they should not be able to take Jaguar or Parker design effort and pass it on to a third party without so much as a by your leave. To ask for that right is a monstrous proposition. I exaggerate the situation deliberately because of course Ministers will say on behalf of the Crown, "We should never dream of doing anything nasty like that"; but, as phrased, Clauses 220 to 222 give them that sort of power. It seems to me, particularly as it is a new power which they have never had before, that it is totally unreasonable even to want to claim it, let alone to put it in an Act of Parliament. I do hope that my noble friend will recognise that it is a monstrous thing that he is requiring and that he will be able at least to water down the clauses that I am objecting to, if not follow the suggestion that I make—that is, to take out Clauses 220 to 222 and give the Crown emergency powers under Clause 223, which would have to be beefed up to take care of the entire situation.

Lord Tordoff

My noble friend would certainly wish to support Lord Mottistone in what he has just said. It used the word "draconian" to me when describing these three clauses. I think the noble Lord, Lord Mottistone, has put the case very well. Why on earth do the Government want to put themselves in the position where they are seeking to take powers under this Bill which they will undoubtedly pretend that they do not want to use and indeed probably do not want to use? There has to be provision, one understands, in emergencies or in the case of war, but that is a totally different situation. The Government under these clauses are seeking to take powers far wider than they should. It is the job of Parliament and particularly this part of Parliament to challenge the Government when they seek to take such powers. Speaking from these Benches generally and in particular on behalf of my noble friend, we certainly support everything that the noble Lord, Lord Mottistone, has just said.

Lord Monkswell

I too should like to be associated with the sentiments that have been expressed. If the Government in an emergency situation needed to take the sort of action in question, I am sure that there would be no hesitation in granting them that power. In that respect I think there are amendments already down for Clause 223 which will confer that capability in a free-standing fashion.

I should like to make two other points. I hope the Minister will not take exception to some of the words that I may use, because I think that one of the problems we are faced with is that sometimes we in this Chamber can understand, although we may not like it, the Government's feelings, the Government's thrust and so on. However, there are other people in this country who will misconstrue what the Government seek to attempt here. We shall be open to the charge that the Government are setting themselves up with all the paraphernalia of a military dictatorship. I made the point that I hoped the Minister would not be upset by the words that I am using because they are not my words; they are a reflection of the state of mind and the attitudes that will be adopted by quite a number of people in the community outside.

The other aspect that I must touch upon is to say that this provision is quite uncharacteristic of the present Government. They believe in the free market ethic and continually preach it. The Minister himself is held to be an arch priest of the free market economy, yet the Government bring forward such a provision. I am sure, and I hope that the Government will take this on board, that all sides of the House will feel that there is a very large question mark over these three clauses, though none at all over Clause 223, which, suitably amended, we would all support.

Lord Beaverbrook

The noble Lord, Lord Monkswell, was quite right when he surmised that I should not necessarily go along with some of the terminology that was used; nevertheless, I assure him that I certainly do not take offence at the words "military dictatorship" even though he may have noted some surprise in my expression when he did use them.

However, Clauses 220 to 223 closely follow the corresponding sections of the 1977 Patents Act and concern what is known as Crown use. The first of these, Clause 220, is the basic provision giving government departments, for persons they authorise, the right to do certain things for the service of the Crown without infringing design right. There is nothing to stop government departments from agreeing terms of use on a voluntary basis, and they would normally expect to do so. But these provisions ensure that the Crown ultimately cannot be prevented from doing anything for the service of the Crown by exercise of design right. Crown use is of course subject to proper remuneration and other detailed provision in clauses which we shall come to later.

I hope that I made it plain in our earlier debates that design right is not a monopoly right but rather a protection against copying and, where there is no choice but to copy if a competing part is to be produced, then there is no protection at all. In spite of this, however, I still believe there are special reasons for including these Crown user provisions.

Take, for example, the needs of our armed forces. If there should arise an urgent need for a particular piece of equipment and the usual supplier be unable to meet this sudden increase in demand, should the armed forces be prevented from approaching another manufacturer to produce the equipment in question? I think not.

While of course it is true that the other manufacturer would be able to design his own piece of equipment as an alternative to that design by the original supplier, it could be totally unrealistic, possibly even dangerous, for the forces to have to wait for an alternative design to be created. I say that it would be dangerous because there will be parts which the man in the field needs to be able to recognise immediately, especially in very difficult conditions. In such circumstances an alternative design may not be readily recognisable as such. By the time a soldier has worked out that the particular part does the same thing as the part it is to replace, it may well be too late.

I should like to stress that this situation where the soldier in the field needs to be able to recognise parts of equipment with which he must be totally familiar arises not only in periods of declared emergency which would be covered by Clause 223. It arises in many situations where our forces are required to operate, and indeed it arises in training. It is of course the duty of the Ministry of Defence to secure the defence of the realm as effectively and as expeditiously as possible, and I firmly believe that these provisions should be included in the Bill to safeguard the public interest.

These provisions do not in any way represent a licence to steal. They are vitally important for the reasons I have given. As I have said, Crown use of the rights is properly remunerated.

Lord Monkswell

I must pick up the Minister on one point. He says that if there should be an urgent need for extra supplies of a particular component, the Government may have to go elsewhere. Surely that need should be able to be foreseen and written into the original contracts for the supply of the components? It would seem to me very strange if the Ministry of Defence negotiates a contract on the basis of a limited supply without any provision in that contract for increasing the supply. I must admit that if that is the case I am utterly appalled because, if we did get into an emergency situation, how would we ensure that we increased the production of the components that were required in an emergency?

9 p.m.

Lord Beaverbrook

I must say that I believe the noble Lord has reached an amazing conclusion. No doubt the Ministry of Defence anticipates the demand for particular components and spare parts, and no doubt they are covered in contracts. I am speaking of the exceptional case over and above the normal requirements for spare parts or extra components and not cases where a particular supply requirement has been omitted. That conclusion should not be drawn at all.

Lord Williams of Elvel

This is all very well and I accept the view of the noble Lord that anything which concerns supply to the armed forces and defence should be exempt from design rights. I have no particular difficulty with that view. I begin to join with the noble Lords, Lord Tordoff and Lord Mottistone, in discussing Clause 221(1) (a) and (b). The Bill as drafted is perfectly clear; to do anything for the purpose of supplying articles for the services of the Crown. It is not simply for the purposes of defence and I believe that all members of the Committee will agree that defence is a major consideration. We should not wish to do anything which prejudices the defence capability of the United Kingdom. This issue goes much wider than that. The clause provides that a typewriter, which may be supplied to the Department of the Environment, or whoever, should not infringe the design right. The Department of the Environment, the Property Services Agency, or whoever, can sell the typewriter without any infringement of the design right. Therefore the issue is much wider than defence. I hope the noble Lord will do the Committee a favour by moving away from the defence side of the matter (with which we all agree) and looking at the wider situation by asking whether there is the possibility that we may cover defence in the Bill, even outside of an emergency. However, to give a blanket authority to all government departments for whatever reason seems to me to be somewhat excessive.

Lord Tordoff

I should like to reinforce the noble Lord's comments. The Minister has put forward a convincing case in relation to specific circumstances and none of us has disagreed with that. If the specific circumstances might exist, nobody will resist that provision being written into the Bill by the Government at a later stage. However, as the noble Lord, Lord Williams of Elvel, says, the Bill as drafted is too all-encompassing. It covers the whole range of government activity and it is the duty of Parliament to resist the Executive when it tries to take such powers unto itself.

Lord Beaverbrook

I am grateful to the noble Lords, Lord Williams of Elvel and Lord Tordoff, for accepting the argument that I put forward regarding the armed forces. Without commitment, I am prepared to see whether the clause as drafted is too wide on this point. I take notice of the example given by the noble Lord, Lord Williams, of a department that has nothing to do with, or is unlikely to have anything to do with, the argument that I have put forward concerning the armed forces. It is on that basis that we shall look at the matter again without commitment. If something can be put forward by the Government we shall return to the matter at a later date.

Lord Mottistone

I deliberately did not refer to defence in introducing my objection to Clauses 220, 221 and 222 for two reasons. First, the provision enables the current practice of the Ministry of Defence of commandeering designs and much later deciding on the non-market price to pay for them, to be extended to an area to which this practice does not at the moment extend. Therefore it has the kind of powers about which my noble friend was talking in a wide range of such matters. It is questionable whether it needs to be extended in this area in any event. I am not altogether sure that the ministry wants that, but one cannot talk about that publicly. I believe that the argument about defence therefore should be forgotten.

My noble friend has said that he will look at the matter without commitment. That is fair enough because we are speaking of old clauses. Perhaps the argument could be centred on non-defence areas, and on areas where an argument for defence has been extended more widely. Having done that, perhaps the Government may wonder whether defence requires the extra power and they may find that it does not need that either. I hope that there will be a serious look at this matter, more than time would normally permit, because it is a fundamental issue.

Lord Beaverbrook

I should like to make clear to my noble friend the fact that I do not intend to look at the matter in respect of defence or the armed forces. I believe that that argument has been accepted by the Committee, and I can make no suggestion to my noble friend that I shall look at the matter in respect of the armed forces.

Clause 220 agreed to.

Clauses 221 and 222 agreed to.

Clause 223 [Special provision for Crown use during emergency]:

Lord Tordoff had given notice of his intention to move Amendment No. 295A: Page 98, line 23, leave out ("the powers exercisable in relation to a design by virtue of section 220 (Crown use) include power to") and insert ("a Government Department or a person authorised in writing by a Government Department may without licence of the design right owner").

The noble Lord said: It had not been my intention to move the next two amendments in the name of my noble friend Lord Lloyd of Kilgerran. However, in the light of comments made by the noble Lords, Lord Mottistone and Lord Monkswell, I wonder whether they wish me to move them formally in case they had points that they wished to make. If that is not the case, I shall not move the amendments.

[Amendment No. 295 A not moved.]

[Amendment No. 29 5 B not moved.]

Clause 223 agreed to.

Clauses 224 to 232 agreed to.

Clause 233 [Remedy for groundless threats of infringement proceedings]:

Lord Mottistone moved Amendment No. 296: Page 102, line 42, at end insert— ("( ) Proceedings may not be brought under this section for a threat to bring proceedings for an infringement alleged to consist of making or importing a product for disposal.").

The noble Lord said: This new subsection is taken from the Patents Act 1977 and is intended to bring the threat provisions contained in the Copyright, Designs and Patents Bill into line with the Patents Act 1977 rather than the Registered Designs Act 1949. The purpose of this amendment is to make it easier for proprietors to notify potential infringers that they intend to take legal action against them without incurring the risk of a threats action against themselves.

It should be noted that the real damage caused by unjustified threats occurs when they are issued to a manufacturer's customer rather than to the manufacturer itself. The proposed amendment still leaves such behaviour as actionable. I beg to move.

Lord Beaverbrook

My noble friend has raised a good point. It is true that Clause 233 is based on the provisions of the 1977 Patents Act. It is also true that his amendment would include a provision which is to be found in the 1977 Act but not in Clause 233 of the Bill. I must say that at first sight I have some sympathy with his view.

There is, however, a delicate balance to be drawn here which we will need to consider carefully in the light of what has been said. If my noble friend will be kind enough to withdraw his amendment, I undertake to return with our considered view at a later stage.

Lord Mottistone

I am grateful for my noble friend's undertaking and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 233 agreed to.

Clauses 234 and 235 agreed to.

Clause 236 [Countries enjoying reciprocal protection]:

[Amendment No. 296ZA not moved.]

Clause 236 agreed to.

Clauses 237 to 242 agreed to.

Clause 243 [Registrable designs]:

Lord Beaverbrook had given notice of his intention to move Amendment No. 296A: Page 107, line 15, leave out from ("registered") to ("features") in line 18 and insert ("if it—

1. (a) consists of a method or principle of construction, or
2. (b) includes").

The noble Lord said: Perhaps I may say a few words about this amendment, which I shall not in fact move. I should just like to explain why.

It was intended to correct a drafting defect in what would be subsection (3) of Section 1 of the Registered Designs Act. The present wording of the Bill implies that a part of a design may be registered in a way which leads to problems. In particular, it could mean that the whole of a design is tested for novelty but only part of the design is registered. The consequence could be that the novelty lies entirely in the part which is not registered. This would of course make nonsense of the novelty requirement in the Bill.

However, here I have to confess that on reflection the approach adopted in the amendment is not ideal. It would prevent the Designs Registry registering any application which includes any excluded features. It would therefore result in unnecessary complication and bureaucracy in the registration process because the registry would have to check every application for excluded features.

We will therefore be looking at this again and will come forward at Report with a new amendment. In the circumstances I do not intend to move the amendment and apologise to the Committee for putting it down.

Lord Williams of Elvel

As the debate is about the Government seeking not to move an amendment, even with the leave of the Committee, perhaps I may be permitted to make a comment. It is wholly out of order and I should not be speaking at all. Nevertheless, as the noble Lord has spoken, I make a point and it is a serious point. I will move the amendment. I beg to move Amendment No. 296A. The noble Lord has sought not to move the amendment but I propose to move the amendment and speak to it.

The Deputy Chairman of Committees (Viscount Simon)

Amendment proposed, page 107, line 15, leave out from ("registered") to ("features") in line 18 and insert the words on the Marshalled List.

Lord Williams of Elvel

I am grateful to the noble Viscount the Deputy Chairman of Committees. I just make one very simple point. In your Lordships' Committee we have had considerable debate on a great number of issues and the Government have taken many things back to look at and perhaps reformulate. They have come forward with an amendment which they now say was mistaken; that they need to consider it again and then to come forward with something else.

This is going to burden the Report stage of the Bill to an almost unacceptable extent. Already we have in almost every part and chapter of the Bill government amendments with the Government reviewing measures and reformulations. What worries me is that when your Lordships' House reaches the Report stage it will be so burdened with government amendments and government redrafting that we shall not have a chance to discuss the issues which this House really wishes to discuss. I beg leave to withdraw the amendment.

9.15 p.m.

Lord Mottistone

I do not agree at all with the noble Lord. The problem with the Bill is that it is terribly comprehensive and there are far too many people interested in it. It is not just a question of people but different factions. It is bound to be like this and I think my noble friend on the Front Bench has done a jolly good job in taking back many aspects. I do not think it is fair to criticise him. If this means that we have to spend a great deal of time on Report then so be it. I see to my pleasure that the noble Lord the Leader of the House is here and perhaps he will note that we might need many Report days.

For this sort of Bill, which is not political and which despite its best intentions the other place will not be able to handle efficiently, it is quite right that we should spend all the time that we can spare in getting this right. It is very important for industry and all other interested people. It is important that it should be right. I do not think it is fair to criticise my noble friend. I believe that he should return time and again with his own amendments even when he has not promised them. The Committee should have its own amendments and it should do a really good job on this.

Lord Williams of Elvel

Before deciding what to do with my amendment I wish to say that I did not make my intervention without regard to the fact that the Leader of the House is present. I am merely saying that in this Committee we should all bear in mind that the Report stage of the Bill will in a sense be as important and perhaps as long as the Committee stage. I bear in mind everything which the noble Lord said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mottistone moved Amendment No. 297: Page 107, line 20, leave out from ("perform") to end of line 22.

The noble Lord said: In addition to speaking to Amendment No. 297 I wish to speak to my Amendment No. 300 and also I believe that my noble friend Lord Lucas is concerned with Amendments Nos. 297A and 301, which are grouped with these amendments.

As regards my two amendments, Amendment No. 297 seeks to delete paragraph (b)(ii), which introduces a must-match exception. The Committee may remember that we talked about this when we were discussing Amendment No. 282. At that stage I endeavoured to show that the must-match exceptions amount to a pirates' charter. That is what it will be in this case and so the Bill will be the better for not having paragraph (b)(ii).

As to my Amendment No. 300, following the decision of the House of Lords in British Leyland v Armstrong & Company it is uncertain the degree to which spare parts or replacement parts can enjoy protection by intellectual property rights. This amendment is intended to clarify the situation by making it clear that it is not sufficient merely to argue that an article is a replacement part in order to avoid infringement of a registered design. I beg to move.

Lord Lucas of Chilworth

Perhaps I may give an explanation to the Committee. I do not propose to move or to speak to Amendments Nos. 297A or 301.

Lord Beaverbrook

For the convenience of the Committee I was going to speak to Amendments Nos. 297, 297A, 300 and 301, which is what I believe my noble friend Lord Mottistone has already done.

All of these amendments concern exceptions from registered design rights or indeed the lack of such exceptions. The first of these exceptions is what we have come to know as the must-match exception. This is intended to avoid monopoly effects by preventing rights from arising in circumstances where competitors have no choice but to copy. I have already spoken at some length about this in connection with Clause 192 of the Bill. The arguments are exactly the same here, so I shall not waste the Committee's time by repeating them.

However, the issue is, if anything, of more significance here. The amendment of my noble friend Lord Mottistone, Amendment No. 297, would delete the must-match exclusion from this clause. This would allow must-match designs to be registered and thus acquire a much longer and stronger protection than that given by design right. Since we do not believe that must-match designs should qualify even for design right, it follows that I cannot accept the amendment.

I agree that the exclusion of must-match designs will make our registered designs law rather less restrictive than many equivalent laws in other countries. In answer to that, I would say that we have reviewed the law from first principles and have concluded that what we are proposing is right, for the reasons I have given today and in our earlier debates. In any event, the relationship between registered design laws and spare parts in the European Community is currently being considered by the European Court, so we cannot be certain of the effect of these laws in the future. We remain of the opinion that a must-match exception is necessary, but I have already agreed to look again at the details of the must-match wording in Clause 192. That undertaking applies equally here in Clause 243.

We have gone to some lengths to get the balance right in the designs provisions of the Bill. Subject to further thoughts on the precise scope of the must-match exception, which applies both in Clause 192 and in Clause 243, we think that we have got it right. I therefore hope that my noble friend will feel able to withdraw his amendment.

Lord Monkswell

I rise again on the subject of safety of the consumer and the public at large, and I put this forward in all sincerity. Today it has come through very clearly from the Government Benches that the whole thrust of their line in this Bill is to give the opportunity for supply of spare parts from any source. It has not come through clearly from reading the Bill that that is the Government's implication, and I wonder whether it has been clear to the various bodies which should and would be interested in safety.

Along with all the other undertakings that the Government have given today and in previous days, I wonder whether they would undertake to approach those bodies which are responsible for and have an interest in safety matters—I am thinking particularly of the Health and Safety Executive and the Royal Society for the Prevention of Accidents, and there are probably a number of other organisations—with a view to getting their considered response to these aspects of the Bill. Effectively the import of this Bill is to change the marketplace from a marketplace where the main line of spare parts supply was from the manufacturers of the original equipment to one where there will be a free market, to use a hallowed phrase.

I believe that there are grave safety implications in that. I may be proved wrong, and I hope that I am, but if the Government would undertake to approach the Health and Safety Executive, in particular, to get their response to the implications of this Bill, that would ease my mind.

Lord Lucas of Chilworth

I feel obliged to intervene here because the noble Lord, Lord Monkswell, has referred to safety aspects on a number of occasions, and there are two points which I should like to make in this connection. The first is to reiterate that which my noble and learned friend Lord Hailsham had to say about the area that his legislation covers and the safety legislation which already exists.

The noble Lord, Lord Monkswell, has made one or two remarks about the component industry, and most particularly in relation to motor vehicles, and here I include tractors, diggers, lorries and motor cars. Earlier this evening he used the expression "spurious". I have to repudiate that description. I have been associated with the industry for many years, and spurious parts went out of fashion a long time ago. The noble Lord must recognise that many of the manufacturers of replacement parts under their own brand name manufacture for original equipment people.

I believe that the noble Lord is being obsessive about the safety factor. If one looks, for example, at the Motor Panel Manufacturers and Distributors Association's products—because much of the matter we are discussing surrounds motor body panels—to my knowledge there has not been one single complaint on the grounds of safety in the last 10 years.

When the office of the Monopolies and Mergers Commission considered this matter, and there was also a report from the Office of Fair Trading—I cannot remember the dates offhand, but it was quite recently—the aspect of safety which was brought up was repudiated by those bodies. I do not believe that the Government are under any obligation in this Bill to consider those aspects. I do not believe that the noble Lord opposite has made any case to suggest that the products of patent parts manufacturers, whether they be water pumps, clutches, brakes or panels, have any safety record that gives cause for concern.

Lord Monkswell

I must respond to that. The first response is unequivocally that the vast majority of parts manufacturers in this country do a magnificent job, and they produce quality components. I think here particularly of the proprietary manufacturers. I shall not list the names but we all know them. They are the people who have a proprietary product which they supply to original equipment manufacturers and also through retail outlets.

The noble Lord mentioned the association—I do not know its terminology—and I am sure that it produces good quality components. However we are not just talking about the prestigious component manufacturers which are household names in this country. We are talking about literally any engineering firm which can do a bit of metal bashing and which can produce an article that looks vaguely like the one that was fitted before.

The noble Lord shakes his head, but some of the components used in British industry, as I stressed earlier this afternoon, need highly sophisticated technology. Quite honestly, given the pressures on modern manufacturing design, that technology is sometimes right at the limit of its capacity. It needs high quality manufacturing. The design characteristics are sometimes almost indistinguishable between one part and another, but they can be significant. One of the problems with which we are faced is that the whole thrust of the debate is in terms of fast-moving motor components, but in fact in this Bill we are opening up a whole field, and it is not just clutch plates, exhausts, shock absorbers and car wings. It goes far wider than that. I honestly think that there is a case—I put it no stronger than that—for the Health and Safety Executive to be approached for its response.

9.30 p.m.

Lord Beaverbrook

The noble Lord has made his point. The whole Committee would agree that we are here to consider intellectual property. I understand what the noble Lord has to say about consumer safety. Nothing is more important than consumer safety. We already have a considerable body of legislation on consumer safety and the terms of the new Bill when it becomes an Act will in no way detract from the rigorous standards that are already embodied in our law.

I cannot go further than that. We cannot carry on and on discussing consumer safety. We have to get on with our discussions of the Bill in question. I assure the noble Lord that the Government are fully apprised of the safety aspects and do everything they can to make sure that the public are protected. The Bill seeks to protect intellectual property and I ask the Committee to carry on its discussions on that basis.

Lord Mottistone

I return to Amendment No. 297, which I moved some time ago. I am afraid that I have forgotten what my noble friend said, but I am sure that it was as helpful as it possibly could be. I shall have pleasure in reading what he had to say. When one's amendment is hijacked for another subject which is not the subject of debate I find that that is pressing the rules of the Committee a little far. I hope that the noble Lord will think carefully before he carries out another hijack, if he feels inclined to do that. I thank my noble friend for what he said. I do not believe it was very helpful but I shall read his reply with care. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mottistone moved Amendment No. 298: Page 107, leave out lines 23 to 28.

The noble Lord said: I seek here to delete subsection (4) because there is no good reason why a specialist part which has no necessary aesthetic quality should not receive protection as a registered design. It may be important to the customer that the part has a particular shape even though the shape has no special appeal to the eye. For example, over the weekend I was ordering new telephones. The telephones were primarily bought for function, but appearance did affect the purchaser. I should like to say that perhaps it affected my wife more than it did me. The question of colour was a factor though it is strictly a practical instrument.

This argument could also apply to scientific instruments. On the face of it, to those of us who are not scientists, that might seem to be a matter of no importance at all; but a scientific friend of mine tells me that it is important. He would like to consider the appearance of an instrument if he had that option. Another example is farm tractors. If a farmer has to choose between two tractors of identical performance and one happens to look nicer he might well buy the nicer looking one.

Subsection (4) operates against the philosophy of the Design Centre, to which I referred earlier in relation to another amendment, of which the leading light in my day was Lord Reilly. I would not expect him to be here now but I wish he was. Subsection (4) is impossibly subjective. It could be used to exclude from protection ideas which should not be so excluded. It is not reasonable and I hope that my noble friend will agree with the amendment. I beg to move.

Lord Morton of Shuna

I should like briefly to state my support for the noble Lord's amendment. It is very difficult to get a clear meaning from subsection (4). As to whether aesthetic considerations are taken into account to a material extent, the question of what is "a material extent" seems to me unanswerable. I suggest this is unnecessary, confusing and irrelevant and that it should be deleted.

Lord Beaverbrook

I regret that I cannot agree either with my noble friend or with the noble Lord, Lord Morton of Shuna.

The design right provisions in Clauses 192 to 242 were carefully constructed in order to ensure that functional designs get a balanced form of protection. The reason for this is that functional designs are used so widely that we must ensure that the protection given does not stifle competition. Where designs are chosen for functional reasons, for the job they do, it is important that they are not locked away for long periods. A vital part of this is to ensure that functional designs do not qualify for the longer and stronger protection given under the Registered Designs Act. This greater protection is appropriate only for articles chosen because of their aesthetic appearance, and in our view this Act was always intended to apply only to aesthetic designs of this kind. The wording of Section 1 of the 1949 Act is, however, open to a wider interpretation and it is essential that we close the back door, as it were, and prevent the designs of essentially functional articles qualifying for registration.

I hear the argument that it will be difficult to define whether certain designs have an aesthetic aspect but I do not think that this should cause a problem in practice. We shall study carefully what has been said on that small point and see whether we can tighten it up in some way. On the broader point of the amendment, our argument stands.

Lord Mottistone

I am grateful to my noble friend for agreeing to study what has been said. I hope that that may introduce a chink in the armour of the resistance he has expressed. I believe that we have a point and I hope that it will be taken up. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees

If Amendment No. 298A is agreed to, I shall not call Amendment No. 298AA.

Lord Beaverbrook moved Amendment No. 298A: Page 107, leave out lines 31 to 39 and insert ("it is the same as a design—

1. (a) registered in respect of the same or any other article in pursuance of a prior application, or
2. (b) published in the United Kingdom in respect of the same or any other article before the date of the application,

or if it differs from such a design only in immaterial details or in features which are variants commonly used in the trade.").

The noble Lord said: With the leave of the Committee, I should like to speak to Amendments Nos. 298A and 298AA. The first of these is an amendment that I have tabled in order to correct a drafting error in the Bill. It concerns what would be the new subsection (5)(a) of Section 1 of the Registered Designs Act. Under the Registered Designs Act as amended by this clause, only "new" designs may be registered. The intention was and is that "new" should mean that something is different from what is already publicly known. However, as originally drafted, previous applications for registration would have been taken into account, whether or not they had been registered. This would include applications that are withdrawn and that are not made public. The amendment therefore limits the prior applications that are relevant to those which result in a design being registered and as a result automatically laid open to inspection. Of course any design applications which are not registered but where the design is in any event published will be caught by the second limb—paragraph (b)—which in substance is unchanged from the original draft.

If I may now turn to Amendment No. 298AA, that would mean that designs would still be regarded as "new" even if they differed from what is publicly known only in respect of features which are common variants used in the trade. The trade concerned is of course that in which the design in question would be used. So for example under the Bill, a piece of furniture which differed from a known piece of furniture only in that it had legs of a kind which were widely used in the furniture trade would not be novel. This test has been in day-to-day use since the 1949 Act came into force and has worked perfectly well. It seems to me to be quite right. Why should anyone have a monopoly simply by replacing a few features of a known design with variations commonly used in the trade? The Designs Registry has acquired considerable experience in applying this test and in our view it should remain. I beg to move.

On Question, amendment agreed to.

[Amendment No. 298AA not moved.]

Clause 243, as amended, agreed to.

Clause 244 [Provisions with respect to certain designs registered before commencement]:

Lord Morton of Shuna moved Amendment No. 298AB: Page 108, line 5, leave out subsection (1).

The noble Lord said: This is a probing amendment, the purpose of which is to ask why it is thought necessary to have what is, in effect, retrospective legislation. We are here applying a time limit, which does not come into force, to a design that is registered in accordance with the law which is in force. It would therefore cut down the time allowed by the new Bill. Retrospective legislation is always questionable. The purpose of the amendment is to ask why the Government consider that this provision is appropriate rather than to have the Bill apply to designs registered after the Bill comes into effect. I beg to move.

Lord Beaverbrook

I shall speak to Amendment No. 298AB in the names of the noble Lord, Lord Williams of Elvel, and the noble Lord, Lord Morton of Shuna, and to Amendment No. 298B which stands in my name. Both amendments concern transitional provisions for the Registered Designs Act. Clause 243 would exclude from registration two categories of designs which have hitherto been registerable.

Given that certain categories of designs will in future be excluded from registration, it seems to us that it would be inappropriate to allow existing registrations of this kind to run on unchecked for up to 15 years after commencement. We must recognise that we cannot merely remove all the acquired rights of such registrations, but we feel that it is important to provide some form of transition. That is why the clause is in the Bill and why I would resist Amendment No. 298AB.

With regard to the details, our original intention was that such existing registrations would have continued to benefit from the monopoly protection provided by the registration for 10 years from commencement, subject to the earlier expiry of the 15-year term and to the design right licence provisions for the past five years of the 10-year period. In other words, these registrations would be protected in much the same way as if they were subject to the design right provisions in Part III of the Bill. However, the clause as drafted gave 10 years' protection from commencement even if the existing registration would have expired earlier. My Amendment No. 298B corrects this defect. Furthermore, the original draft did not apply the design right licence of right provisions in Clause 218 and did apply those in Clause 227—in both cases in error. The amendment also corrects these defects.

However, apart from that, Amendment No. 298B will impose the design right licence of right provisions from commencement rather than just in the second five years of the transitional period. Having reflected, we think that this is necessary to avoid giving continued monopoly protection to those existing registrations which would not in future be entitled to any protection. The licence of right provisions will give competitors immediate access, but the existing acquired rights will be recognised in that the licences will be subject to payment. I emphasise that these transitionals will only apply to existing registrations which would not be registrable in the future under this Bill. All other existing registrations will continue for the remainder of their term in the normal way.

In answer to the specific point made by the noble Lord, Lord Morton of Shuna, that this provision is a retrospective one, I say that I do not agree with that. It only affects acts done after the commencement of the new law. Admittedly, it represents a reduction in acquired rights; but this is always the case in transitional provisions of this kind. For those reasons, I would have to resist the amendment standing in the name of the noble Lord.

Lord Morton of Shuna

There is no point in dividing the House at this stage and I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.45 p.m.

Lord Beaverbrook moved Amendment No. 298B: Page 108, line 10, leave out subsections (2) to (5) and insert— ("(2) The right in the registered design expires ten years after the commencement of this Part, if it does not expire earlier in accordance with the 1949 Act. (3) After the commencement of this Part the following provisions of Part III (design right) apply to the right in the registered design as in relation to design right—

1. (a) sections 217 to 219 (availability of licences of right), and
2. (b) section 226 (application to comptroller to settle terms of licence of right);

and in section 217 as it applies by virtue of this section for the reference in subsection (1) to the last five years of the design right term there shall be substituted a reference to the whole of the period between the commencement of this Part and the expiry of the right. (4) Where a licence of right is available by virtue of this section, a person to whom a licence was granted before the commencement of this Part may apply to the comptroller for an order adjusting the terms of that licence. (5) The provisions of sections 228 to 231 (procedure and appeals) apply in relation to proceedings brought under or by virtue of this section as to proceedings under Part III.").

The noble Lord said: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Clause 244, as amended, agreed to.

Clause 245 [Authorship and first ownership of designs]:

[Amendments Nos. 298C and 299 not moved.]

Clause 245 agreed to.

Clause 246 [Right given by registration of design]:

[Amendment No. 300 not moved.]

Clause 246 agreed to.

[Amendment No. 301 not moved.]

Clause 247 [Duration of right in registered design]:

[Amendments Nos. 301A and 302 not moved.]

Clause 247 agreed to.

Clauses 248 and 249 agreed to.

Schedule 3 [Registered designs: minor and consequential amendments of 1949 Act]:

Lord Beaverbrook moved Amendment No. 302A: Page 140, line 8, after ("by") insert ("the person claiming to be").

The noble Lord said: This amendment corrects a drafting defect. As drafted the Bill states that: An application for the registration of a design in which design right subsists shall not be entertained unless made by the design right owner What this means is that if someone other than the design right owner applied for a registration the registration would be void. The result would be that the design right owner would not subsequently be able to obtain rectification of the register in his favour. This is clearly wrong and the amendment ensures that in these circumstances the registration will survive and can be claimed by the rightful owner. I beg to move.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 302B: Page 145, line 16 at end insert—

(Section 32: power of registrar to refuse to deal with certain agents

. Section 32 of the Registered Designs Act 1949 (power of registrar to refuse to deal with certain agents) is replealed.").

The noble Lord said: This amendment corrects an inconsistency in the drafting of the Bill. It will insert a new paragraph in Schedule 3 providing for the repeal of Section 32 of the Registered Designs Act. All the other repeals of provisions in the Registered Designs Act are provided for both in Schedule 3 and Schedule 7. The one exception is the repeal of Section 32, which is provided for only in Schedule 7. This amendment will achieve drafting consistency and make it easier for a person reading the Bill to establish which parts of the Registered Designs Act have been changed. I beg to move.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendments Nos. 302C to 302F:

Page 145, line 28, leave out ("this Part") and insert ("Part IV").

Page 145, line 39, leave out ("this Part") and insert ("Part IV").

Page 146, line 8, leave out ("this Part") and insert ("Part IV").

Page 146, line 21, leave out ("this Part") and insert ("Part Iv").

The noble Lord said: For the convenience of the Committee I shall move Amendments Nos. 302C, 302D, 302E and 302F en bloc. These amendments are all the same and are intended to avoid any possibility of confusion by replacing the expression "this Part" with "Part IV" throughout Schedule 3. I beg to move.

On Question, amendments agreed to.

Schedule 3, as amended, agreed to.

Schedule 4 [The Registered Designs Act 1949 as amended]:

Lord Beaverbrook moved Amendments Nos. 302G and 302H: Page 149, line 13, leave out from ("registered") to ("features") in line 15 and insert ("if it—

1. (a) consists of a method or principle of construction, or
2. (b) includes").

Page 149, leave out lines 27 to 34 and insert ("it is the same as a design—

1. (a) registered in respect of the same or any other article in pursuance of a prior application, or
2. (b) published in the United Kingdom in respect of the same or any other article before the date of the application.

or if it differs from such a design only in immaterial details or in features which are variants commonly used in the trade.").

The noble Lord said: For the convenience of the Committee I shall move Amendments Nos. 302G and 302H and speak to Amendment No. 302J. As the Committee will know, Schedule 4 to the Bill sets out the text of the Registered Designs Act following the amendments made by the Bill. These amendments simply incorporate the text of amendments which I have tabled and which the Committee has already accepted. I beg to move.

On Question, amendments agreed to.

[Amendments Nos. 302HA and 302HB not moved.]

Lord Beaverbrook moved Amendment No. 302J: Page 150, line 23, after ("by") insert ("the person claiming to be").

On Question, amendment agreed to.

Schedule 4, as amended, agreed to.

Clause 250 [Persons permitted to carry on business of a patent agent]:

Lord Morton of Shuna moved Amendment No. 302JZA: Page 111, line 4, leave out ("individual, partnership or body corporate") and insert ("registered patent agent in the United Kingdom, or solicitor holding a practising certificate in the United Kingdom, subject to any extension of such limitation as may be made by order of the Secretary of State in favour of any state which affords reciprocity of treatment").

The noble Lord said: At the request of the noble Lord, Lord Campbell of Alloway, I beg leave to move the amendment standing in his name on the Marshalled List. This amendment is supported by the Chartered Institute of Patent Agents. It is an amendment which is designed to leave out the words, individual, partnership or body corporate", who may carry on the business of acting as a patent agent. Broady speaking, the words of the amendment are that the person should be a registered patent agent or a solicitor or: subject to any extension of such limitation as may be made by order of the Secretary of State in favour of any state which affords reciprocity". The position of this Bill as this clause stands at the moment is that anybody, even somebody who has no knowledge or experience whatever, can apparently practise as a patent agent. Opening up the practice of patent agencies to anybody is, I submit, wrong for two reasons. First, it is wrong because the protection of inventions is a highly skilled and difficult operation. Also for the protection of the general public or the consumer of the patent system unqualified people should not be allowed to conduct this type of business. The Government have recognised the necessity to restrict conveyancing to qualified people and also to restrict the practice of giving financial advice.

It is difficult to understand how the liberty to give advice or to act for people in patent applications should be completely free. Also it appears unreasonable that nationals of other Community countries should be allowed to act as patent agents in the United Kingdom where reciprocal rights are not afforded to British nationals in other Community countries.

That is the basis of the amendment, and I beg to move.

The Earl of Dundee

The amendment goes to the heart of the Government's policy of opening up patent services to greater competition. In his report on patent agents published in 1986 the Director General of Fair Trading recommended the ending of the exclusive right which patent agents, together with solicitors, have to represent inventors. He concluded that the monopoly was having detrimental effects on the cost of the services of patent agents and many smaller firms and private inventors particularly were being deterred from seeking professional advice. The Government accepted the recommendation and Clause 250 is designed to allow any person, whether qualified or not, to carry on the business of acting for patent applicants.

Before taking that decision we considered carefully the arguments on both sides and the points put to us by the Chartered Institute of Patent Agents. We are aware that the drafting of patent applications is a complex business, calling for considerable skills, and that a badly drafted application can lead to the loss of valuable rights. But it is for that reason that we are anxious to improve the availability of services to small inventors who are most in need of professional advice. Increased competition should encourage less expensive, better services, and we would expect qualified patent agents to continue to play a major part in those.

It is because we recognised the need to preserve the distinct identity and international reputation of the qualified profession that we are retaining the register of patent agents and the prohibition on those not on the register from using the title "patent agent". That means that any client will know with whom he is dealing.

There has also been concern, as the noble Lord, Lord Morton, pointed out, that foreign patent agents would enter the market without reciprocal access for United Kingdom patent agents, leading to a loss of business for the UK profession. The advantages of competition can be expected to outweigh any such losses. But in practice we expect UK patent agents to be able to hold their own against such competition. That has already been seen in work on European patents, on which they are already in competition with patent attorneys from other members of the European Patents Convention and from which are estimated to come two-thirds of foreign earnings of £30 million a year.

Lord Morton of Shuna

I have listened to the reply which has been read out by the noble Earl and I must say that I found it wholly unconvincing. It seems to me that if anything needs skilled advice it is a patent application. The idea of any Tom, Dick or Harry coming in and holding himself out as someone who is able to give advice and presumably charge a fee for a patent application seems entirely daft. However, as the amendment is in the name of the noble Lord, Lord Campbell of Alloway, I shall leave it to him to read what has been said and perhaps take the opportunity to come back to the matter later if he so desires. I therefore ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 250 agreed to.

10 p.m.

Clause 251 [The register of patent agents]:

Lord Morton of Shuna moved Amendment No. 302JA: Page 111, leave out lines 28 and 29 and insert ("and such rules shall not be made unless a draft of them has been laid before Parliament and approved by resolution of each House.").

The noble Lord said: This is an oft repeated amendment which keeps coming before your Lordships' Committee. It merely suggests that the rules under this particular section relating to a register of those who act as agents for others in applying for or obtaining patents should be subject to positive approval by each House and not subject to negative resolution. I beg to move.

The Earl of Dundee

With the leave of the Committee I shall also speak to Amendments Nos. 302YA, 302EEA and 302JJA as they also concern the procedure to be followed when rules are made under the Bill.

The amendments seek to alter the provisions in the Bill for making rules concerned with the regulation and practice of patent agents and trade mark agents. They would change the rule-making procedure from negative resolution to one of affirmative resolution of each House of Parliament, as the noble Lord, Lord Morton of Shuna, has just explained.

This Bill contains a lot of provisions conferring order and rule-making powers. In most cases the negative resolution procedure is provided for. The only exceptions to this are where major issues are likely to arise. One example is Clause 217, which permits the making of an order which would exclude certain designs or designs applied to certain articles from licences of right under Part II of the Bill. The amendments that we are considering do not, however, involve rule-making of this character.

Perhaps I may refer first to Amendments Nos. 302JA and 302EEA, which concern the registers of patent agents and trade mark agents. The rules would require the keeping of the registers and contain provisions regulating the registration of persons and the suspension and erasure of registrations. The keeping of the register and other regulatory matters may be subdelegated.

Although the register of trade mark agents will be new, the register of patent agents has existed for many years and rules relating to the register are currently subject to the negative resolution procedure. It may be that some Members of the Committee are rather uneasy about the power to subdelegate to any person. In fact at present the keeping of the patent agents' register is delegated to the Chartered Institute of Patent Agents and we see no reason why that should not continue, with a similar arrangement for the register of trade mark agents, responsibility for which could be delegated to their institute, which is the Institute of Trade Mark Agents.

However, we feel it would be undesirable for the statute to identify specifically to whom the keeping of the register may be delegated as this would be too restrictive. I trust that the Committee will be content to leave it to the Secretary of State to use his powers wisely in nominating the registration authority, but in any case it its always open to either House to debate the rules once they are laid, and, if necessary, reject them.

I shall now refer briefly to Amendments Nos. 302YA and 302JJA, which apply to Clauses 254 and 260. These clauses permit the making of rules governing mixed practices involving registered patent agents and trade mark agents and others.

Mixed practices involving patent agents are not permitted at present so there are no existing equivalent rules. Even so, we do not believe that there is any reason why the negative resolution procedure should not be the one to be adopted. It is made clear in the Bill what matters the rules may deal with; they are to prescribe the conditions which must be satisfied before a mixed partnership or body corporate is entitled to use the title "patent agent" or "trade mark agent", as the case may be.

There is no need to compel the spending of valuable parliamentary time on the details of the day-to-day running of patent agents' and trade mark agents' businesses. The statutory framework laid down in these clauses gives only limited leeway within which the rules may be drafted. As I have already said, there is the possibility, if it is felt necessary, for either House of Parliament to debate the rules when they are laid. For those reasons perhaps the noble Lord will agree to withdraw the amendment.

Lord Tordoff

Perhaps I may interject a word at this stage. The assurance that these matters can be debated on either a negative or an affirmative resolution has very little meaning for Members of this Chamber. We are constantly told from the Government Front Bench that when secondary legislation is introduced it can be debated by Parliament. The truth is that with a large government majority in the other place, and with the inability of this Chamber either to amend or to vote against an instrument—whether it be affirmative or negative—those words are totally meaningless. Some of us are becoming very tired of the Government hiding behind secondary legislation in this way.

Lord Morton of Shuna

That was a very interesting and apposite comment from the noble Lord, Lord Tordoff. But this is perhaps not the time, the place or the occasion on which to have a lengthy discussion on whether we should or should not be able to amend secondary legislation.

I should apologise to the Members of the Committee for not having mentioned Amendments Nos. 302YA, 302EEA and 302JA. I accept that they were in the grouping. I apologise for not having mentioned them. On the understanding that we may return to this matter at a later stage, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 251 agreed to.

Clause 252 [Persons entitled to describe themselves as patent agents]:

Lord Tordoff moved Amendment No. 302K: Page Ill, line 33, leave out ("or "patent attorney" ").

The noble Lord said: I believe that it would be for the convenience of the Committee if with Amendment No. 302K we took Amendments Nos. 302M, 302P, 302R, 302T and 302EE. I understand from my noble friend Lord Lloyd of Kilgerran that a number of solicitors dealing with intellectual property matters have advised him that the use of the word "attorney" to describe patent agents is confusing, in particular to foreign lawyers and to industrialists. It gives the impression that chartered patents agents can deal with all questions of law whereas patent agents are limited by charter to deal with specialised aspects of patenting jurisprudence.

I have to hand a letter from a firm called Bristows, Cooke and Carpmael, who are perfectly willing that it should be quoted in the Chamber. A Mr. Simon Cooke writes: On several occasions I have had clients in my office who were annoyed because they had been led to believe that they had been advised by lawyers when in fact they had been advised by Patent Agents. The difficulty arises out of the difference in language between the United States and the United Kingdom. In the United States 'attorney' essentially means a lawyer and a qualified one at that". The amendment is therefore designed to leave out "or 'patent attorney'" to clarify this matter for those people who are confused. I beg to move.

The Earl of Dundee

With the leave of the Committee, I too shall address myself to Amendments Nos. 302M, 302P, 302R, 302T and 302EE. We do not think that these amendments are necessary and, indeed, they would not have the effect that I believe the noble Lord intends.

Clause 252 is structured in such a way that persons who are not on the register of patent agents must not use the titles "patent agent" or "patent attorney". It is deliberately not framed as a positive permission for registered persons to use those titles, and it does not therefore override any other restrictions, for example on the use of the title "attorney". In other words, if a person is not otherwise entitled to use the title "attorney", Clause 252 would not give him the right to the title "patent attorney".

Furthermore, the proposed amendments would not in any case prevent any extra categories of people from using the title "patent attorney". On the contrary, the amendments would mean that use of the title by any person, whether registered or not, would not contravene the clause. That is a subtle point I know; but I assure the Committee that it is not our intention to alter any existing rights to, or restrictions on, the use of the word "attorney".

This brings me to a point about the title "European Patent Attorney". The noble Lord appears to be seeking, by means of amendment to Clause 258, to remove the right to this title, which has belonged to those qualified to appear before the European Patent Office since it opened its doors nearly 10 years ago. The title has been in general use by members of the European patent profession for all of that time and it would, in my view, be totally wrong to change that now. The title was agreed originally in order that United Kingdom based practitioners could compete on equal terms with their Continental counterparts who are free to use the title. The same argument still holds good today. Indeed, the argument is made stronger by the reputation and good will that have been built up by the profession and which are intimately associated with the use of the title.

Lord Lloyd of Kilgerran

I am glad to agree with the Minister, in so far as he is directing his attention to Clause 258 and my Amendment No. 302EE. I do not quite understand his argument in relation to the other general amendments in my name arising out of the confusion that has been expressed by eminent patent solicitors from the use of the word "attorney" in relation to patent agents. Before I put down these amendments, I informed the president of the Chartered Institute of Patent Agents that I was doing so. When I spoke to him personally he did not raise any very serious objection, in so far as the word "attorney" should not be used other than in the term "European patent attorney". I may be wrong about all this, but that is the present position.

I wonder therefore, having regard to the further amendments put down by the Government which seem to interlace with my amendments, whether this is not a matter that the Government might reconsider.

The Deputy Chairman of Committees (Lord Renton)

Does the noble Lord wish to withdraw the amendment?

Lord Tordoff

I was hoping that the Minister would respond to my noble friend.

The Earl of Dundee

The position in relation to the noble Lord's first set of amendments is that if the reference to the patent attorney is there then Clause 252 can be contravened. If it is not there then it cannot be contravened.

Lord Tordoff

I suspect that the Minister has as clear an understanding of this matter as I have myself. We both have our advisers to whom we shall refer. Perhaps we shall return to this matter at the next stage of the Bill. It seems to me, very much as a layman on this subject, that clearly a number of people are becoming embarrassed by the fact that people from overseas, especially those from the Americas, have a totally different understanding of the meaning of these words. If that is the case perhaps we should be wise to reconsider the problem. However, if the Government are not prepared to do so perhaps we should read what has been said and come back at a later stage.

The noble and learned Lord the Lord Chancellor was raising his eyebrows once or twice during the debate, but perhaps that is a standard condition! While the noble Earl takes further instruction on this matter, before I withdraw the amendment I should perhaps ask him whether he has anything more to say.

The Earl of Dundee

I have been able to reconsider the position since the noble Lord was speaking. I should say that I always had sympathy with the noble Lord's point about the confusion which the term "attorney" gives rise to, not least in the United States and certainly in Europe. I am happy to give the matter further consideration.

Lord Tordoff

I am most grateful to the noble Earl. I think that is the most that we can possibly ask on this occasion. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.15 p.m.

The Earl of Dundee moved Amendment No. 302L: Page 111, line 34, leave out paragraph (b) and insert— ("(b) in the course of a business otherwise describe himself, or permit himself to be described, as a "patent agent" or "patent attorney".

The noble Earl said: With the leave of the Committee, I shall speak also to Amendments Nos. 302N and 302Q. Those amendments are intended to have identical effects in the three subsections of Clause 252 that deal respectively with individuals, partnerships, and bodies corporate.

Clause 252 deals with the use of the titles "patent agent" and "patent attorney". It is the Government's intention that even though practice as a patent agent will be open to all, the use of these titles will be reserved to those on the register established under Clause 251. People wishing to offer patent agency services who are not registered patent agents will need to use some other descriptive term such as "patent adviser" or "consultant".

The reason for this decision is that the profession has been regulated for many years and the term "patent agent", although in one sense purely descriptive, has come to be strongly associated with qualified practitioners. In the absence of any specific provision to protect the title, unqualified practitioners would undoubtedly use it with resulting confusion to the public.

Special provisions also need to be made for partnerships and companies practising as patent agents. Until now partnerships and companies have only been allowed to practise as patent agents if they were 100 per cent. controlled by qualified patent agents. However, under the provisions of Clause 252, mixed partnerships and companies in which not all the partners or directors are patent agents will be allowed to describe themselves as "patent agents" provided that they meet the conditions prescribed in rules made under Clause 254. In this way, firms may be formed which can offer under one roof the full range of services required by inventors.

The existing wording of subsections (1)(b), (2)(b) and (3)(b) is of somewhat broad scope. It would arguably make any unauthorised use of the reserved titles a criminal offence, for example a young man pretending to be a patent agent in order to impress a young woman at a party. That is certainly not the Government's intention. The amendments will ensure that only unauthorised use of the titles in the course of business will be prohibited.

The amendments also deal with a separate point on which the scope of the clause as drafted is not clear. It is arguable that the form of words used in each paragraph goes further than just prohibiting the unauthorised use of the title. "Holding oneself out as a patent agent" could be interpreted as including anything done which conveys to the public the fact that the person concerned offers patent drafting and other services. If the unqualified were prohibited from doing any such thing the whole philosophy of abolishing the patent agents' exclusive right of representation would then be defeated. The amendments, by removal of the words, "holds [himself] out", by specific mention of each reserved title, and by the use of quotation marks, make it clear that it is only the use of the words as such that is to be restricted. I beg to move.

Lord Lloyd of Kilgerran

I support what the Minister said in regard to the amendment when he referred to the use of the words: in the course of a business otherwise describe himself, or permit himself to be described, as a 'patent agent' ". Having regard to the discussion in respect of previous amendments tabled in my name, I do not accept that the words "patent attorney" would be suitable in circumstances except those in the European field. Therefore, as the Minister has been kind enough to say that he will reconsider the position arising from my amendment, which proposes the omission of the words "patent attorney", perhaps he would like to reconsider both these amendments in relation to those words.

I did not understand his reference to the fact that there may be some lady who may be impressed by the use of the name "patent attorney". However, if he wishes to elaborate on that useful support to his argument I will gladly give way. I agree with the amendments, but I do not agree with the inclusion of the words "patent attorney", in view of the arguments that were put to him in relation to the amendments tabled in my name.

The Earl of Dundee

I take note of what the noble Lord has said. In regard to his reference to the use of the words "patent attorney" in this context, I should like to point out that if a qualified patent agent is also practising in Europe he can describe himself as a patent attorney. The word "attorney" also gives rise to confusion and I have already indicated that I will be happy to look at that matter—

Lord Lloyd of Kilgerran

I am sorry to intervene, but the title is "European patent attorney" and not "patent attorney" per se. The term "European patent attorney" has been accepted by the solicitors but not the words "patent attorney" by themselves.

The Earl of Dundee

I take the noble Lord's point on the distinction between the words "European patent attorney" and "patent attorney" and I shall look at the matter again.

On Question, amendment agreed to.

[Amendment No. 302M not moved.]

The Earl of Dundee moved Amendment No. 302N: Page 111, line 39, leave out paragraph (b) and insert— ("(b) in the course of a business otherwise describe itself, or permit itself to be described as, a firm of "patent agents" or "patent attornies",").

On Question, amendment agreed to.

[Amendment No. 302P not moved.]

Lord Beaverbrook moved Amendment No. 302Q: Page 112, line 5, leave out paragraph (b) and insert— ("(b) in the course of a business otherwise describe itself, or permit itself to be described as, a "patent agent" or "patent attorney",").

On Question, amendment agreed to.

[Amendment No. 302R not moved.]

The Deputy Chairman (Lord Renton)

In calling Amendment No. 302S I should like to point out that if this amendment is agreed to I cannot call Amendment No. 302T.

The Earl of Dundee moved Amendment No. 302S: Page 112, line 17, leave out from ("in") to end of line 23 and insert ("the circumstances specified in section (Persons entitled to describe themselves as European patent attornies).").

The noble Earl said: With the leave of the Committee I shall speak also to Amendments Nos. 302U, 302V, 302X, 302Y, 302AA, 302BB and 302DD, as well as to the Question, That Clause 253 stand part of the Bill. The new clause to be inserted is intended to replace the existing Clause 253, and the amendments to Clauses 252, 254, 255 and 256 are merely consequential on that change.

I shall begin by saying a few words about what Clause 253 was intended to achieve and I shall then go on to discuss the proposed new clause. Practice as a European patent attorney is governed by the provisions of the European Patent Convention. This provides that only qualified persons (that is to say, persons on the so-called European list) may be heard on behalf of applicants to the European Patent Office. Nothing that is being done in this Bill in respect of United Kingdom patent agents can affect that basic provision.

At present UK law, by virtue of Section 84 of the Patents Act 1977, lays down criminal penalties for unauthorised practice as a European Patent Attorney and use of the title. These correspond to the penalties under the current law for unauthorised practice as a "patent agent" and use of the title. As I have said, the European Patent Convention prevents unqualified persons from practising as European patent attorneys. There is therefore no need to provide in UK law for such practice to be an offence and we are proposing to repeal Section 84 of the 1977 Act.

However, for the protection of the public, we thought it appropriate to restrict the use of the titles "European Patent Attorney" and "European Patent Agent" and this is what Clause 253 was designed to do. The clause sought to create new protected titles "European Patent Attorney" and "European Patent Agent", the use of which would be restricted to those qualified to act before the European Patent Office.

We now appreciate, however, that Clause 253, in its present form, is defective. Other provisions of this Bill will permit the formation of "mixed practices" of patent agents and non-patent agents and it is in relation to these that the problem arises. The problem is this. If a partnership includes one or more European Patent Attorneys as well as other partners who are not qualified as such, although the qualified person or people will be perfectly able to practise as individuals before the European Patent Office, the effect of Clause 253 would be that the partnership would not be able to describe itself as "European Patent Attorneys" or even hold itself out as able to take on European Patent work.

This would totally frustrate the objective of encouraging mixed practices. European work is of increasing importance to patent agents, and a firm would be unlikely to sacrifice the right to advertise its ability to handle this work for the sake of allowing non-patent practitioners to join it.

The approach adopted in the new clause which is to replace Clause 253 is simpler. Instead of creating a specific offence of mis-use of a reserved title, it is structured as a derogation from the prohibition in Clause 252 of unauthorised use of the terms "patent agent" and "patent attorney". The new clause provides that Clause 252 is not contravened by the use of the terms "European Patent Attorney" and "European Patent Agent" by individuals on the European list and partnerships or companies including not less than a certain number or proportion of partners or directors on the European list. The number or proportion is to be prescribed in rules made under Clause 254.

Lord Lloyd of Kilgerran

I understand the Minister is saying that after further consideration the Government have considered that Clause 253 of this Bill titled, Persons entitled to describe themselves as European patent attornies", is defective and therefore they have produced Amendment No. 302U to replace Clause 253. I understand that quite clearly and I am instructed by patent solicitors that they agreed some years ago that the phrase "European Patent Attorney" would not be objected to. However, if I may presume to refer again to Clause 252, it is headed: Persons entitled to describe themselves as patent agents". Therefore, what I say—and I hope I do not repeat myself—is that the only use of the word "attorney" should be in relation to the words "European Patent Attorney" under the new Clause 253. Otherwise, I accept the new Clause 253 in Amendment No. 302U.

I did not quite understand, and it is entirely my fault, what the Minister said when he referred to the fact that a certain section of the Patents Act 1977 was somehow going to be eliminated. Will he be good enough to let me know the number of that section, because I missed it? Was he referring to Section 123? What was the section of the Patents Act 1977 that he had eliminated? I was not aware of it and it is entirely my fault.

The Earl of Dundee

I think I can help the noble Lord by referring him to Section 84 of the 1977 Act, which it is our intention to repeal.

Lord Lloyd of Kilgerran

I am very much obliged. Thank you very much.

On Question, amendment agreed to.

[Amendment No. 302T not moved.]

Clause 252, as amended, agreed to.

10.30 p.m.

The Earl of Dundee moved Amendment No. 302U: After Clause 252, insert the following new clause:

("Persons entitled to describe themselves as European patent attornies, &c.

.—(1) The term "European patent attorney" or "European patent agent" may be used in the following cases without any contravention of section 252.

(2) An individual who is on the European list may—

1. (a) carry on a business under a name or other description which contains the words "European patent attorney" or "European patent agent"; or
2. (b) in the course of a business otherwise describe himself, or permit himself to be described, as a "European patent attorney" or "European patent agent".

(3) A partnership of which not less than the prescribed number or proportion of partners is on the European list may—

1. (a) carry on a business under a name or other description which contains the words "European patent attornies" or "European patent agents"; or
2. (b) in the course of a business otherwise describe itself, or permit itself to be described, as a firm which carries on the business of a "European patent attorney" or "European patent agent".

(4) A body corporate of which not less than the prescribed number or proportion of directors is on the European list may—

1. (a) carry on a business under a name or other description which contains the words "European patent attorney" or "European patent agent"; or
2. (b) in the course of a business otherwise describe itself, or permit itself to be described, as a company which carries on the business of a "European patent attorney" or "European patent agent".").

On Question, amendment agreed to.

Clause 253 negatived.

Clause 254 [Power to prescribe conditions, &c. for mixed partnerships and bodies corporate]:

The Earl of Dundeemoved Amendment No. 302V: Page 113, line 12, leave out ("or 253") and insert ("(persons entitled to describe themselves as patent agents)").

The noble Earl said: I have already spoken to this amendment and I beg to move.

On Question, amendment agreed to.

The Earl of Dundee moved Amendments Nos. 302W, 302X and 302Y:

Page 113, line 18, leave out ("impose") and insert ("prescribe").

Page 113, line 31, at end insert— ("(3A) The Secretary of State may make rules prescribing for the purposes of section (Persons entitled to describe themselves as European patent attornies) the number or proportion of partners of a partnership or directors of a body corporate who must be qualified persons in order for the partnership or body to take advantage of that section.").

Page 113, line 32, leave out from first ("person") to end of line 33 and insert—

1. ("(a) in subsections (1) and (2), means a person who is a registered patent agent, and
2. (b) in subsection (3A), means a person who is on the European list.").

On Question, amendments agreed to.

[Amendment No. 302YA not moved.]

Clause 254, as amended, agreed to.

Clause 255 [Privilege for communications with patent agents]:

The Earl of Dundee moved Amendment No. 302Z: Page 113, line 37, leave out ("to which this section applies") and insert ("with respect to any matter relating to the protection of inventions, designs or technical information, or the protection of trade marks or service marks,").

The noble Earl said: With the leave of the Committee, I should like to speak to Amendments Nos. 302Z and 302CC together. As will be apparent, they are very much interconnected.

Clause 255 relates to privilege for communications with registered patent agents. It extends the privilege, which presently covers patent proceedings only, to other matters in which patent agents have expertise. These matters are currently listed in subsection (3) of the clause.

There is, however, a lacuna in the list of topics covered. This can best be explained by an example. Suppose a client goes to a patent agent. He may think he has made an invention, but the important thing is that he has technical information which he wishes to protect. The agent may quite legitimately advise that applying for a patent is not the best way of protecting the client's interests and that he should rely rather on the law of confidentiality—in other words "trade secrets" or "know-how".

Depending on the circumstances, such advice may not be included in the scope of the existing wording of Clause 255(3), which would lead to the result that it would not be clear in advance what communications were going to be privileged. That may well be unavoidable in some situations where the initial problem on which advice is sought is on the edge of the patent agent's field of expertise, but it is obviously undesirable in the context of something so fundamental to a patent agent's work as the protection of an invention. The amendment therefore substitutes for patents in the list of topics covered by privilege the protection of inventions and it adds technical information. The latter has been introduced to make sure that information which falls short of the standard of inventiveness necessary to support a patent application is still included. This is important because a client may well not appreciate that commercially valuable technical information does not amount to an invention until he has consulted a patent agent.

The moving of the list of topics covered from subsection (3) to subsection (1) and other changes to the wording used is primarily to improve the presentation of the clause and is not intended to have any effect on the scope.

One obvious change is that the word "copyright" no longer appears in the list. I should like to emphasise, however, that this does not mean that we have changed our minds about the degree to which patent agents are qualified to advise on copyright matters. Patent agents must have a considerable depth of knowledge about certain aspects of the subject, primarily arising from their work in advising on the protection of inventions, designs and trade and service marks.

One clear example would be that of a client trying to defend his interests against a competitor who is passing off his goods as those of the client. It would be essential for the advice given to cover all the possible courses of action. This may well include action for breach of copyright in packaging or labels as well as straightforward trade mark, design or patent infringement. Another example would be in the interaction between copyright, designs and patent laws as they relate to functional and aesthetic articles. Significant changes are being made to this area in this very Bill.

So we clearly accept that patent agents can and do give competent advice on certain aspects of copyright. However, the wording adopted no longer makes it necessary for copyright to be specifically mentioned. The examples I have just mentioned would all fall within the definition of, any matter relating to the protection of inventions, designs, technical information and trade or service marks". Questions of pure copyright would not, of course, be covered but such matters are generally acknowledged as falling outside the normal range of expertise of patent agents. I beg to move.

Lord Lloyd of Kilgerran

I welcome any attempt that has been made to grant privilege to the patent agents who have to deal with intellectual property matters wider than pure patents.

Amendment No. 302Z, in addition to technical innovation, designs and protection of inventions, deals specifically with the protection of trade marks. The Minister did not emphasise that trade marks were included. In fact when he was referring to this amendment he left out the words "trade marks", although later he did bring in those words.

In view of the desire of the Government to introduce an amendment involving trade marks, with the leave of the Committee I must presume to refer to my proposed amendment in the Title of the Bill, No. 317, and also perhaps refer to Amendment No. 315A. Trade marks are referred to in a number of clauses of this Bill. Clause 259 refers to trade marks; Clause 260 refers to trade marks and the trade marks register. Clause 264 and also Clause 270(4) refer to intellectual property, which includes trade marks.

I have to declare an interest at this stage. I am an honorary associate of the Institute of Trade Mark Agents. Therefore I feel that the Title of the Bill should include the words "trade marks". So often trade marks are overlooked, even by great industrialists in this country, and are wrongly equated with patents. I am glad to see the noble Lord, Lord Williams of Elvel, nodding his head in support. At this stage I should just like to bring to the notice of the Committee the fact that I have asked for a modification of the Title of this Bill to include the words "trade marks".

I shall not waste the time of the Committee on Amendment No. 315A, because that is an attempt to get rid of a provision of the Trade Marks Act of 1938, Section 28(6), which deals with the trafficking in trade marks. I am sure that the noble and learned Lord the Lord Chancellor will forgive me if I quote the words of the noble and learned Lord, Lord Bridges, in a recent case reported in 1984, Volume 1, All England Law Reports, page 428, which is the case of Holly Hobbie. In America character merchandising is well known and successful, but a great deal of the 1938 Act was drafted by a late uncle of my wife, Mr. Cox, and he told me about introducing this cautious Section 28(6) to avoid trafficking in trade marks.

The noble and learned Lord, Lord Bridges, said about this section: This section has become a complete anachronism, and the sooner it is repealed the better". In view of those recent words of the noble and learned Lord, I felt that I ought to include such an amendment in this Bill. I realise that there has been correspondence about this matter with the Secretary of State for Trade and Industry and he takes the view that it is not appropriate to make this kind of amendment in the Bill because of the wider implication perhaps of trade marks which might arise. But I felt it my duty, as the noble and learned Lord, Lord Bridges, says that this is now a complete anachronism and the sooner it is repealed the better, to bring the amendment forward.

Character merchandising is an important matter for competition in this country. It is very successful in the United States, and by leaving this subsection of Section 28 of the Trade Marks Act in we are just giving rise to more litigation without helping competition, as this Government wish.

The Earl of Dundee

I am grateful to the noble Lord. If he will allow us to do so, I think perhaps the best thing to do is to consider Amendments Nos. 315A and 317 in Schedule 7 and the Title when we get there in a moment or two.

On Question, amendment agreed to.

The Earl of Dundee moved Amendments Nos. 302AA, 302BB and 302CC:

Page 113, line 40, at end insert ("or as a firm carrying on the business of a European patent attorney").

Page 113, line 42, at end insert ("as a company carrying on the business of a").

Page 114, line 6, leave out subsection (3).

The noble Earl said: I beg to move Amendments Nos. 302AA, 302BB and 302CC en bloc.

On Question, amendments agreed to.

Clause 255, as amended, agreed to.

Clause 256 [Power of comptroller to refuse to deal with certain agents]:

The Earl of Dundee moved Amendment No. 302DD: Page 114, line 21, leave out ("or 253").

On Question, amendment agreed to.

Clause 256, as amended, agreed to.

Clause 257 agreed to.

Clause 258 [Effect of enactments relating to preparation of documents, &c.]:

[Amendment No. 302EE not moved.]

Clause 258 agreed to.

Clause 259 [The register of trade mark agents]:

[Amendment No. 302EEA not moved.]

Clause 259 agreed to.

Clause 260 [Unregistered persons not to be described as registered trade mark agents]:

The Earl of Dundee moved Amendment No. 302FF: Page 116, line 13, after ("(b)") insert ("in the course of a business").

The noble Earl said: With the leave of the Committee I should like to address Amendments Nos. 302FF, 302GG and 302HH. Clause 260 creates offences of falsely claiming to be a registered trade mark agent and the three amendments in question relate to the three subsections dealing respectively with individuals, partnerships and bodies corporate.

Paragraphs (a) of each of subsections (1), (2) and (3) relate to the use of the actual words "registered trade mark agent" in the carrying on of a business. Paragraph (b) of each of the subsections relates to any other form of description which is suggestive of being a registered trade mark agent. In these cases, however, there is no limitation to use in the course of business. We now recognise that this is too broad. For example, and as I explained a moment ago in the context of the previous amendment, it would catch a totally inconsequential remark made by a person in a social context. These amendments are equivalent to those which the Committee earlier agreed to make to Clause 252 in respect of patent agents.

The amendments proposed will make each paragraph (b) consistent with paragraph (a) by limiting the scope of the offence to descriptions made in the course of business. I beg to move.

10.45 p.m.

Lord Lloyd of Kilgerran

The only matter I have been asked to raise is the position of an individual trade mark agent. Sometimes an individual acts as a trade mark agent. Would that be considered to be an operation in the course of a business? I wanted to raise that matter in order to get it clarified. I refer to the position of an individual acting as a trade mark agent.

The Earl of Dundee

Yes, the noble Lord is correct.

Lord Lloyd of Kilgerran

Thank you.

On Question, amendment agreed to.

The Earl of Dundee moved Amendments Nos. 302GG and 302HH:

Page 116, line 18, after ("(b)") insert ("in the course of a business").

Page 116, line 27, after ("(b)") insert ("in the course of a business").

On Question, amendments agreed to.

The Earl of Dundee moved Amendment No. 302JJ: Page 116, line 36, leave out ("impose requirements") and insert ("prescribe conditions").

On Question, amendment agreed to.

[Amendment No. 302 JJA not moved.]

Clause 260, as amended, agreed to.

Clause 261 agreed to.

Clause 262 [Offences committed by partnerships and bodies corporate]:

Lord Williams of Elvel moved Amendment No. 302JJ B: Page 117, line 36, leave out (", secretary or other similar officer") and insert ("or secretary").

The noble Lord said: In moving this amendment, with the leave of the Committee, I shall also speak to Amendments Nos. 302JJC and 312F.

Lord Mottistone

I am proposing to take Amendments Nos. 312A to 312N together but quite separately. Therefore, let us forget Amendment No. 312F in this category.

Lord Williams of Elvel

I shall happily forget Amendment No. 312F.

We are dealing here with offences committed by a body corporate. I have problems with the wording of subsection (5). The amendments address themselves to this problem. The first amendment seeks to delete "other similar officer" of the body. I have no idea what that could possibly mean. I can understand what a director of a company is. I can understand what a secretary of a company is. Those are formal positions. However, I do not know what "other similar officer" means. If the noble Earl can give me a satisfactory reply, I shall be happy to withdraw the amendment. I do not understand what it means. Does it mean a finance manager or a bottle washer? What is a similar officer?

Amendment No. 302JJC is somewhat more important. It is more substantial. It seeks to delete the expression, or any person purporting to act in such a capacity". I do not know how a person can purport to act in the capacity of a director or secretary if he is not a director or secretary. I do not see why a body corporate should be guilty of an offence if the person purporting to act, quite falsely presumably because that is the meaning of the word purporting, commits an offence. I do not think that the wording of the clause is quite as the Government would wish. I beg to move.

Lord Mottistone

I have been persuaded to speak to Amendment No. 312F at this stage. I do not have much to say about the amendment. It is designed to avoid a loophole by means of which a defendant may seek to evade liability on the grounds that he is a manager and not a director. This would bring subsection (4) into line with similar provisions in existing statutes—for example, Section 20(1) of the Trade Descriptions Act.

The Earl of Dundee

I am grateful to my noble friend Lord Mottistone and to the noble Lord, Lord Williams of Elvel. The amendments deserve an explanation. With the leave of the Committee I shall speak to Amendments Nos. 302JJB, 302JJC and 312F together, as they all relate to virtually identical provisions to be found in Clauses 262 and 272.

The effect of these provisions is that, where a body corporate has committed an offence, certain individuals connected with the body who have consented to, or connived at, the offence are also guilty of it. Equivalent provisions occur in numerous statutes and serve a useful purpose in discouraging those running companies from procuring them to commit certain criminal offences. However, such provisions usually provide for the liability of "any director, manager, secretary or other similar officer", while the provisions in the Bill omit any specific reference to "managers".

The term "manager" is a relic from earlier years when the organisational structure of companies tended to be different from what it is today. It was once common for the board of directors of a company to delegate the running of the business of the company to a "manager", who would not himself have a seat on the board. However, in most modern companies the person or persons responsible for running the business of the company are likely to have been appointed to the board of directors. As a result, in most cases a person who falls within the term "manager" will anyway fall within a provision of the type under discussion by virtue of being a director.

It was, therefore, our initial view that the term "manager" should be omitted from the provisions in the Bill on the ground that it was otiose. However, on reflection, we feel that in the unusual situation where a company has an old-style manager who has not been appointed to the board it is appropriate that he should fall within the ambit of these provisions. We will therefore be making the appropriate amendments to Clause 262 and to Clauses 101, 182 and paragraph 23 of Schedule 3, which contain equivalent provisions. My noble friend Lord Cullen of Ashbourne has already tabled the necessary amendment to Clause 272 and I hope that when we arrive at Amendment No. 312F he will move it so that we can accept it.

I should now like to turn specifically to the amendments tabled by the noble Lords, Lord Williams of Elvel and Lord Morton of Shuna. Amendment No. 302JJB would have the effect of deleting the words "or other similar officer" from Clause 262(5). In the case of a company incorporated under the Companies Act, we do not think that the amendment would have any effect. The Companies Act 1985 provides that every company must have at least one director and a secretary and that the term "director" includes, any person occupying the position of director by whatever name called". Thus, those responsible for running such a company will almost inevitably be covered by the terms "director" or "secretary". Bearing in mind the principle that a provision in a statute which imposes a penalty must be construed strictly, it is unlikely that anyone would fall within the words "or other similar officer".

However, Clause 262(5) covers not only companies incorporated under the Companies Acts but "bodies corporate" in general. This term covers a wide range of bodies, including statutory corporations, companies incorporated by charter and industrial and provident societies. Such bodies may be run by persons with titles other than "director" or "secretary" and the words "or other similar officer" are intended to ensure that they fall within the provisions of Clause 262.

Amendment No. 302JJC would delete from subsection (5) the words, or a person purporting to act in any such capacity". This is standard wording for provisions of the type under discussion, and we believe that it was originally drafted in response to a case in which a defendant, who had been acting as a director, had escaped liability by establishing that his appointment as such was invalid. We think that it is right that such a person should fall within the ambit of Clause 262.

Lord Williams of Elvel

I am most grateful to the noble Earl for his response. I think I start to understand why "or other similar officer" is included in the clause. It is clear that there are bodies corporate that are not incorporated under the Companies Act. As the noble Earl said, although this would have limited effect under the Companies Act, it may be that friendly societies or provident societies have officers who are similar to director or secretary.

However, I find the wording a little odd. It took the Minister's response to convince me, as a layman, that there is some sense in it. I am always troubled when, as a layman, I cannot immediately understand the wording of a Bill. But, nevertheless, I accept what the noble Earl has said, and it is now on the record.

I am more worried about the problem of, a person purporting to act in any such capacity". I am sure that the noble Earl will understand that a body corporate, however incorporated, should not be responsible for offences committed by someone who, for no reason, pretends to be a director, secretary or a senior officer. For instance, if the noble Earl were to pretend, or purport, to be a director of XYZ plc—I am sure everyone would take his assertion on his own word—and he were to commit an offence under this clause, it appears from a layman's reading of the clause that the body corporate would be caught as well as the noble Earl. I find that rather extraordinary.

I understand what the noble Earl is saying. The wording occurs in other statutes. It is accepted, and it is designed to catch people who are, or might be, directors who seek to avoid being convicted by resigning or in some way vacating their office. Nevertheless, I still have a problem with the wording which I hope the noble Earl understands.

The Earl of Dundee

I should be the first to admit that at first sight the phrase that we are discussing appears rather woolly. But, as I say, there is the precedent of liability having been escaped. If we do not use this wording there is a loophole. Clause 262(5) does not impose liability upon a corporation; it merely provides that if a corporation is in any way guilty of an offence then certain of its officers will also he guilty.

Lord Williams of Elvel

Or people purporting to be officers. But I do not think there is much merit in pursuing this discussion at this point in time. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 302JJC not moved.]

Clause 262 agreed to.

Clause 263 agreed to.

11 p.m.

Clause 264 [Patents county courts to exercise special jurisdiction]:

Lord Lloyd of Kilgerran moved Amendment No. 302KK: Page 119, line 16, leave out from ("designs") to ("and") in line 18.

The noble Lord said: In moving this amendment I should like to make a few introductory remarks to the effect that we are now entering on to Part VI of the Bill. This section is headed "Patents" and "Patents county court". To me this is a very important section indeed because it is making an attempt to cheapen litigation. A matter with which I have been personally concerned for many, many years is how one can cheapen litigation so that smaller firms in particular can have justice in relation to their intellectual property.

My welcome for this part of the Bill is supported by the patent solicitors, for instance, who have told me that they would welcome my support for the Government's proposals in paragraphs 264 and 265: as they are seen as a means of cheapening patent litigation for the smaller dispute while retaining the jurisdiction within the Civil Courts system". But that support is qualified as regards Clause 264 by my amendment.

This clause deals with patents courts. It is entitled in the margin, Patents county courts to exercise special jurisdiction", and the new section is entitled, Proceedings as to patents, designs &c. New Section 31A(2)(a) states that a patents court: (a) shall exercise such jurisdiction (its 'special jurisdiction') as to such proceedings relating to patents and designs". Why does it not stop there? Why should it include: or other intellectual property and related matters as may be prescribed in the order"?

I have in my hand a letter which was written to me when I was at a trade mark conference in Budapest by Mr. Richard Price of Woodham Smith, solicitors. He says: I am surprised that the special jurisdiction of the patents county court is planned to be so wide. The provision was meant to reduce the costs and delay of patent litigation. The jurisdiction should therefore be so limited with the words 'or other intellectual property and related matters as may be prescribed in the order'".

Therefore I beg to move that there should be deleted from Clause 264 the proposal that a new section should be inserted after Section 31 of the County Courts Act 1984, Section 31A(2)(a). This would delete and limit the scope of the patents county court proposed by the elimination of the words, or other intellectual property and related matters as may be prescribed in the order". In other words I move that the jurisdiction of a patents county court should be limited to proceedings related to patents and designs and not to other intellectual property. I beg to move.

The Lord Chancellor

I am very grateful to the noble Lord for welcoming these clauses, which are designed to render certain litigation less expensive. I am glad to know that after such a long time devoted to that object he is now able to join with us in supporting our proposals in general terms.

As regards the particular point that he has raised, I should point out that to delete all that he seeks to delete would have the effect that the patents county court would have jurisdiction in proceedings relating to patents and designs. It is necessary to specify which proceedings relating to patents and designs the court shall have jurisdiction in. The idea is that they should be towards the lower end of that litigation. So the last part of this provision is necessary in any event.

The noble Lord's amendment probably deletes more perhaps than he originally intended, because the word "such" in front of "proceedings" has to have some other words to qualify it; otherwise the provision does not make sense. But the proposal that the Government have in mind is on the lines of the report which has been produced by the Permanent Secretary in the Lord Chancellor's Department and his colleagues.

Members of the Committee will recollect, I hope, that the view the majority of that committee took was that this court should be able to deal with the Patents Act's actions including the Community Patent Convention and the Registered Designs Act and that it should also be able to deal with cases concerning the unregistered design right proposed in the White Paper. These are all connected because they have an engineering element in common and common to patents and designs.

The words used in the provision are: patents and designs or other intellectual property". So I think the generality of the word "other" would be controlled by the phrase "patents and designs". However, in view of what the noble Lord has said and his doubt about this provision, notwithstanding his support for the general provisions, I shall certainly look at this again. But I cannot accept the amendment in full for the reason that I explained at the outset. I hope that the noble Lord in the light of that explanation may feel able to withdraw this amendment.

Lord Lloyd of Kilgerran

I am very much obliged to the noble and learned Lord for what he has said. I forgot to say in my opening remarks that the patents solicitors and my friends at the Patent Bar would like to congratulate Sir Derek Oulton personally on the great work that he has done in this matter and the secretary of that committee, who has worked so hard and who recently sent me a copy of the final report.

Having regard to what the noble and learned Lord has said, I beg leave to withdraw my amendment, but it may be necessary to raise the matter again on Report.

Amendment, by leave, withdrawn.

On Question, Whether Clause 264 shall stand part of the Bill?

Lord Morton of Shuna

On the question that this clause shall stand part of the Bill I wish to raise the matter of what is in the report of Sir Derek Oulton's committee. I do so in the way not of criticising the intention behind Clause 264 but perhaps of making some suggestions that what is mentioned in the report does not go quite far enough to be effective.

It appears that the suggestion that there should be a county court judge in charge of an innovative patent county court raises certain practical difficulties as I would not persuade anybody with experience of the Patent Bar, and fairly good experience at that, to take that office rather than either continue in practice at the Patent Bar or hope for appointment to the High Court Bench. Perhaps the answer is to use somebody who is a patent judge in the High Court and delegate him to deal with the county court as well.

It also appears that there is a difficulty if the county court procedure is to be effective—we hope it would be so—in that the right to choose should be restricted to the plaintiff. It could well be that the plaintiff was the person who had the money and would therefore wish to force the matter into the more expensive court. I suggest that there should be power in the court to decide, on the application of either the plaintiff or the defendant, as to the appropriate court.

The same considerations should apply on the question of rights of appeal. If one has a right of appeal from the county court to the High Court, the Court of Appeal and the House of Lords, one is not doing much to reduce the expense of litigation. In fact, it is possible that the expense will be increased. Those comments are made with all the diffidence that a Scot who has no experience of English procedure feels. However, having had the advantage of having seen the report prepared by the judge, Lord Jauncey, who, I am delighted to say, is to join the House as a Member of the Judicial Committee, and who will presumably be here at later stages of the Bill to add far more weighty advice on the matter, perhaps a slightly more robust view than that put forward by the report may be considered.

Lord Lloyd of Kilgerran

In view of the opening remarks of the noble Lord who has just sat down when he said that Sir Derek Oulton's report had not gone far enough, I am tempted to agree with him. As a practising member of the Patent Bar for many years, it seemed to me that one of the difficulties about costs in patent cases was that the Court of Appeal, in a difficult case, did not have a member of the Patent Bar or a person with experience in the field.

There has been much talk with predecessors of the noble and learned Lord the Lord Chancellor over a period of at least 20 years, concerning the suggestion that there should be somebody with some knowledge of patent matters called to the Court of Appeal occasionally. I have had the experience of winning a case hands down in the court of first instance with a patent judge. That judge would be dealing with experiments. He, with his scientific knowledge, would know that many of the experiments, which are very costly, should not he treated at great length.

When such a case went to the Court of Appeal subsequently, the Court of Appeal quite rightly said: "We do not know what the judge was talking about. What were the experiments?". Therefore, a great deal of time was taken in instructing the judges in the Court of Appeal on what the experiments were about. I do not want to cite the names of particular cases which I have in mind and of which I have had experience as a member of the Bar. However, if there had been a member of that court with experience of patent cases and the way in which experiments are called for on both sides, which is sometimes intended to delay matters—perhaps I exaggerate the position; some people may think that it was proper to produce the experiments—such cases would not have been as lengthy as they were. I therefore agree with the noble Lord who has just sat down that perhaps—

A noble Lord

Lord Morton of Shuna.

Lord Lloyd of Kilgerran

Thank you very much. I am fully aware of his name; surely it is sufficient for me to call him "the noble Lord who has just sat down"! I know the name of Lord Morton of Shuna very well. I am sure that he does not mind. I feel that there are certain aspects which practising members of the Bar could suggest in any subsequent consideration of how to reduce expenditures in patent cases. One would be that, if a case is to go to the Court of Appeal, somebody should be there who has some experience of patent practices.

11.15 p.m.

The Lord Chancellor

I am grateful for the constructive approach taken to these clauses by the noble Lord, Lord Morton of Shuna—I shall refer to him in that way—and the noble Lord, Lord Lloyd of Kilgerran—and I shall not refer to him in the alternative way.

I agree that the problem of making inexpensive patent litigation is a difficult one. The fact that the noble Lord, Lord Lloyd of Kilgerran, has devoted a considerable part of his experience to that problem, and to date has not been particularly successful, shows how difficult it is. However, we are very grateful for the suggestions that have been made and shall certainly look at them carefully.

It occurs to me that in order to take up the suggestion made by the noble Lord, Lord Morton of Shuna, it may be necessary to put some criteria into the Bill determining whether or not a particular type of action shall go to the county court or the High Court in order to be independent of the particular choice of the parties.

The problem of securing personnel for the court is, as he said, not altogether an easy one. I have been thinking about that with my colleagues, and considering what could be done about it. I am very grateful for what he says. I also join with him in the welcome that he has given to the noble Lord, Lord Jauncey. Whether he will be with us when we reach the next stage of this Bill I cannot be certain; but I certainly hope that by that time he will be a member of your Lordships' Chamber.

With those observations, I commend to the Committee, the clauses as presently in the Bill, but undertake to consider the constructive suggestions that have been made with a view perhaps to elaborating these clauses by the time we come to the next stage.

Clause 264 agreed to.

Clause 265 agreed to.

Clause 266 [Restriction of acts authorised by certain licences]:

Lord Lucas of Chilworth moved Amendment No. 303: Page 120, line 32, at end insert— ("( ) Pesticidal use is excepted, that is—

1. (a) use of the product in the form of any substance, preparation or organism as a pesticide within the meaning of the Food and Environment Protection Act 1985, and
2. (b) the doing of any other act mentioned in section 60(1)(a) above with a view to such use.").

The noble Lord said: I should perhaps preface my remarks in introducing this amendment by suggesting that we are entering into an area in which no discussion has previously taken place; namely, the area of the agrochemical industry. I hope that the Committee will forgive me if I take a little while, but this matter is of some considerable importance, because it impinges upon the further development of agrochemicals—in the amendment the expression "pesticide" is used, which I find difficult to accommodate. However, it is the word that is used in the Food and Environment Protection Act of 1985 and that term is perhaps better understood.

This matter affects the licences of right provisions primarily of the 1977 Act, which discriminates against research based companies. In the agrochemical industry there are but six major research based companies remaining. I say that because it is a sadness that the number of research based companies has diminished. For example, one only has to look at Fisons and Boots, who found research and development expenses in the agrochemical field so onerous that they amalgamated. In turn they were taken over and their work is now being done by Schering. The history suggests that the agrochemical industry is faced with enormous expense and only the largest of companies can sustain that kind of expenditure. We are therefore left with six research based companies in the United Kingdom.

The United Kingdom accounts for only 3 per cent. of world markets. This UK-based industry is therefore having to meet the competition of world markets. North America accounts for 30 per cent. or 40 per cent. of product and Europe 25 per cent. or 30 per cent. of product. But the UK alone accounts for only 3 per cent. of world markets.

Section 266 of the Bill now before the Committee proposes to repeal those provisions in the Patents Act 1977 that relate to the licence of right in respect of pharmaceutical patents. We shall come to that section shortly. However, the six research-based companies in the United Kingdom are anxious that any such repeal to which the Government have agreed should also include agrochemical patents. These companies made a detailed case for such repeal to the Department of Trade and Industry earlier this year. I believe that the department looked upon that case with some sympathy.

There is a pressing need for new agrochemical compounds which are environmentally more acceptable and safer to the user and the crop. It is not an exaggeration to say that environmental issues—the use of pesticides, the wellbeing of the countryside and indeed the people—are contained in these needs. These more stingent requirements have resulted in an increase in difficulty and expense of research, and a fall in the rate of discovery of such new compounds. It is estimated that only one in some 18,000 compounds reaches the marketplace. Therefore sales of that one compound have to finance all the others and the abortive studies that result.

It is estimated that the costs of developing a new compound to full approval have risen enormously in the past 15 years from about £0.75 million to £15 million. It is compulsory—and rightly so—that the new compounds undergo prolonged testing to establish safety and effectiveness before approval to sell is given; and there is no quarrel about that. But the industry has only limited scope for achieving an adequate return on the enormous research investment by means of pricing. I recognise that the farming community has an interest in this matter; but since the price of an agrochemical product is dependent on the financial return to the farmer, there is in effect a market force already apparent in the pricing of the new compound.

It is essential therefore that there should be very strong patent protection in our domestic legislation. Certainly there should be protection at least equivalent to that in continental Europe. It is essential, if the industry and its investment in research in the UK is not to become weakened, that that position is obtained.

Clause 266 authorises the Secretary of State to make an order extending the repeal of the licence of right provisions to other uses as he thinks fit. While this procedure could be applied to agrochemical uses, there is a pressing need now for repeal in this area. This need is not met by the Bill, particularly as the procedure is likely to lead to uncertainty and delay: the kind of uncertainty that we have experienced in other areas of a similar industry.

The amendment provides specifically for a repeal of licences of right in respect of agrochemical patents and would therefore remove the doubt that would obtain if the other provisions were used. It would also enable further research planning to be undertaken. I commend the amendment to the Committee. I beg to move.

Lord Beaverbrook

We have received submissions from the British Agrochemicals Association and a group of research-based agrochemical companies arguing that patents for pesticides, like pharmaceutical patents, should be removed from the scope of Schedule 1 of the 1977 Act licence of right provisions. There are however aspects of the case put to us that require further clarification. We are in touch with the British Agrochemicals Association on this but are not at present able to make a decision.

Without commitment, I am happy to agree to consider the arguments put forward by my noble friend and hope that by the next stage we shall be able to come to a conclusion.

Lord Lucas of Chilworth

I am grateful to my noble friend the Minister for what he has said and look forward to seeing what the Government are able to come up with by the time we reach the next stage. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11.30 p.m.

Lord Lucas of Chilworth moved Amendment No. 304: Page 121, line 5, leave out from ("has") to ("1987") in line 7 and insert ("on 28th October").

The noble Lord said: In moving the amendment, I speak at the same time to Amendments Nos. 305, 306, 307 and 308. Perhaps it is not necessary, but I shall nevertheless remind the Committee that exactly a year ago on 12th January 1987 we discussed in this Chamber the repeal of licences of right in the pharmaceutical industry. Because of the time, I shall not remind the Committee of the figures involved, the number of people, the value of the pharmaceutical research-based industry in this country, not only in terms of balance of payments, but in terms of employment. I think that the Committee will probably recall all of this. However, I draw the attention of the Committee to the fact that in 1977 a compromise arrangement was made with regard to licences of right. It was an unhappy situation and in the early 1980s the Government agreed that if the pharmaceutical industry could produce a satisfactory case, that not only had the cost of development of new drugs, but also the time required to bring those drugs to market been eroded from the original 20-year term of patent life, the Government would give consideration to the repeal. That was accepted in 1986. There was a proposal in 1986 in the suggested Intellectual Property Bill which never came to Parliament, that resulted in the Lord Northfield Bill of January 1987, which had the support of the government of the day. That failed.

We now have the repeal in this Bill, which I welcome. I note that the effective date of the proposals in the Bill as set out in Clause 276 is to be two months after the passing of this Bill, which may be at the end of the Session. That date is not known, but it is realistic, I believe, to suggest that it might be in September or October 1988.

Since the Government have agreed to the repeal, is it not a case of the sooner the better? It has been long promised. There has been a good deal of misunderstanding. There has been a good deal of apprehension as to when all this was going to come about. The licence of right provision applies only to patents completing 16 years before June 1994, so further delay will obviously eat into the patents affected, and the value of the repeal will itself be eroded. The only unfair aspect of the amendment which I have set down might be retrospectively to turn a past act into an act of infringement. But I am suggesting to the committee that the amendment takes care of that.

It is noteworthy that the Government's proposal itself causes some pending applications for a licence of right to lapse. This is because during the passage of the Bill there could be applications to the Patent Office for terms to be settled on all the patents which may be subject to licence of right in the future. That is up to June 1994. The Patent Office might not have processed them, but they would have been made. Section 267 4B(2) provides that paragraph 4B(2) shall nullify all pending applications on patents which have not yet passed the end of their 15th year.

In this amendment one is looking to put right the anomaly of the 1977 Act and to secure that which was proved to the satisfaction of the Government in 1985 and accepted by the Government in 1986 and which was somewhat thwarted in 1987. It would come into effect at a determined date—October 1987, the date of the introduction of this Bill—rather than leave the further undetermined date that obtains by virtue of Clause 276. At the same time it would reduce the erosion of the repeal.

This matter is of concern to some nine major research-based pharmaceutical companies in this country, all of whom have, if I may put it this way, a jewel in their crown. Some of the jewels may be large and some of the jewels may be small; but when one takes into account the fact that so much work has to be done and so many inventions and proposals fall by the wayside that these jewels are important in sustaining the further research that all these companies must undertake during future years, I believe that what I am suggesting is not totally unreasonable. It will be to the general benefit of the industry and it will also be generally to the benefit of the health of this nation. I beg to move.

Lord Kilmarnock

I am afraid that I must differ to some extent with the noble Lord, Lord Lucas of Chilworth, in respect of his amendment. The clause which we are considering is what one might call "son of Northfield". The measure proposed was moved in a Private Member's Bill by the noble Lord, Lord Northfield, but, as the noble Lord, Lord Lucas said, it fell. It was put forward in that way because the Government did not at the time have outlined any legislation on intellectual property. It has now appeared as a Government measure in this compendious Bill, with the difference that the retrospective element of the Northfield proposals has been dropped. In my submission to the Committee, that is a slight improvement. I have some queries about the clause as a whole but I believe that it has emerged in a cleaner version as written into the Bill at the moment.

As I understand the amendments proposed by the noble Lord, Lord Lucas, they reintroduce the various retrospective elements which were in the Bill of the noble Lord, Lord Northfield. Therefore they take us back from "son of Northfield" to "Northfield".

I remember that there was a long discussion about this issue late at night and that we did not reach any satisfactory conclusion on the retrospective proposals in the Northfield Bill except that there were severe defects in them. (I see that the noble Viscount, Lord Craigavon, is in his place.) It seems to me, therefore, that it would be a mistake to reintroduce them into the Bill at this stage.

I also submit to the Committee that it is contrary to our general procedures in Parliament that legislation should be made retrospective when it alters the position between two groups of private parties. I have a note that that point was recognised by the noble Lord. Lord Lucas, when he spoke on 22nd April, 1986. I think that we should move on to discussing the clause as drafted by the Government, about which some Members of the Committee may have worries. I believe that what is proposed by the noble Lord. Lord Lucas, is a step backwards.

Lord Hacking

As a participant in the Committee stage—a little earlier in the evening—on 12th January last year and as a supporter of a patents amendment Bill which was then before the House exactly a year ago, I should like to support, if I may, the amendments placed before the Committee by the noble Lord, Lord Lucas. One always hesitates over the passing of any measure in Parliament which has a retroactive effect. Therefore, it is right to look with caution at any proposal which has a retroactive effect.

In the nature of patent protection, which has gradually been increased over the years—the 1977 Act increased it from 16 years to 20 years but gave the licence of right relief—and the nature of patents of long periods of time, it is inevitable that one has to tackle the retroactive problem. Indeed, the 1977 Act, although it did not give complete retroactivity in the extension of the patent period from 16 years to 20 years, did so for all patents that had been filed after June 1967. Therefore, there was a retroactive provision in the 1977 Act.

In creating a fair balance I believe it is right—as was pointed out by the noble Lord, Lord Lucas—to take into account that this matter has been on notice for a long time and that all companies which may have been minded to take advantage of the licence of right provisions have had adequate notice that these new provisions were coming before Parliament and that they had the prospect of passing into law.

Therefore, taking into account this notice, the position of the major pharmaceutical companies and their contribution to research in the pharmaceutical industry, and taking the other matters before the Committee, I believe that these amendments are worthy of further consideration. I hope that the Government will give further consideration to them. On that basis I support the noble Lord, Lord Lucas.

Viscount Craigavon

I am grateful to the noble Lord, Lord Kilmarnock, for reminding the Committee that I made a rather long speech on 4th February last year about retrospection. I felt very strongly about it and I still do. On that basis, I oppose this amendment.

Given the time of night, I shall not weary the Committee with long philosophical arguments on that point, but I still believe that it has to be debated before we break what is a standard procedure in this place: that the laws that we pass come into effect on the Assent of the Sovereign and not—in the rather casual phrase that the noble Lord, Lord Lucas, used— the sooner the better. I found that to be an extraordinary way of expressing it.

Much of the legislation that we pass is for the benefit of the nation and is providing justice and fairer results all round. Because of that we do not say, "Well, let us have it tomorrow. Let us have it straightaway. Let us have it a month previously". We wait until the end of the Bill; until it has received the Royal Assent. I hope that the Government will pursue that line for the benefit of the department as well as parliamentary practice.

There is also a problem which the noble Lord, Lord Hacking, did not raise, although he was clutching in his hand a leaflet which many Members of the Committee will have received. It is headed House of Lords briefing. The first page clearly states the ABPI's position. It states: The relevant provisions of the Copyright, Designs and Patents Bill currently before the House deserve support". That is the Bill before the Committee and not a Bill as amended by the noble Lord, Lord Lucas. I believe, if I may say so, that the noble Lord, Lord Kilmarnock, got it slightly wrong as to what we were inheriting from the noble Lord, Lord Northfield; that he, with the assent of the ABPI changed his Bill to diminish and reduce completely the retrospective element in it. That was a Bill which we passed to another place, which had no retrospection and which, especially reading this briefing from the ABPI, I believe to be its policy. I hope that the noble Lord, Lord Lucas, can say how the companies of which he might be speaking—and I have a letter from one of them—are reconciled to the policy that he is putting forward and to what the ABPI is telling us is a reasonable position. The noble Lord, Lord Lucas, also used the phrase "the jewel in the crown". Perhaps I may refer to one company which I think might be providing some kind of impetus for these amendments, although I am not sure that that is the case. It is very much affected by the Bill as it now stands.

I should like to mention the effect on one particular company because I understand that by far the most important product to be affected is the second largest-selling drug in the world which is due to come into licence of right in March 1988. It is called Cimetidine. It is produced by an American-based firm called Smith Kline and French.

Generic companies are naturally preparing to produce this drug and have already invested significantly to enable them to do so. We are told in various persuasive handouts by the drug companies that the average life of a drug on the market before the end of the patent is between four and five years. In fact with this drug, Cimetidine, there has already been a complete patent monopoly of over 11 years. I understand that this is really the only major drug to be affected by the commencement date as at present in the Bill.

11.45 p.m.

Lord Hacking

I wonder whether the noble Viscount can assist us? What did he mean by an 11 year patent monopoly? I did not follow the noble Viscount.

Viscount Craigavon

I may not have put it technically correctly, but I refer to the completely free use of a patent. When I say "free" I mean the sole use of a patent of a product.

Lord Hacking

Under current law it is 16 years, is it not?

Viscount Craigavon

I am sorry that I have not expressed this very carefully. I am implying that if the total length is 16 years, and the research and development, by implication, took four or five years, then the drug has been on the market for the benefit of the company for 11 years. That is very different from the four to five years which we are told is an average figure.

I shall leave it at that tonight, but in relation to these amendments I very much oppose any retrospective element in this Bill. If the noble Lord, Lord Lucas, wishes to bring this proposal back on Report I shall oppose it.

Lord Williams of Elvel

I do not wish to add to what was said by the noble Lord, Lord Kilmarnock, and the noble Viscount, Lord Craigavon. We agree wholly with what they say. We dislike the idea of retrospection. We disliked it in the case of the Patents (Amendment) Bill and we said so at the time. We dislike it now. We hope very much that the Government will resist this amendment. We shall support the Government if they resist this amendment.

Lord Beaverbrook

With the leave of the Committee I shall speak to Amendments Nos. 304, 305, 306, 307 and 308. Following a decision in proceedings before your Lordships' House sitting in its judicial capacity, the Comptroller presently accepts applications to settle terms of licences of right before the relevant patents actually become open to such licences. The aim is to have the licences settled so that licensees can work inventions as soon as the patents enter their seventeenth year; that is the licence of right period.

The effect of the amendments of my noble friend Lord Lucas would be that, upon commencement, licences held by anyone who had a licence application outstanding on 28th October 1987 could be extinguished by the patent owner. The amendments would also cause applications to settle terms of licences which were outstanding at the date of commencement of Clause 267 to cease to have effect.

In both cases this would amount to deprivation of property within the meaning of the European Convention on Human Rights. I am aware that this gives a meaning to "property" rather wider than most noble Lords, or indeed, the courts of the United Kingdom, might accept, but it is consistent with the most recent decisions of the European Court of Human Rights.

My noble friend Lord Lucas of Chilworth mentioned that Clause 267 might equally result in a deprivation of property within the meaning of the European Convention because that clause might cause some premature pending applications to lapse. We acknowledge that there may be a deprivation of property here. However, the class of persons that would be affected by the provision is small and the risk of the United Kingdom being taken to the European Court is correspondingly low. In addition, we are confident that the Court would hold that the public interest should prevail in this situation, because there is very little that can be said in favour of allowing applications to settle terms long before the licence of right in question becomes effective.

I would say to the noble Lord, Lord Hacking, that we do not accept that the transitional provisions in the 1977 Act were retroactive. They extended patent term subject to licences of right for the future but had no effect on any past events. What the noble Viscount, Lord Craigavon, meant by 11 years patent monopoly was probably that it has had a product licence from the DHSS for that time and has been on the market under a patent monopoly for 11 years.

It may be regarded as unfortunate that some considerable time has passed since my noble friend Lord Lucas announced in this House in April 1986, during the passage of the Patents, Designs and Marks Bill, the Government's intention to remove pharmaceutical patents from the scope of the licence of right provisions in question. However, the parliamentary timetable is such that the wishes of some cannot always be given the priority that they desire. Thus for the reasons I have given it is not appropriate to provide an earlier operative date in relation to the patents that will be affected by the clause.

Lord Hacking

Before the noble Lord sits down I wonder whether he would reconsider the point concerning the 1977 Act. That Act precisely gave extended terms of patent for all patents that had been granted after June 1967 and at the same time gave the licence of right provision as well. It was retroactive, and that was the point I was seeking to make to the Committee.

Lord Beaverbrook

I cannot agree with the noble Lord that that was retroactive. He is entitled to his opinion and we are entitled to ours, but I feel that that aspect of the 1977 Act was not in fact retroactive.

Lord Lucas of Chilworth

I have to confess that I am not overly surprised at the responses I have heard this evening in your Lordships' Committee. I should, however, reply to some of them. I remind the Committee that this amendment is also under the name of the noble Lord. Lord Hunter of Newington, and I apologise to him for not having mentioned that at the outset.

I am surprised that the noble Lord, Lord Kilmarnock, should describe the amendment in the terms that he did. Technically it is retrospective, or retroactive, or whatever word one likes to use, but in fact the industry has been under no illusions since 1986 that these matters were going to come to pass. What one is trying to do is to set a firm date so that the difficulties that have been experienced by the industry should no longer he in doubt. because doubt has existed for very many years. That is not good for any kind of industry.

I cannot quote legislation without a lot of research, but I believe that retroactive legislation has been passed by both Houses of Parliament in recent years. This is not a new idea. The noble Lord, Lord Hacking, has made the point very eloquently.

I turn to the noble Viscount, Lord Craigavon, whose strong feelings I recall vividly. I am not surprised that he should be here, even as late as it is, again to reiterate those feelings. There is no standard procedure on retroactive or retrospective legislation. It depends on what Parliament determines, and Parliament has decided in the past, and no doubt will in the future, that certain pieces of legislation shall be effected as from a date before the point of discussion.

I found his extraction of the original ABPI brief rather odd. I do not want to comment particularly about the brief because it has in fact produced another piece of information which may or may not have reached him. It has reached some noble Lords, I know.

We are not talking about one particular drug. We are talking about Zovirax from Wellcome, Opticron from Fison, certainly Tagamet from SKF, Triludan from Dow, drugs from Pfizer, May and Baker, Bristol Myers and Astra, which has an asthmatic drug which will effectively have only two to three years real marketable life. So whether he likes my description of jewel—whether it is a big one or a little one—matters not a jot. These are all important drugs which are seriously affected by this legislation, three of them from 1988 and the asthmatic one a year earlier.

I turn now to the Minister's answer.

Viscount Craigavon

The noble Lord implied that that policy of the ABPI had changed since this blue document was issued. Can he confirm whether that is the case?

Lord Lucas of Chilworth

All I would say is that the papers I have seen suggest to me that the ABPI would give support to the amendment that I have set down.

There is just one point in the Minister's response that I want to take up. He suggests that there is a risk of challenge from the European Court in so far as the human rights convention is concerned. I recall vividly that the Government have in fact not had a happy time in the European Court over recent years. It may he that which determines their present thinking. But I do not believe from that which has been provided to me that they are well advised in this regard.

I have been provided with an opinion by an eminent QC, Mr. Robin Jacob, a man well versed in patent law and in European law, which suggests that an application, or indeed a licence, is not a property which is tradable. It cannot be assigned; certainly an application cannot be. Even if the application granted by the comptroller were to come into force, that cannot be assigned; that cannot be a property. It cannot therefore be a deprivation of some particular body under the terms of the convention.

It is nearly tomorrow. There are but few Members of the Committee here. It would be ridiculous of me to test opinion. I merely say to the Committee that I am not happy with, nor indeed am I satisfied with, the Government's response in this regard. I shall seek to discuss with them the human rights issue, which I believe is the one they are mostly afraid of. The retrospective question is a matter for Parliament. I shall ask the leave of the Committee to withdraw this series of amendments tonight and give notice that I shall most certainly return at a later and perhaps more appropriate time. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 305, 306, 307 and 308 not moved.]

12 midnight

Lord Rea moved Amendment No. 308A: Page 121, line 30, at end insert— ("(8) A declaration filed under this section shall have no effect and any declaration already filed shall cease to have effect in relation to a medicinal product which has been licensed for sale or supply in the United Kingdom under section 7 of the Medicines Act 1968 for a period of ten years or more.").

The noble Lord said: I apologise for tabling this amendment so late in the passage of the Bill through the Committee. I do not apologise that I have to move it so late in the day—or so early in the morning as I should say. I can only regret it. It was only after discussions with members of the pharmaceutical industry during the recess that I realised that action along the lines of this amendment could be useful. It might, I felt, possibly be acceptable both to the industry and to the Government. The Government in this case represent the taxpayer and in their hands lies the future and safety of the National Health Service.

My personal position is that Clause 266 should be dropped and I intend to support my noble friend Lord Williams on this matter. However, in the unlikely event that my noble friend is unable to convince the Committee that the clause should not stand part of the Bill, I feel that this amendment would improve the clause and meet some of the points made by the pharmaceutical industry in persuading the Government to abolish licences of right.

Their argument—and I précis it and may therefore miss some of the points—is that new drugs take a long time to develop up to the point of marketing after the patent has been filed. Some may take up to 12 or more years. In that case there are only four years of protected market life before licences of right become available under the present system. At that point other firms can breach the monopoly and sell at a lower price.

However true that may be, there are other drugs that get on to the market remarkably quickly after the patent has been filed. An example is Ranitidine, which is better known as Zantac, one of the H2 receptor antagonists. It is very useful in the treatment of peptic ulcers. This received a licence only four years after it had been patented. Therefore it will have 12 years' protection before licences of right become available.

This amendment is intended to introduce some fairness into a situation which is manifestly unfair at present, particularly as short patent licence periods or patent marketing periods are easier for pharmaceutical firms to achieve with the "me too" or derivative drugs, where the basic research has been done by another firm, or, as is equally likely, by a university department of clinical pharmacology. A10 year period of patent protection guaranteed to all products would be both logical and fair. I am sure the Minister will be familiar with this approach. It has been debated before when a similar amendment to the Bill of the noble Lord, Lord Northfield, was put down by my noble friend Lord Stallard.

It has been calculated that this amendment might save the National Health Service some £24 million per annum between 1993 and 1997. That is out of the £40 million to £50 million per annum which inclusion of this clause will cost the National Health Service. The noble Lord will probably dispute my figures, but I can show him my calculations in writing. I do not wish to press the amendment, but I shall be interested to hear the Minister's response.

Lord Kilmarnock

The intention of the amendment, with which I have some sympathy, seems to be to preserve licences of right in respect of branded products with an uninterrupted market monopoly of 10 years. The noble Lord, Lord Rea, gave the instance of the case of Zantac. He has also given some figures of potential savings for the National Health Service. Noble Lords who are interested in the NHS will attach importance to that.

There is another side to the question. The noble Lord referred to guaranteeing the patent right of exploitation for 10 years after licence to all products. That could have a different effect in the case of a drug with a long period of development. He said that there was a period of four years before Zantac came on to the market. The industry states that many drugs now have a development period of 12 or 13 years before coming on to the market. If one were to apply the principle across the board, one might well come to the position in which patents were extended beyond a 20-year period, possibly to 22 or 23 years. I want to be clear in my own mind that the noble Lord is aware of that implication in the amendment. If he is, then this is probably quite a sensible way to go.

If there was a period of 10 years guaranteed protection in all cases from the moment of licensing, some of the concerns of the industry would be taken care of. I am looking at the noble Lord, Lord Lucas of Chilworth, to impress upon him that I am not an enemy of the industry. The vital point is that, when the patent protection period comes to an end, the end is final and the generic process can take place from that point. If that is the intention of the amendment, I have some sympathy for it.

Lord Beaverbrook

The Government's intention behind removing pharmaceutical patents from the scope of the Schedule 1 licence of right provisions of the Patents Act 1977 was to compensate the owners of these patents for significant delays in obtaining marketing approval for pharmaceuticals. These days, on average, approximately 11 years of a pharmaceutical's patent term will have expired before the pharmaceutical can be marketed.

The amendment would allow licences of right to be had on patents for pharmaceuticals that had been licensed for sale or supply in the United Kingdom for 10 years or more. That is for pharmaceuticals that had been granted marketing approval quicker than the average.

We have not had time to consider the implications of this amendment. However, in view of the Government's original intention, we shall consider whether licences of right should continue to he available on patents for pharmaceuticals that have taken significantly less time than the average to get marketing approval. Perhaps the noble Lord, Lord Rea, will withdraw his amendment in order that we may consider the matter further. We accept that the noble Lord's amendment would result in a saving to the NHS, but we cannot agree his figure. Our estimates put the figure at approximately £2.5 million.

Lord Rea

I could bandy words about the sum involved, but this is not the right place to do so. I am encouraged by the noble Lord's words, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 266 shall stand part of the Bill?

Lord Williams of Elvel

We have all had a sense of déjà vu about this debate as most of us who are in the Chamber participated in the debates on the Patents (Amendment) Bill last year. The speech that I was expecting to make opposing Clause 266 stand part, has been considerably modified by the Minister's response to the amendment moved by my noble friend Lord Rea. It was a response that I did not expect and, like my noble friend, I am encouraged. There may be some grounds for hoping that a common position, or at least a position that is acceptable to all sides of this Committee (other than certain interested parties) may emerge.

We should still like to see Clause 266 removed from the Bill. It is, of course, late at night and we are late into the Committee stage of the Bill, so I do not intend to press this to a Division. Nevertheless, we have strong objections to Clause 266.

We fully accept the importance of research and development to pharmaceutical companies, but, with the current state of National Health Service funding and the controversy that that is arousing even now and will continue to arouse, we cannot accept that extra burdens should be placed on the NHS without proper compensation, which is what this clause would achieve. We can bandy figures around. Last year we bandied figures around about how much it would cost the NHS between 1993 and 1997 if the Patents (Amendment) Bill were passed into legislation by both Chambers. We could bandy figures around as to what the figures would be if this clause were put into effect. Our belief is that the figure is probably somewhat higher than the Government's estimate in the financial section of the Explanatory Memorandum. Nevertheless, I agree that it is extremely difficult to arrive at a consensus of what that figure might be. It is difficult, but it is necessary, because we must ensure that the National Health Service is not burdened to the point where cuts in services result from this provision without any compensating benefit. I said that we accept the importance of R & D to the British economy and to the pharmaceutical industry. No one can deny that. Therefore, I propose to put forward to the Committee ideas that may go some way towards mitigating out hostility to Clause 266.

If some way were to be found to ensure that the extra revenues accruing to those companies (whose plight the noble Lord, Lord Lucas of Chilworth, has eloquently explained to us) were applied to research and development; and if some way were found to ensure that the prices charged to the NHS, perhaps through the PPRS or whatever, as a result of the abolition of licences of right, would not increase, we might be able to get back onto some common ground. If the amendment moved by my noble friend Lord Rea were accepted as it stands by the Government, again we might be on some common ground.

I hope very much that the Government have looked at the Canadian situation, the famous Bill entitled C.22, which is causing something of a constitutional row in Canada at the moment because the Senate has insisted on certain amendments which the Lower House has not accepted. But in that Bill it is proposed to abolish licences of right. I hope the Canadians will excuse me, but Canada has been something of a rogue elephant in this context. But to insist that a certain proportion of the proceeds should go to research, and indeed that there should certainly he a price control over the companies which benefit from the abolition of licences of right, is along the lines of what we should like to see.

We should furthermore like to see some protection for generic producers, which, when they have the ability to produce, can be allowed to do so properly and in proper and fair competition with the pharmaceutical companies which have the patented products. I shall not take up any more of the Committee's time because I think I have said enough to explain exactly what our attitude is. It is not one of a wholly closed mind. We recognise that there is a problem. However, as it stands Clause 266 is unacceptable, but I am encouraged by the response which the Minister gave to my noble friend Lord Rea.

12.15 a.m.

Lord Kilmarnock

I just wanted to say why I had added my name to the list of noble Lords who are opposing this clause. I think I should describe my opposition as being of a probing nature. The last time round the course the main question was the cost to the National Health Service and I think that was not properly resolved at the time. The figure which comes to my mind, and the noble Lord, Lord Beaverbrook, will correct me if I am wrong, is that the Government forecast a cost of between £5 and £8 million over 10 years. That was the sort of figure which they were mooting. I think that is obviously not realistic. The simple instance which the noble Lord, Lord Rea, gave as the cost of Zantac would be way above that figure.

If there is a policy decision to support the industry at the expense of the National Health Service, that is a political decision which the Government may have taken. As they are in government, they have the right to make that decision. But if so, it should be on the basis of complete openness about the figure so that we can judge the decision on its merits.

My first question to the noble Lord is whether the Government stand by their calculations on the costs of the National Health Service implicit in the clause of the Bill as it now stands. My view is that the Government's original forecast is difficult to sustain. As the noble Lord, Lord Williams, said, we ought to be a little clearer on that point.

There is one other matter which I wanted to raise with the noble Lord this evening and which I think is very important. I wanted to ask him what view the Government are taking of the ruling of Mr. Justice Henry in a recent judicial review in favour of the company SKF and against the Department of Health and Social Security. From that it appears that not only may copying under licences of right be illegal but also all applications to make generic drugs, even when the patent has expired. If this were to become the accepted position under law, it would have a very profound and far-reaching consequence for the cost of drugs in this country and as a spin-off a very large-scale effect on the economics of the National Health Service.

I have had a considerable amount of correspondence on this. I have had a letter from Professor Andrew Herxheimer of the Department of Clinical Pharmacology and Therapeutics at Charing Cross. In it he says: I completely agree that the new Bill should encourage competition from generic drug producers after the expiry of the patent. The legal position cannot be allowed to remain the mess it has become after Mr. Justice Henry's decision". I have another rather longer letter from the regional principal pharmacist in the North East Thames Regional Health Authority which I shall not read out at this time of night. I think it would be very interesting for the Committee to know what action the Government are proposing to take about this.

Finally I wish to return to the position that I adopted when we were discussing the Bill of the noble Lord, Lord Northfield, which was broadly that the repeal of licences of right, if that is what is due to the industry, should be accompanied by some stimulus to generic production and some attempt to limit National Health Service costs in the future. To that end I moved, but subsequently withdrew, an amendment which would have made generic substitution mandatory on the pharmacist subject to a veto by the general practitioner. For that amendment I simply adopted the method proposed in Section 24 of the Greenfield report on effective prescribing, with which the noble Lord, Lord Rea, and no doubt other noble Lords are familiar.

I still find it a little hard to understand why the Government have endorsed, as they have on a number of occasions, the importance of economic and effective prescribing but cannot bring themselves to take the two steps most calculated to bring this about, which are, first, to ensure the availability of generic products and, secondly, to encourage their use by general practitioners by some sort of mechanism such as that advocated by Greenfield— that is to say, the pharmacist would substitute a generic equivalent where one existed unless the prescribing doctor indicated otherwise in a box which would be provided for that purpose. Generic prescription is, after all, mandatory in hospitals and it is hard to see how the public at large would suffer by its further extension into general practice, as it has already taken place to some extent.

The Government have brought in the limited list scheme and that has naturally achieved some savings but nothing in comparison with what would be achieved by the wider adoption of generic substitution. If the interests of the pharmaceutical industry are at stake here and causing concern, it is worth pointing out that in the United States, where generic products are approaching a 50 per cent. share of the market, this has been accompanied by increased patent protection, so there is no reason why the two should be incompatible.

I should be interested to hear from the noble Lord why we should not follow the same road in this country. If he can tell me that the Government are prepared to consider all these matters with an open mind and with a view to curtailing National Health Service costs, which is a matter of great preoccupation at the moment, I shall have less difficulty with this clause as it stands and I shall perhaps not feel obliged to put down another generic substitution amendment. But, if I do not get such encouragement, I have to tell the noble Lord that I shall certainly want to consider putting down such an amendment at a later stage in the Bill.

Lord Monkswell

I am sorry to intervene at such a late hour but I wish to make two very quick points. First, I hope that the Government can come up with some mechanism whereby the licence of right provision can be done away with. There has been some discussion earlier and I shall not go into that.

Secondly, following the amendment of the noble Lord, Lord Rea, and the Government's very sympathetic response to it, it would seem to me as a layman in pharmaceutical terms that there must be incredible pressures on pharmaceutical companies actually to get their new drugs on to the market, given that their protection starts from the point at which the patent is registered or accepted rather than when they start marketing the drug. I wonder whether there is not sometimes so much pressure that they cut corners in terms of the checking and safety provisions for drugs. It has been mentioned in my ear that they are not allowed to, but there have been a number of cases over the past few years where drugs have come on to the market and then after a year or two have had to be withdrawn. I wonder whether the suggestion that the noble Lord, Lord Rea, made that the pharmaceutical companies should be given 10 years of effective safe marketing would reduce the tremendous pressures that must be imposed on them to get their drugs on to the market quickly.

Lord Beaverbrook

I am sure that the noble Lord, Lord Monkswell, will not be surprised if I do not take up again his invitation to debate the matters of consumer safety, drug testing or licences of right. However, I am grateful to the noble Lord, Lord Williams of Elvel, and I think that we are more likely to find common ground on the clause in the context of the amendment put forward by the noble Lord, Lord Rea, than on the suggestion to recycle extra revenue into further R&D. Perhaps the matter will become clearer when we have responded fully to that amendment.

Perhaps I may say to the noble Lord, Lord Kilmarnock, that the Department of Health estimate of the likely overall cost, which is in the range of £5 million to £8 million, could be widened at both the lower and upper ends. However, that indicates the expected order of costs. There are a number of factors to be taken into account, in looking at the 1990s, in a market of discovery. Who knows what drugs are waiting in the wings to topple today's best sellers? Who can say what doctors will prescribe for their patients at that time? Factors such as those cause wide variations in estimates of cost. I believe that we must look at the relatively modest cost of abolition against a widespread gain in confidence from the major pharmaceutical companies prepared to invest in this country in research and manufacturing.

I can assure the noble Lord, Lord Kilmarnock, that the Department of Health understands his concern over the continued availability of generic medicines. The licensing authority has taken immediate steps to ensure that it abides by the recent judgment by Mr. Justice Henry. The Department of Health and Social Security is studying that judgment and, once the precise terms of a consequential order, which is to be made shortly, are known, it will decide whether to appeal and what if any further action is called for. In the meantime, it would be premature for me to make any further statement about the implications of the judgment. Perhaps I may further say to the noble Lord that the Government do not propose to encourage generic substitutions. However, they already encourage doctors to prescribe generically.

Clause 266 agreed to.

Clauses 267 and 268 agreed to.

Schedule 5 [Patents: minor amendments]:

Lord Beaverbrookmoved Amendments Nos. 309 to 311:

Page 177, leave out lines 6 to 11 and insert— ("(2) In section 43 of the Patents Act 1977 (supplementary provisions with respect to employees' inventions), in subsection (4) (references to patents to include other forms of protection, whether in UK or elsewhere for "in sections 40 to 42" substitute "in sections 39 to 42".").

Page 177, line 42, leave out ("any such additional matter") and insert ("matter extending beyond that disclosed in the application as filed").

Page 177, line 45, leave out ("any such").

The noble Lord said: Perhaps it will be for the convenience of the Committee if I move en bloc Amendments Nos. 309, 310 and 311. Those amendments clarify and simplify certain provisions in Schedule 5. The first amendment stems from the recognition that the proposed paragraph 7(4) extending certain rights for employee inventors to patent applications made anywhere in the world is unnecessary. The required effect can be achieved simply by extending the scope of a similar provision already existing in Section 43 of the Patents Act 1977.

The second and third amendments clarify the provisions in the new Section 76 of the Patents Act 1977 which would be inserted by paragraph 10. In subsections (2) and (3) of the new Section 76, the words "any such" in the phrase "any such additional matter" do not clearly identify the type of additional matter in question. The words refer back to the term "additional matter" in subsection (1). However, the definition of additional matter in subsection (1) refers to an earlier application and is inappropriate for subsections (2) and (3) which are not concerned with earlier applications. The amendments will eliminate any possible confusion. I beg to move.

On Question, amendments agreed to. Schedule 5, as amended, agreed to.

Clauses 269 and 270 agreed to.

Clause 271 [Supplementary provisions as to fraudulent reception]:

Lord Beaverbrook moved Amendment No. 312: Page 123, line 13, leave out subsection (5) and insert— ("(5) Any expression used in section 269, section 270 or this section which is defined for the purposes of Part 1 of this Act (copyright) has the same meaning as in that Part.").

The noble Lord said: This amendment tidies up a minor drafting point in order to clarify the meaning of subsection (5) of the clause. I beg to move.

On Question, amendment agreed to.

Clause 271, as amended, agreed to.

12.30 a.m.

Clause 272 [Fraudulent application or use of trade mark an offence]:

Lord Mottistone moved Amendment No. 312A: Page 23, line 17, leave out ("section is") and insert ("sections are").

The noble Lord said: The amendments are grouped so that there might be 10 debates, but I have put them all together and, with the agreement of my noble friend on the Front Bench, I shall speak to Amendments Nos. 312A to 312N together. I am advised on this matter through the CBI by the Anti-Counterfeiting Group.

Clause 272 proposes a new Section 58A of the Trade Marks Act 1938. It contains a new offence to deal with counterfeiting, which a government White Paper has rightly described as a pernicious activity. Clause 272 is greatly welcomed both by industry which falls victim to this practice and the trading standards service which has hitherto fought to control it. All the amendments that have been tabled are designed solely to achieve a smoother fulfilment of the objectives of the clause.

The amendments fall into two groups. The first group consists of Amendments Nos. 312B to 312F, which put forward four separate drafting changes— two in subsection (1) of the new Section 58A—firstly to remove wording implying an element of intent, which is believed to be inappropriate at this point (Amendments Nos. 312B and 312D); and secondly, to catch possession of counterfeit goods by way of trade (Amendment No. 312C). There is one change in subsection (2) of the new Section 58A which would change the burden of proof of a belief held by a defendant into a defence which he may raise; that is covered by Amendment No. 312E. I have already spoken to Amendment No. 312F, which my noble friend has undertaken to accept.

Turning to the second group consisting of Amendments Nos. 312A and 312G to 312N, all those amendments put forward powers for the proper enforcement of Section 58A. They do it by proposing additional new sections numbered 58B to 58H. These sections are all modelled on existing legislation or on earlier provisions in this Bill for the enforcement of copyright. There is enforcement by trading standards officers (Section 58B, Amendment No. 312G); power for the police to apply to a magistrate for a warrant to search for counterfeit goods (the proposed new Section 58C, Amendment No. 312H); power for a court to order forfeiture of counterfeit goods (Section 58D, Amendment No. 312J); and power for enforcement authorities to share relevant information with each other and in proper cases with industry (proposed new Section 58E, Amendment No. 312K). In addition, there are provisions enabling Customs to treat imports of counterfeit goods as prohibited. These amend existing provisions for copyright to bring them into line with provisions for copyright in Clauses 102 and 103 of this Bill. There are also Sections 58G and 58H which are covered respectively by Amendments Nos. 312M and 312N.

All these amendments are designed by people who are experienced in these matters to tidy up Clause 272 and I hope that they will appeal to my noble friend the Minister if not in total then in part. If they are not entirely appealing, perhaps my noble friend may be able to say that he might be able to improve the wording, or whatever, of the relevant parts. I beg to move.

Lord Beaverbrook

For the convenience of the Committee, I shall speak to Amendments Nos. 312A to 312N, excluding Amendment No. 312F, which was spoken to earlier by my noble friend. We believe that Amendments Nos. 312B and 312D proposed by the noble Lord will not have the effect that he desires. Instead, we believe that they will merely serve to obscure the scope of the offence. The replacement of the formula "used or intended to be used" by "for use in" would not make it any less necessary to prove the intention of the person who made, sold or used material for labelling, packaging or advertising goods, but might require the prosecution to establish also that the material was of a type which was normally used for that purpose. This could lead a prosecution to fail merely because the defendant made, or intended to make, an unusual use of material.

As the clause is drafted, it is enough that the material either has been used or is intended to be used for a counterfeiting purpose. If it has been used for that purpose, no further proof of intention is needed. The amendment, however, would render evidence of actual use inadequate. It would become necessary to prove the intention underlying the use, in order to show that the material was for use in labelling, packaging or advertising goods.

Moreover, there might be cases in which the accused intended to use material for labelling, packaging or advertising purposes which was not normally used for that purpose. As the clause is drafted, proof of his intention would be enough. The amendment might, however, open the door to a defence along these lines: "I know that I intended to use this material to label goods, but it is not normally used for that purpose, and you have failed to prove that it is material for use in labelling goods". I am not saying that such a defence would succeed, but there is no point in running the risk that it might.

Turning to Amendment No. 312C, we are happy to accept this in principle. It would make it an offence merely to be in possession of counterfeit goods in certain circumstances—the amendment says "by way of trade", but I shall come back to that phrase in a minute—without the prosecution having to prove an actual sale or offer for sale. When the Bill was introduced, we did not think it right to create an offence of mere possession punishable by 10 years' imprisonment; but having received representations on the point and having heard what has been said here today, we think that possession should be added to the clause. The man with a warehouse full of counterfeit goods ought to be convicted whether or not the prosecution can prove that he has successfully made a sale.

We do not, however, think that "by way of trade" is right. That phrase appears in the Copyright Act 1956, and when we repeated it in the copyright clauses sent out for consultation last year we were rightly questioned about its obscurity.

I suspect that what is needed is something along the lines of Clause 98(1)(c), "in the course of a trade or business with a view to the commission of a further offence under this section." However, we should like to give further thought to the exact words and come forward with our own amendment at a later stage.

Amendment No. 312E would replace subsection (2)(c) with a statutory defence, and this is another amendment that we can accept in principle. We recognise that the existing formulation of subsection (2)(c) would place on the prosecution the heavy burden of proving an absence of belief on the part of the accused.

Proof of a negative is always difficult. We believe that the shifting of the burden of proof would ease that burden without being unfair to the accused.

I should like to be able to accept this amendment without more ado, but unfortunately the drafting is not quite right. It does not say that for the defence to succeed, the accused must actually believe as well as having reasonable grounds for belief. Obviously, a person who has reasonable grounds for believing his entitlement but actually knows otherwise ought not to be able to use this defence. If the noble Lord would withdraw this amendment, we shall deal with this question together with the other amendments that we have undertaken to bring forward on this clause at a later stage.

Turning to Amendment No. 3I2G, I can say at the outset, that we favour giving the trading standards officers powers under the new law. In practice, they are the people who will in many cases uncover evidence of counterfeiting and it would be anomalous if they could not use that evidence to bring a prosecution.

The approach adopted in the Amendment No. 312G is attractive because it would adapt the powers trading standards officers already have under the Trade Descriptions Act to enter premises and seize goods or documents. In practice it would be unlikely to result in any new encroachment on private rights, or a drain on local authorities' resources, because the new law is not expected particularly to increase the number of cases needing investigation at the outset. The benefits of Clause 272 are more in improved chances of conviction and more realistic sentencing in serious cases.

Local authorities will clearly have an interest in any proposals concerning trading standards officers and we have already started a consultation exercise to determine their views on the possibility of trading standards officers being given powers to enforce the new offence. As I have said, I believe that the additional resource implications will be minimal. I therefore hope for a positive response, particularly since the proposals are supported by the trading standards officers themselves. Once this consultation is completed we shall be in a position to bring forward whatever amendments may be needed.

New Section 58C proposed by Amendment No. 312H would give constables new powers to enter and search premises over and above the general powers they have under the Police and Criminal Evidence Act 1984. Under the existing law a constable may obtain a search warrant only if the offence committed is a serious one. This depends on the circumstances of the individual case. The amendment would remove the need to show that the offence was serious. This is, however, unnecessary if trading standards officers are given the powers. I indicated just a moment ago that we are prepared in principle to give them. These officials have general authority to enter business premises and can obtain warrants in respect of residential premises by showing due cause. I therefore cannot accept Amendment No. 312H.

Trading standards officers will of course be able to take police officers with them if violence is anticipated. In those serious cases where the police may be expected to take a lead in the investigations they will be able to obtain warrants in any case. Accordingly I ask my noble friend to withdraw the amendment as I certainly could not accept it.

Turning now to Amendment No. 312J, property used in the commission of an offence is already liable to be forfeit under general powers given to the criminal courts. These powers are in fact being strengthened by Clause 65 of the Criminal Justice Bill, which is currently being debated in another place. Nevertheless, we acknowledge that counterfeiting gives rise to special considerations. Counterfeits are not like other property used in the commission of an offence. For example, housebreaking equipment may be perfectly innocent everyday tools. It would not be right for hammers or screwdrivers to be confiscated unless they actually related to an offence for which a conviction had been secured. Counterfeits, on the other hand, are not innocent in themselves. In a sense they are the offence.

But there is a problem. It is that a distinction is quire rightly being drawn between counterfeiting, which is a criminal matter, and simple trade mark infringement, which is not. But how is a court to decide, where there has been no conviction, that goods are counterfeit as opposed to straightforward civil infringements? We must be very careful that the criminal courts should not trespass on what ought to be a matter for the civil law.

The proposed amendment takes no account of these considerations and we therefore believe it is much too broadly framed. We are, however, prepared to look again at whether there is scope for some strengthening of the powers of forfeiture; for example, where convictions have been secured on specimen charges only but where large quantities of goods similar or identical to those in respect of which charges were brought were also seized.

Amendment No. 312K has two aspects. Both are concerned with the disclosure of information by enforcement authorities. The first aspect is that an enforcement authority is to be permitted to pass on information to any other enforcement authority. We have no problem with this aspect. Indeed we believe that exchange of information of this kind is important for efficient enforcement. However, we see difficulties in the second aspect in which it is proposed that enforcement authorities should be able to pass on information. The amendment would create a duty to pass certain information to trade mark proprietors and give the courts power to order disclosure in certain circumstances. We are not convinced that that is right. It is not at all clear to what extent information about criminal investigations should be made available for the purposes of private litigation, particularly only to one side in that litigation. There are matters of general principle involved here and we shall have to think very carefully about what amendments, if any, should be made.

We have reservations about Amendments Nos. 312M and 312N. In the first place, importation of counterfeit products from outside the EC is already covered by an EC regulation. Thus the amendments could not be applied to such imports. Furthermore, trade mark proprietors already have the right to notify Customs and Excise of the expected importation of all infringing goods, whether counterfeit or not, and to have them treated as prohibited. This right is given under Section 64A of the Trade Marks Act 1938, which was inserted by Section 17 of the Trade Descriptions Act 1968.

The proposed new provision would, however, go much further in allowing counterfeits to be treated as prohibited goods for up to five years. We believe that such a provision would place a heavy burden upon the Customs and Excise. We are not convinced that this would be justified. We shall, however, look carefully at resource implications and consider whether there is anything more that can be done.

I hope that that is helpful to the noble Lord in relation to this large group of amendments. Perhaps he would like to consider further what I have said.

Lord Lloyd of Kilgerran

I am very grateful for the clear comments made by the Minister. I, like my noble friend Lord Ezra, whose name is attached to this amendment, was also approached by the group known as the Anti-counterfeiting Group. My noble friend Lord Ezra asked me to tell the Committee that, as president of the Institute of Trading Standards Administration, he is very keen to strengthen the provisions against counterfeiting. He specifically referred to Amendment No. 312G, which the Minister approached with some sympathy.

Lord Mottistone

I am grateful to my noble friend for his careful explanation of all these amendments and indeed for his acceptance of so many of them in principle, and for his undertaking to look at most of those that he has not accepted. I think that it is most hopeful that the major purpose of this group of amendments to tidy up Clause 272 will be achieved, if not immediately, at later stages of the Bill. I beg leave to withdraw Amendment No. 312A.

Amendment, by leave, withdrawn.

[Amendments Nos. 312B to 312E not moved.]

Lord Mottistone moved Amendment No. 312F: Page 124, line 11 after ("director,") insert ("manager,").

The noble Lord said: I beg to move. I have already spoken to this amendment.

On Question, amendment agreed to.

[Amendments Nos. 312G to 312N not moved.]

Clause 272, as amended, agreed to.

Clause 273 [Financial assistance for certain international bodies]:

[Amendment No, 312P not moved.]

Clause 273 agreed to.

Clause 274 agreed to.

Clause 275 [Extent]:

Lord Beaverbrook moved Amendment No. 312Q: Page 124, line 39, leave out ("(performers' rights)") and insert ("(rights in performances)").

The noble Lord said: Amendments Nos. 312Q, 313 and 314 are by way of corrections to Clause 275. I hope that it is convenient to the Committee to deal with them all together.

First, we only recently spotted an error in subsection (1), which Amendment No. 312Q will correct. The title of Part II is not "performers' rights" but "rights in performances". Secondly, the Committee will doubtless have noticed that subsection (1) does not specify the relevant clause in Part II which deals with the extent of that part. We therefore need to insert a reference to Clause 185 in subsection (1).

Thirdly, noble Lords will note that Part VII commences with Clause 269 and not Clause 271, as might be inferred from subsection (4)(a). As the subsection stands the bill is silent as to the extent of Clauses 269 and 270. Amendment No. 313 will correct our mistake and rectify this omission. I beg to move Amendment No. 312Q.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendments Nos. 313 and 314:

Page 124, line 40, after ("146") insert (", 185").

Page 125, line 6, leave out ("271") and insert ("269").

On Question, amendments agreed to.

Clause 275, as amended, agreed to.

Clauses 276 and 277 agreed to.

Schedule 6 agreed to.

[Amendment No. 315 not moved.]

Schedule 7 [Repeals]:

Lord Lloyd of Kilgerran moved Amendment No. 315A:

Page 188, line 3, at end insert—

("1938 c. 22

Trade Marks Act 1938

Section 28(6)").

The noble Lord said: I beg to move this amendment. I have already made a few remarks about this and the noble Earl, Lord Dundee, said that he would reserve his comments until this particular amendment came up for consideration.

I should like to refer to a letter written by the Chartered Patent Agent, Mr. Ashmead, to the Secretary of State for Trade and Industry, pointing out the importance of obtaining trade mark registrations in regard to character merchandising. The Trade Marks Act 1938 did not cover such trading and did not realise that such trading was possible. I should like to reiterate what was said by the noble and learned Lord, Lord Bridge, about Section 28(6) of the Trade Marks Act. He said: It is a complete anachronism and the sooner it is repealed the better".

I beg to move.

Lord Beaverbrook

I fully understand the purpose of this amendment. It is to sanction the practice known as character merchandising; that is, the granting of a licence by a person who has created, for example, a children's cartoon character, allowing the use of that character as a trade mark on goods such as clothing or toys. This is of course a practice undreamt of at the time of the 1938 Act.

In the Government's view however this amendment should not be accepted. In the first place it would not be timely, as the Department of Trade and Industry is currently considering what changes in this area of the law are desirable, particularly in the light of developments in the European Community. Character merchandising is one of the subjects on which the department has consulted interested circles, but it is in the context of a more general look at trade mark law that any necessary action should he taken rather than in this Bill.

In the second place, even accepting that some change in the law is needed, I am not convinced that a simple repeal of subsection (6) of Section 28 provides an answer. That provision was included to prevent the practice of dealing in trade marks as a commodity in their own right by means of speculative registration by a person who has no intention of using the marks but who instead offers to sell or licence them to bona fide users. We would not wish to open the door to this practice and would, therefore, before agreeing to repeal subsection (6) want to consider carefully whether some other provision should replace it in order to control trafficking of this kind.

It is for that reason that I cannot accept the noble Lord's amendment as drafted at the moment.

Lord Lloyd of Kilgerran

I thank the Minister for his reply. The Bill already contains matters relating to trade marks. The amendment is simple and is easily incorporated into the Bill. The last major review of copyright was in 1956 and also in the Trade Marks Act 1938. The repeal is urgently required by industry and if this opportunity in the Bill is missed there may not be another for many years. The law of trade marks is part of the overall scheme of intellectual property legislation and it is of great interest in the competitive atmosphere that the Government are endeavouring to encourage in this country.

After consideration of what the Minister has said, I shall withdraw the amendment on the understanding that the matter will be raised again at Report.

Amendment, by leave, withdrawn.

Lord Beaverbrook moved Amendment No. 316: Page 189, line 38 column 3, at end insert ("Section 88.").

The noble Lord said: This is a minor correction to ensure that the list of repeals in Schedule 7 is complete. Section 88 of the Patents Act 1977 is repealed by paragraph 14 of Schedule 5. It ought, therefore, to be included in the Schedule 7 list. I beg to move.

On Question, amendment agreed to.

Schedule 7, as amended, agreed to.

In the Title:

Lord Lloyd of Kilgerran moved Amendment No. 317: Line 3, after ("designs") insert ("and trade marks").

The noble Lord said: I have already spoken to this amendment. I beg to move.

Lord Beaverbrook

I was not quite sure what the noble Lord intended by this amendment. Read literally it would cause the title to refer to "a design right in trade marks". This of course does not make sense. I assume that his concern is to ensure proper mention of trade marks, but this is already achieved in lines 5 ("trade mark agents") and 9 ("fraudulent application or use of a trade mark") and no other provisions in the Bill relate to trade marks.

The Government are currently considering what changes to trade marks law are desirable, particularly in the light of developments in the European Community. When the details of all these changes are known it will be necessary to have separate legislation dedicated to trade marks. I hope, therefore, that we can leave it until that point, which I trust will not be too far off.

Lord Lloyd of Kilgerran

I am obliged to the Minister. When he says that it will not be too far off, can he give any indication as to whether this is a matter which can be dealt with before this Bill leaves this place?

Lord Beaverbrook

Absolutely not.

Lord Lloyd of Kilgerran

With great regret, I cannot understand the reply of the Minister, but in view of the lateness of the hour I will not press the matter; although as this is the last amendment of the Committee stage I had hoped to achieve some success. Unhappily I have not done so.

Before I ask leave to withdraw the amendment, I thank the Minister for his courtesy and for the way in which he has treated these matters in this long Committee stage.

Lord Beaverbrook

I am grateful to all noble Lords who have participated in many days of long deliberation in Committee on this complicated Bill. When we started the proceedings I said that I should be interested to hear the views of Members of the Committee and I have found them particularly helpful with their comments. I hope that we are working along the road of improving this Bill as we continue with our proceedings.

Lord Williams of Elvel

I join with the noble Lord, Lord Lloyd of Kilgerran, in thanking the noble Lord, Lord Beaverbrook, for his patience and hard work and also the noble Earl, Lord Dundee. They have both worked extremely hard on this Bill and I believe I am right in saying that this is the first major Bill that the noble Lord, Lord Beaverbrook, has piloted through this place. It is a long and complex Bill and he has handled it extremely well.

Lord Lloyd of Kilgerran

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

House resumed: Bill reported with amendments.

House adjourned at two minutes before one o'clock.