HL Deb 10 March 1988 vol 494 cc805-60

3.34 p.m.

Lord Beaverbrook

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Lord Beaverbrook.)

On Question, Motion agreed to.

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

Lord Lucas of Chilworth moved Amendment No. 397A:

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: My Lords, this amendment is precisely the same as one that I moved on 12th January during the course of consideration of this Bill in Committee. I do not propose to rehearse the arguments that I put forward at that time. However, I remind your Lordships that my noble friend the Minister replied that his department had been in touch with the British Agrochemicals Association and that, without commitment, he would consider further arguments that might be put forward. It is my understanding that he has indeed given further consideration to this matter.

There have been several meetings between the industry and either the Department for Trade and Industry, which is my noble friend's department, or MAFF; namely, on 20th January and 5th, 11th and 25th February. It is my understanding that his right honourable friend the Secretary of State at the Ministry of Agriculture, Fisheries and Food has agreed that some of the delays in licensing agrochemical products are very long and unreal. In part that was the argument which I sought to put before the Committee.

In view of those meetings and discussions I hope that the fears of the Government have been allayed and that they will support this amendment. That support will recognise the undoubted importance of the agrochemical industry not only to the wellbeing of British agriculture but also to the environment. Therefore I hope that the House, and indeed my noble friend, will agree to my amendment on this occasion. I beg to move.

Lord Williams of Elvel

My Lords, as the noble Lord, Lord Lucas, will recognise after our discussions in Committee, we on this side of the House oppose this amendment. The point on which the noble Lord and I do agree is that the agrochemical industry is an important industry and this is an important amendment. We differ in thinking that the amendment would have a beneficial effect, as the noble Lord appears to believe.

The market for agrochemicals of this type is estimated to be of the order of £350 million per annum. That is why I support the view of the noble Lord, Lord Lucas, that it is an important business and an important sector of the economy. The question that must be answered and which the noble Lord tried to answer in Committee—and quite rightly he has decided not to summarise his arguments again—is whether this amendment, if accepted, would have an effect on farmers' costs and, if so, what that effect would be. There is the related question as to whether it would reduce competition.

Clearly if it reduces competition it is liable to have an effect on farmers' costs. I understand that the Government want to promote competition in all respects, and if we could demonstrate that this amendment will reduce competition, it would be normal for the Government not to accept it. The question whether it would reduce competition is largely answered by the submissions of the major companies themselves. They have made representations to us and, I am sure, to the Government and many noble Lords, and maintain that the market is so price competitive that prices would not be affected by any change in the licence of right provisions; it is only market share that would be affected. Therefore we are talking about market share rather than price.

If that is the case, I do not see why those companies, which after all are big enough, should be so worried about this situation. Of course, the generic companies take quite a different view of the matter. They believe that something of the order of a 10 per cent. price reduction will be achievable if generic producers are allowed to continue with their licence of right procedures.

We should like to see the Government oppose this amendment as well. We should like to see them at least consult further than has been indicated by the noble Lord. For instance, we should like to see them consult the National Farmers' Union—indeed, we wonder whether that union has been consulted. We should like them to consult environmental interests before taking any decision, if they are inclined to support this amendment. We believe that the amendment will have anti-competitive effects. We resist it and hope very much that the Government will resist it also.

Lord Beaverbrook

My Lords, when this amendment was tabled in Committee, I explained that we were unable to take a position on it at that time. This was because clarification was needed on certain aspects of the case put to us by the research-based agrochemicals industry. The industry was aware that the case for exempting pharmaceutical patents from licences of right had been accepted on the basis of data showing a substantial increase in the time taken to obtain marketing approval, thus decreasing the effective patent term. It therefore had produced data for pesticides relating to the time taken to get full marketing approval. We have now had the opportunity to consider further aspects of the case concerning pesticides, including data now provided by the industry relating to the time taken to secure provisional marketing approval since an important distinction between pharmaceuticals and pesticides is that the latter can be marked before tests are fully completed on the basis of such an approval.

I regret to have to say that the Government are not convinced that it would be appropriate to change the provisions of the 1977 Patents Act for pesticide products and I therefore have to resist the amendment standing in the name of my noble friend Lord Lucas. I would, however, remind the noble Lord of the order-making powers in paragraph 4A. Thus, if at a later date it became clear that circumstances warranted, we would propose to extend the exemption from licences of right to pesticide patents by order.

We are not in any way convinced that this amendment is necessary at this time, and therefore I have to resist the amendment standing in the name of my noble friend.

Lord Lucas of Chilworth

My Lords, I confess to being somewhat disappointed at my noble friend's answer, but I am in some respects reassured that the door is not firmly closed. It is for the industry to pursue its case if it thinks that is the way to go forward.

I do not think that I could leave this matter without marginally correcting the noble Lord, Lord Williams of Elvel, who sought to suggest that there was going to be some increase in farmers' costs, that competition was going to be limited, and so on. I shall have to read carefully the points he raised.

If the noble Lord looks at col. 1197 of our Committee proceedings on 12th January, he will see that I said—and nobody has corrected me because the figure I gave was right—that the United Kingdom accounts for only 3 per cent. of world markets in the products to which this amendment applies. It is a little misleading for him to trail that herring across the ploughed field.

Lord Carter

My Lords, will the noble Lord give way?

Lord Lucas of Chilworth

My Lords, I shall not give way because I know that the House wishes to proceed. I shall now, with some regret, beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Stockton moved Amendment No. 397AA:

Page 120, line 39, at end insert— ("( ) if an application is made to the Secretary of State for the making of an order under the preceding sub-clause, he shall either:

  1. (i) make such order, or
  2. (ii) publish the application with a statement of the ground on which he has decided not to make such order.").

The noble Earl said: My Lords, I am moving this amendment because I believe that there is an inconsistency in Clause 266. It appears to me that it is wrong that there should be discrimination in respect of certain classes of invention, and certain kinds of use of inventions. While no doubt none of us begrudge the pharmaceutical industry the success that its massive pressure on the Government has produced, surely the principle of legislation should be that what is provided should be provided for all or for none.

I cannot see that the protection afforded to a new drug should be greater than that afforded, for example, to a scanning device or a piece of radiotherapy equipment that in the case of the treatment of cancer might be used in harness with that very same drug. I beg to move.

Lord Williams of Elvel

My Lords, I confess that I have a certain sympathy for the amendment moved by the noble Earl, Lord Stockton. I am concerned in particular in Clause 266 about the order-making powers to which the Minister referred on the previous amendment. The Minister pointed out quite correctly that under Clause 266 as drafted the Secretary of State may extend the uses for which licences of right can be abolished by order. There does not seem to be any provision on how this order might be treated by Parliament—whether it is by negative or affirmative procedure—by what criteria the Secretary of State shall make an order, whom he shall consult, or whether he shall give any explanation as to why he is making an order or why he is not making an order.

It seems to me another very wide power that we arc granting to the Secretary of State to extend the primary legislation, which is what we are doing, by means of an order. The primary legislation specifically mentions pharmaceuticals. The noble Lord, Lord Lucas, has moved an amendment specifically trying to bring pesticides into the primary legislation. The Minister replies that he can do all that and anything else he wants simply by an order. That is why I am sympathetic to the noble Earl's amendment. It obliges the Secretary of State to give an explanation as to what he is doing.

3.45 p.m.

Lord Beaverbrook

My Lords, in responding to Amendment No. 397AA, standing in the name of my noble friend Lord Stockton, perhaps I should explain that we do not envisage orders being made under subsection (3) of Clause 266 following formal applications to the Secretary of State. Any industry that believes it has a case for its products being exempt from the transitional licence of right provisions of the Patents Act 1977 will be free to present its case to the Government. We should then consider the case, seeking clarification if necessary, before deciding whether to accept it.

Naturally if the case were unacceptable we should explain why to those who had presented it. If in such circumstances an industry felt that it had been unjustly treated by the Government, use could be made of normal parliamentary procedures, such as debates and questions, to draw attention to that grievance. It is for that reason that I have to resist the amendment standing in the name of my noble friend. The Secretary of State will have received no formal application that he could then publish. Furthermore, normal parliamentary procedures could be used to draw Parliament's attention to any perceived unjust treatment.

As I said in responding to the amendment of my noble friend Lord Lucas, we do not see any case for the agrochemical industry at this stage to be treated under paragraph 4A. However, I am also not aware of any other industry that feels that it perhaps has a case. I should also point out that we are dealing here with a very small class of products, a number of products that fell essentially between the two previous Patents Acts. I think I am right in saying that during the next three or four years this question will have evaporated, so to speak. I should be very surprised if there were to be any order necessary under paragraph 4A.

Turning to the point made by the noble Lord, Lord Williams, any order would be subject to annulment in accordance with Section 124 of the Patents Act 1977. I hope that I have reassured noble Lords that we have no particular case in mind in paragraph 4A. I hope that I have been able to explain to my noble friend why we are unable to accept his amendment.

Lord Howie of Troon

My Lords, before the noble Lord sits down, will he elaborate very briefly on his use of the word "evaporate" or "evaporated", which I thought I heard? Does he mean that this exception is of limited duration? If it is of limited duration, would it not be as well if the Bill were to say that?

Lord Beaverbrook

My Lords, with leave, in using the term "evaporate" I meant to convey that the number of patents that are caught by the linking provisions of the two previous Patents Acts is relatively small. Indeed, all subsequent patents are for 20 years duration. Before three or four years have passed, all new patents and all existing patents will be of 20 years duration.

Lord Williams of Elvel

My Lords, will the noble Lord very kindly repeat the section of the Patents Act to which he referred. Was it Section 124 or 122?

Lord Beaverbrook

My Lords, It is Section 124.

The Earl of Stockton

My Lords, I thank the Minister for his explanation, which I shall read with great care. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hacking moved Amendment No. 397B: Page 121, line 8, leave out ("fifteenth") and insert ("sixteenth").

The noble Lord said: My Lords, with your Lordships' leave, I shall also address my remarks to my other amendment, Amendment No. 397C.

As noble Lords will have been able to identify, my amendment concerns some adjustments in our patent law which are proposed in Clause 266 of this Bill. This is a complex subject and it may be helpful to your Lordships who have not heard the argument at earlier stages or the Bill if I briefly set out the history of the matter.

Patent protection has been part of our law for many years. Indeed the earliest statute goes back as far as 1624. But over the years there has been a growing increase of the period of patent protection and in 1977 in the European Patent Convention the period for patents in the European Community was proposed to be increased from 16 to 20 years. So it was that the Patents Act 1977, having passed through both Houses of Parliament, increased the protection for patents from 16 to 20 years. However, at the same time that Act created licences of right which enabled applications to be made after the end of the 16th year of the patent for patents granted between 1967 and 1978. It enabled persons to apply for the licence for a patent even though the full period of that patent had not expired.

Out of this the pharmaceutical industry has found itself in a particularly vulnerable position. Pharmaceutical companies make immense investments in research and development. The industry's products are particularly vulnerable to exploitation. Compare, for example, a sophisticated electronic invention subject to patent, with a pill (also subject to patent) on the shelf in a chemist's shop.

Another factor of extreme importance to the pharmaceutical industry is the increasing length of time between the patent being granted and the marketing of that product. That is because of the more and more stringent tests that are being applied, and rightly so, to drugs before they are marketed. This period between the date of grant of the patent and the commencement of marketing is for some drugs up to 12 years. As your Lordships will appreciate, if there is a right to a licence of right, the pharmaceutical companies who have developed those products are given a period of only four to five years for marketing under the patent protection.

Out of this history the Government pledged—I think it was the noble Lord, Lord Lucas, in April 1986—that there should be abolition of licences of right. The vehicle intended for this purpose, was the Intellectual Property Bill. However, the Government abandoned that Bill and with it their pledge for the abolition of licences of right.

The next step in the history was the Bill introduced by the noble Lord, Lord Northfield—the Patents (Amendment) Bill, which came before your Lordships in late 1986 and was again before your Lordships in early 1987. But the general election ended that attempt to reform the law and abolish licences of right. Therefore much time has been lost and the result has been that some drugs—two in particular, Tagamet and Triludan—have found themselves not protected by the proposed abolition of licences of right when they would have been protected if action had been taken at the time or shortly after the Government's original pledge.

In those circumstances the noble Lord, Lord Lucas, at Committee moved an amendment which was criticised by the Government for, among other features, being too retroactive. My two amendments seek to present a more modest solution to the problem. They are separate but related. The first proposes to extend the period of patent protection by one year so that the applicant for a licence of right can apply under my amendment only at the end of the 16th year rather than the 15th year. Secondly, it protects only those applicants who have in good faith made a practical and serious investment in anticipation of reliance that a licence of right will be granted under the Bill.

The Bill is proposing, in fact, to create a new "right of expectation" because, as the House will appreciate, if licences of right can be granted only after the end of the 16th year the "loss" of that patent during the processing time-during which the applicant can apply for his licence under the licence of right—is no more than a loss of a "right of expectation".

Arguments have been presented against my amendments in the discussions that have taken place between those who have suggested them and the Minister's officials. An argument has been put up that by accepting the amendment an infringement would be created against Article 1 of the First Protocol to the European Convention on Human Rights because it is said that this right of an applicant to apply for, not to obtain, a licence, is a "possession". That simply cannot be right.

Another criticism that has been put forward in the discussions concerning my amendments is that there is a retroactive aspect. If that is right, many matters that come before the House in one way or another have a retroactive effect. In this case there has been abundant notice ever since the noble Lord, Lord Lucas, in your Lordships' House in April 1986 pledged the abolition of the licences of right. In the circumstances of that notice I ask the House not to allow the retroactive aspect of my amendments to damn them before your Lordships.

My amendment is a reasonable compromise. It is a less strong amendment than that moved by the noble Lord, Lord Lucas, and on that basis I commend it to your Lordships. I beg to move.

Lord Jenkin of Roding

My Lords, I should like briefly to support the amendments moved by the noble Lord, Lord Hacking. I want to make a couple of brief points. The real issue in this—and there will be other amendments which we shall be discussing later— is between the companies that spend very large sums on original research and which discover new chemical entities, often at great cost, and who have a long period to wait before they can be licensed, and companies that do not spend much on research. Indeed sometimes they spend nothing and rely, as it were, on the crumbs that fall from the table under the licence of right provisions to make the products and sell them on the market. The clause is designed to abolish those licences of Hat. It is something to which we shall come later.

The particular point on the amendment is: what is the right of a patent owner in the 16th year of his patent when an applicant for a licence of right has made an application during the 15th year and so has established some kind of an expectation that he might be able to have a licence of right if the terms can be settled? It seems to me that to argue, as I think the Government have, that the applicant, the generic producer, has somehow a possession which deserves the full protection of the law as against the right of a patent owner who was assured and was always assured of 16 years of protection, seems to me, to put it simply, a little fanciful. At the very least there should be a procedure whereby there can be an adjudication between which of the two parties has suffered the most—the one who has done the work, provided the new product, taken out the patent and was expecting 16 years, but finds that he does not have 16 years because the licence of right would derogate from that; or the applicant for the licence of right who may have incurred an initial expenditure in the expectation that he would receive his licence but who, if it were refused, would find that expenditure nugatory.

As the Bill now stands the scales in this dispute are tipped wholly in favour of the generic applicant and the patent owner, in effect, ends up not with 16 years but with 15 years. I do not believe that to be fair. As I understand the amendments of the noble Lord, Lord Hacking, they are to provide a procedure whereby the balance of justice can be determined on the basis of the questions: who has committed himself the most and where would the balance of justice lie?

I believe that this case deserves more consideration than it has so far received. It certainly is not to be dismissed solely on the ground that a right of expectation (which is all that it is) is obviously a possession, within the meaning of the protocol to which the noble Lord, Lord Hacking, referred under the European Convention on Human Rights, and that the case does not need further consideration. I do not believe that to be right. I was brought up in the law to believe in rights in esse and rights in posse. If ever there was a right in posse—that is to say, a right that had yet to be accrued as a firm right—it is a right that one might expect in certain circumstances to obtain a licence of right under a patent licence which has not yet expired.

I hope that my noble friend on the Front Bench will feel able if not to accept the amendments moved by the noble Lord at least to indicate that between now and the next stage he will look at the matter seriously. I believe that there is a serious point to be answered.

Lord Northfield

My Lords. I was interested to hear the points raised by the noble Lord, Lord Hacking. One of the two possible objections to his amendment has been so over-argued by the noble Lord, Lord Jenkin, that I shall confine myself to the second point of retrospection.

The noble Lord, Lord Hacking said that in private he had been warned against retrospection. When the original Bill which I introduced was before your Lordships I remember that we considered the issue of making the repeal of licences of right to some extent—the extent being arguable— retrospective. It will be two years in April since the Government promised the repeal. At that time I was told that any retrospection would bring only implacable hostility from Her Majesty's Government.

I thought about the matter last night when I heard the announcement made in another place about the retrospection which will apply to the control over the selling of assets by local authorities. Last night the Government announced that they were banning local authorities from selling assets as from midnight last night by way of a Bill which is not yet law. They are to introduce an amendment to the Bill which will be retrospective to last night. When such things occur, one wonders whether one has not been shortchanged by the Government in earlier discussions about licences of right.

I repeat the point that I made on the last occasion. There are on occasions good grounds for retrospection when due warning is given. Due warning was given about the repeal of licences of right nearly two years ago. If what happened last night is good I believe that at least some element of retrospection, as implied in this amendment, is also acceptable.

Viscount Craigavon

My Lords, I should like to encourage the Government to resist these amendments. For some time I have spoken in this House about the aspect of pharmaceutical licences of right and I was involved in the Bill to which the noble Lord, Lord Northfield, has referred. I hope that the Government will not submit to what amounts to special pleading for the benefit of particular products and firms.

I was surprised to be refreshed by the candour of the noble Lord, Lord Hacking, when he appeared to say that the real benefit of his amendments is for two particular drugs. I believe that to legislate on that basis with such amendments is the thin end of the wedge. Parliament should not submit to that kind of argument.

I understand that both amendments will provide enormous scope for legal disputation and delaying tactics. As regards Amendment No. 397B, the House should know that the procedure for agreeing licences of right is already bedevilled by delaying tactics in a way that was certainly not intended or anticipated by Parliament. Acceptance of the amendment would add to the scope for further delays in agreeing licences of right in the future. The noble Lord, Lord Jenkin, referred to a process of adjudication. I should be terrified to learn exactly what is involved, but I can foresee endless legal delays and manoeuvrings in order to hold up the process of licences of right.

As regards Amendment No. 397C, I question the principle of what is being attempted and the difficulty of interpreting the words in the amendment as presented to us, even if the principle were accepted. The words "practical and serious investment" are impossible to define given the different scale of operations and size of generic companies. The amendment also requires a subjective examination of the motives of the participants in the words "in good faith". Perhaps noble Lords can imagine that this will be a lawyer's paradise.

A further problem which arises in the amendment is what I might call a Morton's Fork. It is that companies which take practical and serious action in anticipation of a patent ending, or coming into licence of right, might be accused, and in some cases have been accused, of contemplating actions which may infringe the patent. In other words, the action which is being used as a criterion in this amendment is exactly that which may involve a company in trouble on the grounds of infringing a patent too soon. That consideration will provide enormous scope for legal intervention and delaying tactics.

I am disappointed to hear that the noble Lord, Lord Hacking, feels that he must again cover the ground that was covered by the noble Lord, Lord Northfield, who is still raising the matter of retrospection. We dealt with that at some length in his Bill and it is encouraging to note that the noble Lord, Lord Hacking, admitted the fact that an element of retrospection is contained in his amendments. However, the noble Lord, Lord Northfield, persisted in denying that an element of retrospection existed. I hope that the Government will resist these amendments with full heart.

Lord Lucas of Chilworth

My Lords, by reason of the fact that my name has been enjoined I feel obliged to intervene. I do so particularly because of what was said by the noble Viscount, Lord Craigavon. I found his remarks against the noble Lords, Lord Northfield and Lord Hacking, to be somewhat unseemly. Under the procedures of your Lordships' House they are perfectly entitled to intervene whether or not we have been round the circuit before. Indeed, I have been round this circuit twice—in this Bill, and in a previous Bill, and even before then.

I accept what was said by the noble Lord, Lord Hacking, and the support that he received from my noble friend Lord Jenkin. There exists an element of unjustice. The period of repeal of licence of right has, by chance and misfortune, been dramatically eroded. I believe that there is a moral obligation on the part of the Government to make that erosion as small as possible. They rejected my amendment and gave their reasons for doing so, and I shall return to that matter in a moment. I can see nothing wrong with going along with the amendment of the noble Lord, Lord Hacking, but I must remind him that, subject to correction, he was wrong in the two drugs he named that would be saved if this amendment were accepted, because as far as I am aware it is just one.

Lord Hacking

My Lords, that is correct.

Lord Lucas of Chilworth

My Lords, I am happy about that. The distressing thing to me is that when we last discussed this in Committee the Minister, in responding to my comments with regard to the European Court of Human Rights aspect said: 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 provisions is small and the risk of the United Kingdom being taken to the European Court is correspondingly low".—[Official Report, 13/1/88; col. 1203.]. What is good for the goose is good for the gander and I suggested in the opinion that I put before your Lordships on that occasion and which has been reiterated by both the noble Lords, Lord Hacking and Lord Jenkin, that this expectation is not a property. The Government cannot say on the one hand to your Lordships, "That is a property but that which is circumscribed by Clause 267 is small and we are not running any risks so forget it." That is a monstrous sort of argument to put before your Lordships' House. I hope that the Minister will give further consideration to this matter even at this late stage.

Lord Williams of Elvel

My Lords, it is always a great pleasure having these debates on this particular topic because the same noble Lords seem to pop up from roughly the same Benches and say more or less the same things. As the noble Lord, Lord Lucas, pointed out, we have had this particular debate twice on the Bill introduced by my noble friend Lord Northfield and I believe that this is the second occasion on this Bill.

I have nothing further to add to what I have said on the three previous occasions on which we have discussed this particular topic. I agree with the noble Viscount, Lord Craigavon, that we dislike any retroaction. We do not like that. If one product is caught by what is an apparent unfairness in the Bill as drafted, then I am sorry about that. Life is, I am afraid, rather unfair. We urge the Government to resist this amendment.

4.15 p.m.

Lord Beaverbrook

My Lords, with the leave of the House I shall speak to Amendments Nos. 397B and 397C. These amendments relate to applications made to the comptroller for the settlement of terms of licences. One effect of the amendments would be to extinguish such applications which are still outstanding at the date of commencement of Clauses 266 and 267, if the applicants have not made an investment in anticipation of, and in reliance on, their entitlement to licences before declarations are filed by patent owners. In Committee I explained our view that, where a person has an application before the comptroller to settle the terms of a licence of right, the invalidation of the application would amount to a deprivation of property within the meaning of the European Convention on Human Rights. It would be immaterial whether the applicant had made an investment in anticipation of obtaining a licence.

The noble Lord, Lord Hacking, said that it is most unlikely that the European Court of Human Rights would hold that an application for a licence amounts to property within the meaning of the European Convention. However, I would point out that the Government's legal advisers have examined this matter at length and have both corresponded and met with representatives of the pharmaceutical companies, which have been expressing the view that such an application does not amount to property. We appreciate that there is no direct authority on this point and that there is room for others to take a different view. However, we remain of the view that these amendments would create a serious risk of a case under the European Convention being brought against the Government and we are not prepared to take that risk.

I also say to the noble Lord, Lord Northfield, in responding to his point when he said that some other legislation involves retrospection, that that is quite true, but the difference between that legislation and this is that here we are dealing with a balance of rights between private parties. We are not dealing with the balance between the state and the private individual where it is often the case that it is necessary to establish an overriding public interest. The public interest to which I refer is that set out in Article 1 of the First Protocol to the European Convention on Human Rights.

I also explained in Committee that, 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 a year 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 17th year, that is the licence of right period. It is quite likely that someone wanting a licence of right would make the necessary preparations to work the invention under licence during this year, in parallel with the process of settling terms, rather than prior to making his application. It might even be that a licensee would want to wait and see what the licence terms were before making any preparations to work an invention. The effect of the noble Lord's amendment would be that applicants in either of these situations would have their applications invalidated by a later filed declaration.

I should say to my noble friend Lord Jenkin of Roding that all patents for pharmaceuticals at present have a term of 16 years plus four years' licence of right. The Bill will give such patents 20 years. There is no question that patents will receive only 15 years. All that can happen in the 16th year is that terms of licences of right can be settled in preparation for licences to take effect from the beginning of the 17th year.

For those reasons I must resist both amendments in the name of the noble Lord, Lord Hacking. This is both to avoid the risk of a breach of the European Human Rights Convention and on account of our view that it would be unacceptable to create a situation where prospective licensees must make a very early practical and serious investment if they are to ensure that their applications to settle terms will not be defeated by later filed declarations.

Lord Hacking

My Lords, although your Lordships have debated this matter on earlier occasions, these amendments are fresh to your Lordships in an attempt to have a new look at the problem. Therefore, it is somewhat disappointing that the Minister does not feel able to give further consideration to them. Your Lordships have heard the arguments about them and have heard of the unfairness. To use the words that the noble Lord, Lord Jenkin, used, these proposals by the Government for the abolition of the licence of right would upset "the balance of justice".

In so far as this is a retroactive measure, it is of minimal consequence. It is only taking away an expectation that a patent licence will be granted at the end of the 16th year. It is not taking away from any pharmaceutical company, or otherwise, a licence which has been obtained under the licence of right procedure. It may be put the other way round—as I did to your Lordships in opening—that this Bill is proposing to create a new right, and that is the expectation of a right rather than a right itself.

However, I do not intend to divide the House. The Government have stated their position. I hope that the Minister will read the short debate that your Lordships have had on these amendments and give the matter some further consideration. The matter must rest there.

I should just like to make one other comment. Whether technically the argument presented by myself and the noble Lord, Lord Jenkin, that there would not be an infringement of the European Convention or whether the advice given to the Minister is correct, should not be a deciding factor for the Government. The Government should do what they believe to be right in the circumstances, whether or not there may marginally be infringement under the European Convention. Having made those observations, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 397C not moved.]

Lord Rea moved Amendment No. 397D:

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 or the Medicines Act 1968 for a period of ten years or more.7.").

The noble Lord said: My Lords, this is the same amendment as the one I tabled in Committee. In reply, the noble Lord, Lord Beaverbrook, expressed interest in the idea behind the amendment. Therefore, I was hopeful that the Government would table a broadly similar amendment on Report. However, that has not materialised so I have again brought forward the amendment for further consideration.

I shall take a few minutes to recapitulate the purpose of the amendment for the benefit of noble Lords who were not present in Committee—and I do not blame them because it was about midnight when the amendment was taken. It is also for the benefit of Hansard readers because I have a hunch that this is not the last that will be heard of it. By my rough calculations there are already more than 100 column centimetres about this amendment, if we include discussion of the same amendment when it was moved by my noble friend Lord Stallard in the Patent (Amendment) Bill of the noble Lord, Lord Northfield, which fell in another place at the end of the last Parliament: I almost said that it fell flat on its face, but perhaps that would have been rather rude.

Licences of right, as I think the noble Lord, Lord Hacking, has already described, are only applicable to pharmaceutical products patented before 1978 which were given the windfall of an extra four years' patent life when the European Patents Convention 1978 resulted in the lengthening of British registered patents from 16 to 20 years in order to harmonise with the rest of Europe. Licences of right have enabled manufacturers other than the parent or patent holding firm to produce and market certain products on payment of a licence fee to the patent holder. (Incidentally, I hope I am pronouncing the word "patent" correctly even if sometimes I use the incorrect version). This has resulted in the price of some drugs coming down, and thus reducing their cost to the National Health Service, four years before the expiry of their 20-year patent life.

The Association of the British Pharmaceutical Industry holds that licences of right are unfair for several reasons, but especially— and this has been rehearsed by the noble Lord, Lord Jenkin—because of the often very long period of development between the granting of a patent and obtaining a licence to market the product. For example, figures published in the Pharmaceutical Journal last month show that products entering the United Kingdom market last year had only five years of full protected patent term left. They claim, with some justification perhaps, that that is not enough to recoup the costs of research and development for the drug concerned (and for the many others which turned out to be non-starters).

This amendment would result in licences of right still being abolished, as the Bill intends, for all products until they have had at least 10 years of protected market life. I suggest that that is a reasonable period in which firms could recoup the development costs and make an acceptable profit. Licences of right would continue to be available as at present for products which have had a relatively short patent to marketing period and 10 years or more of protected marketing.

An example in this group is Zantac, the successful drug for the treatment of peptic ulcers; that is, gastric and duodenal ulcer. By the time licences of right become available for Zantac in 1993 the drug will have had 12 years of protected patent life. Sales of the drug are now running at £80 million per annum and have rapidly escalated to this level in recent years.

I think it is important to point out that a major uncertainty of the abolition of licences of right has been the size of the additional cost to the National Health Service that this will incur. The sums vary greatly according to who does the calculation. The ABPI states that it will cost the NHS very little, or nothing, but admits that its members stand to lose considerable sums if licences of right are not abolished; the only gainers being the generic companies. On the other hand, the generic companies say that if licences of right are not abolished the National Health Service stands to save large sums of money—some £40 million to £50 million per annum by 1993. The Henley Centre for Forecasting gives an even larger sum ranging between £50 million and £190 million per annum.

The Government say that the cost will be much smaller than that. One figure given is between £5 million and £8 million between now and 1998—over the next 10 years—when this measure will apply. I believe that this government calculation is a serious underestimate. In fact, I go so far as to say that the Government are being disingenuous and that large sums of money are involved. That is why there has been so much media interest in this amendment.

However, whatever the sums, it is strange that the Government are agreeing to any measure which will increase the drug bill of the NHS, especially at such times as these, even if the Government's smaller estimate applies. A number of wards such as that recently closed in Merthyr Tydfil, which caused Her Majesty the Queen Mother such distress, could still be kept open.

To illustrate the cost involved, let us take the example of the drug Zantac, which I mentioned earlier, and assume that it is still as popular in 1993 as it is now (at the moment it is becoming more and more popular), and netting £80 million per annum for Glaxo. If licences of right become available in 1993 it is reasonable to assume that 25 per cent.—a conservative estimate—of the market (that is, £20 million) would then he taken by the generic firms selling at, say, one-third less than Glaxo's price. They could well sell at a very much lower price. If that is the case, the saving to the NHS would be £6⅔ million per annum on that one product. Although it is a highly successful product it is reasonable to accept that there will be many other products and that the total will be many times that figure. It would be reasonable to suggest a figure of £20 million and probably much more, as the Henley Centre suggested.

Even more might be saved through other means than the one I have suggested, because when licences of right are granted the parent firm will be forced to reduce its prices in order to compete and keep up its share of the market; in other words, bowing to market forces. Therefore, if we, the taxpayers, are to pay this sum to further the research and development of drugs—and that is what the drug firms say it is for—I am strongly of the opinion that it would be far better spent via the University Funding Council (formerly the University Grants Committee) or the Medical Research Council. It is they who fund the fundamental research leading to basic discoveries which enable the pharmaceutical industry to develop new drugs. They provide the science base for the pharmaceutical industry without which it would founder and probably move overseas. As a co-opted member of your Lordships' Science and Technology Committee, I have received evidence that the science base of this country is now seriously underfunded and in need of those millions of pounds which the Government propose to pay to the pharmaceutical industry.

I suggest that the amendment goes a long way towards meeting the argument of the pharmaceutical industry that it needs a reasonable, protected marketing period. At the same time it would also protect the interests of the National Health Service. I beg to move.

4.30 p.m.

Lord Jenkin of Roding

My Lords, I have listened with interest to the arguments of the noble Lord, Lord Rea. I heard, as no doubt others of your Lordships did, some of the arguments on the radio this morning. I have also studied the noble Lord's speech at Committee stage. Having listened to him I do not find his arguments any more persuasive this afternoon than I have on previous occasions.

Perhaps I may take up one of the last points that he made. The noble Lord said that the money would be better spent by paying it to the Medical Research Council or to the universities. I find that to be a quite astonishing proposition when one recognises that we have in this country a research-based pharmaceutical industry which I believe many people regard as being an absolute model of what a science-based industry should do and should be. I am told that it spends huge sums of the order of £800 million a year on research and development.

The British industry is particularly successful in this regard. There are qualities as regards British biochemists, biochemical engineers and microbiologists, which are envied throughout the world. These qualities have resulted in research-based companies from foreign countries setting up research laboratories here. The reason is that this is an industry which has a string of world firsts to its credit. That is of enormous advantage to this country. Its exports are now of the order of £1,700 million per year. This comes at a time when a number of your Lordships have been inclined to criticise the visible trade balance of this country. Here we have an industry with a colossal trade surplus in favour of this country which was of the order of £834 million last year. It is a substantial employer. It employs about 87,000 people. If one then considers the knock-on effect on other industries with which it works it is perhaps another quarter of a million employees directly involved.

This is an industry that depends on confidence; the confidence that it is going to have a climate for intellectual property which is going to encourage it to continue its spending. In particular, it needs to be encouraged that the results of its research and development will be given the protection of the law. It was interesting to hear the noble Lord, Lord Rea, make the point that the average period now for the effective exploitation of a pharmaceutical patent is probably about five years out of the hitherto 16 or 20 years. If one includes the four years of the licence of right, it is still under eight years.

I, too, read the article in the pharmaceutical journal to which the noble Lord referred. He will recognise that this is a period of the exploitation of a pharmaceutical patent which has been steadily falling year by year. It has been falling in every country as the safety procedures become more stringent and the testing takes longer. Furthermore, because we have such high standards of safety in this country, it is actually a shorter period in Britain that it is in either the United States or in the Federal Republic of Germany. In recent years that gap has been widening.

It is for that reason that the research-based pharmaceutical industry welcomed the announcement made in 1986 by the Government that the licence of right provisions provided in the 1977 Act would end. That would allow the firms to have the full 20 years' patent protection which the Community had indicated was appropriate.

I suspect that it is very much in the mind of the Government Front Bench that an identical amendment was moved during the passage of the Bill put forward by the noble Lord, Lord Northfield, before the last election. The amendment was moved by the noble Lord, Lord Stallard; and my noble friend Lord Lucas of Chilworth was quite firm in rejecting it. In a sentence or two he gave very strong and cogent reasons why I believe that this amendment should also be rejected. On 19th March 1987 (at col. 1547 of the Official Report) the noble Lord said: I say to the noble Lord, Lord Stallard, that I fully understand his concern. However, I must indicate that I cannot accept his amendment. I recognise that some pharmaceuticals receive marketing approval long before others and the noble Lord indicated a number of these. However, the Government's decision to remove pharmaceutical patents from the scope of the licences of right provisions of the Patents Act 1977 was based on the average"— I stress the word "average"— increase in time taken to obtain marketing approval since 1977. We must take account of the need to encourage research and development in this important field. The Government have always recognised that profits from medicines entering the market earlier than that average play an important role in financing this. I read the remarks of my noble friend Lord Beaverbrook at Committee stage with some surprise. I have to ask: what has changed since then? If anything the argument is stronger because the average period for effective exploitation of the patent has got shorter.

Perhaps I may interpose at this stage and say that when I was Secretary of State for the Social Services I was responsible for the sponsorship of this industry. I visited a good many of the companies. I was at the receiving end of many of their representations over such matters as the pharmaceutical price regulations scheme. I was never in any doubt whatever that the research which many of these companies carry out is absolutely at the frontiers of scientific knowledge. I say with the greatest respect to the noble Lord, Lord Rea, it is not that they take inventions discovered by the universities and turn them into products. They actually do much of the fundamental research and it is that which needs to be protected.

It is being suggested that this amendment represents a compromise. It is a compromise on what? The point that was made by my noble friend Lord Lucas about the average items of exploitation is still as sound as it ever was. Of course there are some products that have had licensing approval at an earlier stage. The noble Lord, Lord Rea, mentioned the product Zantac. Perhaps I may also mention Capoten produced by a company called Squibb, and also Zovirax, produced by the company called Wellcome. Capoten received its licence in five years although it is extremely restricted. For the first five years of exploitation it was available to very few patients indeed. By the time those restrictions were lifted there was probably fewer than 10 years left.

One can balance that by looking at some of the products which have had very long periods before they were licensed. In this regard I mention another Glaxo product; namely, Trandate, which is a product for high blood pressure. That will become vulnerable, if the amendment is accepted, to a licence of right after six years. Feldene, produced by Pfizer, a product for arthritis, had had only four years of full patent protection. There is the Beecham's product Relifen, again for arthritis, which has just seven years left. One has to ask: where is the balance, fairness and compromise?

There is no proposal in the amendments to extend the patent life for those that have had a very long period before they have been allowed to exploit it. All the noble Lord's amendment seeks to do is to chop off the ones that have had a short period before they received a licence and therefore a longer than average period in which the patent could be enjoyed. I found myself sympathetic to the comment in the Pharmaceutical Journal: what is being proposed is "what-you-lose-on-the-swings-you-lose-on-the-roundabouts". The editorial writer commented: Such a cynical approach hardly seems logical". What are the arguments? The amendment was put forward primarily on the basis of savings to the National Health Service. I really must say to the noble Lord, Lord Rea, that some of the figures he has mentioned are beyond all bounds of possibility. I can only imagine that he has not studied how the PPRS works for drug companies supplying drugs to the National Health Service. If he had he would know that if the company found its prices or its volume reduced so that its profitability on sales to the National Health Service from that product was reduced, it would be entitled to bring that loss into the calculations of its overall profitability from National Health Service products and make it up on others if it could secure the price.

If as a result of this amendment there are licences of right for some of these products, and if that results in reductions in prices—after all, the generic companies want to make profits too—much of that will be clawed back when the calculations are done under the PPRS for the other products. The Government's figure of about £10 million spread over 10 years as the possible cost of the ending of the licence of right is a realistic one. If one balances that against the damage that would be done to the confidence of the industry and of some of those who are contemplating investment here. I consider that that would be a reasonable price to pay.

It has also been suggested—and the noble Lord. Lord Rea, put this forward at the Committee stage—that the industry supported that. I find that very difficult to believe because the effect of the amendment would be a straight transfer of profits from the companies that have spent literally hundreds of millions of pounds on research to the companies that spend practically nothing. I do not know whether the noble Lord's attention has been drawn to a letter in today's Pharmaceutical Journal from David Godfrey, president of the Association of the British Pharmaceutical Industry. I shall quote only two paragraphs: The purpose of this letter is to state unequivocally that this association, which represents companies who account for at least 95 per cent. of sales of branded and generic medicines to the National Health Service, is opposed to the Rea amendment.… The generic manufacturers who are represented by this association—they provide around 90 per cent. of generic sales—accept that their medium and longer term interests are best served by having a strong research based industry in this country. After all, the generics of tomorrow are the innovations of today". With respect, that puts the argument extremely clearly.

One final point must be made. I refer to the impact on the balance of payments. I do not know whether your Lordships know about the recent decision in the European Court of Justice. The court ruled that provisions in the United Kingdom Patents Act under which licences of right are automatically available to United Kingdom manufacturers but not to importers from elsewhere in the Community are incompatible with the rules of competition and free movement of goods in the Treaty of Rome. This means that, contrary to the arguments that were advanced in that case both by the Government and by the industry, all licences of right must permit the importation of patented products from other member states. One can therefore imagine that in regard to states such as Spain where there is substantially less patent protection there would be a considerable erosion of the balance of payments.

I can understand that people will want to look carefully at arguments which suggest that there may be substantial savings to the National Health Service. However, I should like to suggest that on closer examination those arguments do not stand up. I hope that the amendment will be rejected.

4.45 p.m.

Lord Northfield

My Lords, I intervene only briefly because I have spoken to my own Bill on this matter. I intervene only to say to my noble friend that although I have listened to him extremely carefully, he put forward a false prospectus. I heard him say very clearly that the amendment is fair because it makes sure that every drug will have a 10-year life free of licensing. That is what he said today.

However, the amendment does nothing of the kind. The effect of the amendment is to cut off drugs at 10 years. It does nothing to extend the life of drugs which have had a shorter life without licensing. As I read it, my noble friend has lifted the amendment which was moved in March 1987 and has repeated it. As I said at that time to my noble friend Lord Stallard (I hope the noble Lord will forgive me if I quote myself for one minute): Finally, if my noble friend wants to be fair (as I am sure he does) perhaps he can tell me why his amendment does not provide for all patents to have at least 10 years before licences of right are allowed. As drafted, it deprives the ones with longer life but does nothing to help those with a very short patent life before copying is allowed".—[Official Report, 19/3/87;col. 1550.] I hope my noble friend understands that that will be the effect of the amendment which he has moved today.

Lord Williams of Elvel

My Lords, we have been round this course many times and we have all had our say. I have nothing to add to what my noble friend Lord Rea said. At the time of the Committee stage we were hopeful that the Government and the Opposition could reach common ground around the amendment the noble Lord has moved. I hope very much that that will be the case.

The nub of the argument was correctly put by the noble Lord, Lord Jenkin of Roding, who said that when he was Secretary of State he regarded his department as sponsoring the pharmaceutical companies. We regard the role of the department as looking after the National Health Service. There is a fundamental conflict here between the interests of the pharmaceutical companies and the interests of the National Health Service.

We have been consistent in our view that anything that can save the National Health Service money or does not cost the National Health Service more money, particularly in these times, as my noble friend has said, should be supported. It seems to us that if the Government arc prepared to move a little towards us—and we have moved a little away from our total opposition to the abolition of licences of right—here is a compromise that can be agreed between the Government and the Opposition. I hope very much that the Minister will be able to move in our direction.

Lord Hacking

In his argument to your Lordships the noble Lord, Lord Rea, cited the drug Zantac, which is manufactured by Glaxo. I do not quarrel with him about that. I cited two drugs in my argument. My worry concerns the emphasis which the noble Lord, Lord Rea, placed upon that drug in support of his argument. It is right that your Lordships should hear the view of the manufacturer of that drug.

The chairman of Glaxo, Mr. John Burke, recently wrote to me, and having made points about jeopardising research for United Kingdom medicines, penalising enterprise and discrimination against United Kingdom firms and products, Mr. Burke stated: Zantac accounts for 48 per cent. of our sales and has been the force behind our climb to 4th in the world league from 25th in 1982. It provides resources for our expanded research programme costing £150m last year and would allow us, on present plans, to double that figure over the next five years. A new research plant is currently being developed at Stevenage. In 1987 demand for Zantac enabled us to open two new primary production plants at Annan and Montrose—both areas of high unemployment—costing £63m". He then concludes with these words: This amendment is both damaging and inequitable … Selectively denying repeal of licences of right would penalise products such as Zantac whose success is crucial to the funding of future research, but not lead to overall savings. It would discourage innovation, threaten jobs and deny British enterprise the encouragement and protection afforded in other major countries such as Japan and the United States. It is inconceivable that our major trading rivals would inflict such a wound on their domestic industry". My Lords, I need say no more.

Lord Beaverbrook

My Lords, it was indeed late at night when the noble Lord, Lord Rea, moved this same amendment in Committee. I am grateful to him for explaining again the purpose of the amendment. I am also grateful to my noble friend Lord Jenkin of Roding for so fully explaining his case against it.

The amendment distinguishes between drugs with an early entry to the market place and those caught in lengthy stages of development. In Committee the noble Lord, Lord Rea, quoted the case of Zantac, which would have 12 years' protection before becoming open to licences of right. He calculated that his amendment might save the National Health Service some £24 million per annum between 1993 and 1997 by the supply of the generic equivalents of Zantac and other pharmaceutical products. In reply, at that time, I said that we had not had time to consider the implications of the amendment and asked for its withdrawal in order that this might take place.

We recognise that many noble Lords have strong feelings about Clause 266. We have therefore used the time available to examine carefully the problems besetting the pharmaceutical industry over licences of right and our responsibility to ensure that the National Health Service does not, on balance, suffer from the removal of the licence of right provisions for pharmaceutical products.

First, perhaps we could consider research, because in many ways it is the nub of the problem. I hope we are all agreed that we want to see key research carried out in this country, especially where it results in improved treatment, less use of hospital beds and the ability to sell products in overseas markets.

We are not talking about an industry that relies on subsidies and grants, but one which is prepared to stand on its own feet. The Pharmaceutical Price Regulation Scheme, an agreement between the DHSS and the industry, allows as a recoverable cost within the price paid by the NHS for medicines some of the research and development expenditure, but because of the recognised worth of our research scientists many companies spend far more than their allowance, the extra coming from revenue generated by their world-wide trade. The noble Lord, Lord Williams of Elvel, was seeking some form of direction in Committee, that companies benefiting from the abolition of the licence of right provision should spend a certain proportion of the proceeds on research.

The DHSS has never, in the circumstances I have just outlined, made companies spend their income in certain ways, but I can assure your Lordships that the research-based companies' very success depends on their continuing to invest heavily in research and development, and the DHSS will, under the PPRS, encourage companies to walk along this path. Now it is true that some drugs reach the market place early, but others are late. I shall not repeat the quote made by my noble friend Lord Jenkin of Roding in respect of a statement made by my noble friend Lord Lucas of Chilworth at an earlier stage.

There is a very high degree of risk in research and development in this industry and Zantac is a very good illustration of this. I understand that it involved high concentration on a narrow range of possible products, parallel running of various testing stages, foward investment in manufacturing facilities and preparation of marketing in a range of international markets. This positive approach paid off handsomely for the United Kingdom economy as well as for Glaxo, but there was no guarantee of success. To now deter enterprise of this kind would, we suggest, be a retrograde step.

Much has been said and many figures quoted about the savings that would result from this amendment. In Committee the noble Lord, Lord Rea, mentioned £24 million per annum—by Report stage this seems to have risen to £40 million to £50 million per annum—but, of course, we all recognise the difficulties of forecasting the future.

If generic companies were to obtain licences of right for medicines with a substantial sale to the NHS; if they sold at a significantly lower price than the existing branded product; if the level of royalties imposed by the comptroller was lower than those recently decided and if they secured a sizable share of the market from the patent holder's established product, then there would be savings to the NHS. But the figure of £24 million per annum—or, if you like, £40 million to £50 million per annum—assumes a degree of market penetration by generic products and a certain size of discount, whereas the assumptions made by the DHSS have drawn on such limited experience as there has been, to date, of pharmaceuticals sold under licences of right.

The figure also assumes that NHS sales of Zantac and another pharmaceutical, Capoten, will double in value between now and 1993. Both products have enjoyed substantial growth since they came on the market, but the indications are that future growth will be more modest—indeed, the companies producing them will probably have to work hard to improve significantly on their present sales levels. This is because they are both in sectors of the market where new competitors' products are being introduced.

The case of the £24 million savings, now increased to £40 million to £50 million, also rests on an assumption that in each of the four years of licence of right the generic companies would take 40 per cent. of the market away from the established branded products, whose companies would be fighting to retain their market share in any case. We consider such a market share unlikely.

Another factor influencing DHSS estimates is that the regulation of the costs of NHS medicines supplied by research-based companies is done in relation to the overall profit earned by each company from its full range of products. Thus, a company which lost income to generics sold under licences of right would indeed make good at least part of the loss from increasing the price of other products in its range.

The DHSS therefore stands by its modest estimate which I mentioned in Committee—more modest than that put forward by the noble Lord, Lord Rea, of £24 million—that the amendment would save about £2.5 million from the estimated maximum cost of the provisions of the clause to the NHS of £8 million. The Government, having considered all the arguments, are not persuaded and I must therefore resist the amendment of the noble Lord. Lord Rea.

Lord Rea

My Lords, it has been quite an experience to hear such powerful voices from such a powerful industry raised against the amendment, through their spokesmen in this House.

Noble Lords


Lord Beaverbrook

My Lords, I think I should point out that we are now at Report stage.

Lord Hacking

My Lords, I must stress that I am in no way a spokesman for the pharmaceutical industry—if the noble Lord was referring to myself. I am a wholly independent Member of your Lordships House and I speak out of my own independence.

Lord Rea

My Lords, I must apologise to the noble Lord. I think I must have misunderstood the vehemence with which he was defending the industry and that is why I suggested that form of support.

I should like to make one reference to the remarks of the noble Lord, Lord Jenkin of Roding, where he said that the pharmaceutical industry, far from only making drugs based on fundamental research at universities does in fact do its own fundamental research. I fully accept that fact. I do not want, in any way, to diminish that or make any noble Lord feel that the pharmaceutical industry does not do a wonderful job in its research laboratories. I was trying to point out that the pharmaceutical industry and its scientists rest on a strong science base in this country that is university and research council based, and that they are in great need of funding at the moment.

As to the remarks of my noble friend Lord Northfield, I could argue with him over the wording of my amendment. I have just read it again and it seems to say what I wanted to express. Perhaps we can talk about it later. It was certainly the intention that licences of right should be abolished, as the Bill suggests, for all products having less than 10 years of marketing life, if they still have some patent period unexpired; we can discuss that afterwards.

In reply to the noble Lord the Minister, he got me wrong in respect of the amounts of money I calculated. I was considering only the drug Zantac, and if he reads my speech he will see the figure I mentioned was six and two-thirds million pounds per annum saved for that drug alone; calculating that its sales did not increase beyond the level that they are today, and that only 25 per cent. of the market would be taken by the generics firms.

We have had a good debate on this amendment. I am sorry that I have been unable to persuade as many of your Lordships as I had hoped of the justice of this amendment. I am extremely sorry also that the Government do not see fit to support me. At this stage I shall withdraw the amendment, but the discussion surrounding it will continue, and I hope that my withdrawing it now will favour continuation of that discussion. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 397E not moved.]

5 p.m.

Schedule 5 [Patents: minor amendments]:

Lord Beaverbrook moved Amendment No. 398: Page 177, line 27, leave out from ("who") to end of line 31 and insert ("may decide that the substantive examination should not proceed until the fee is paid; and if he so decides, then unless within such period as he may allow—

  1. (a) the fee is paid, or
  2. (b) the application is amended so as to render the supplementary search unnecessary.
he may refuse the application.".").

The noble Lord said: My Lords, this amendment clarifies two aspects of the new provisions on supplementary searches of patent applications. All patent applicants pay a fee for the search of prior publications that the Patent Office must make. Sometimes, after the original search has been made, the applicant alters his application in such a way as to make a supplementary search necessary. If an applicant does that, then clearly the comptroller ought to be able to demand a further fee to cover the extra work involved, and that is what paragraph 4 of Schedule 5 allows.

However, an applicant may not always realise that the alteration he is making will necessitate a supplementary search. In such a case, instead of paying the further fee the applicant may prefer to alter the application again so as to obviate the need for the supplementary search. The present amendment makes clear that such is permissible.

The amendment also provides that if the fee is not paid and the application is not amended, it will take a positive refusal of the application by the comptroller to bring it to an end. We received representations from patent agents that if that protection were not provided, there is a risk applications could be brought to an end before there had been adequate opportunity to resolve the problem. I beg to move.

On Question, amendment agreed to.

The Earl of Stockton moved Amendment No. 398A: Page 177, line 32, leave out sub-paragraph (2).

The noble Earl said: My Lords, in moving this amendment I welcome that just moved by my noble friend the Minister to which your Lordships have agreed. It goes a long way to ameliorating the draconian provisions of the Bill as it came to the Committee, but it does not go quite far enough. The applicant would still have to take the word of the examiner and of the comptroller-general as final. That is palpably unfair.

The right of appeal is a fundamental one and I feel strongly that such matters under the new subsection (1A) of Section 18 of the Patents Act 1977 should be appealable to the Patents Court, which is a part of the High Court and in which applicants have the right of audience in such appellate matters.

In Section 97(3) of the same Act, Parliament recognises that an appeal should lie to the Patents Court and, further, to the Court of Appeal; similarly in Scotland, to the Outer House and then the Inner House of the Court of Session. It is surely wrong for the Government to prevent an applicant from going to even the first of those courts of appeal. I beg to move.

Lord Beaverbrook

My Lords, a dispute over a decision by the comptroller under Section 18(1A) will in practice essentially boil down to a dispute about whether or not a fee for a supplementary search is payable. When drafting the Bill we felt such a dispute did not warrant an appeal procedure. That is in line with the provisions in rule 102 of the Patents Rules 1982 concerning other decisions on the payment of search fees. However, in view of the concerns that my noble friend has expressed, we are willing to accept his amendment so as to allow a right of appeal.

On Question, amendment agreed to.

The Earl of Stockton moved Amendment No. 398B: Page 177, line 36, at end insert—

"Extension of term of patents

. In section 25 of the Patents Act 1977 (term of patent) after subsection 5 insert— (5A) If at any time it appears expedient to the Secretary of State, he may make rules authorising the comptroller or the Patents Court to extend the term of a patent.").

The noble Earl said: My Lords, before moving this amendment I thank my noble friend the Minister for that response. It is unlikely I shall have so much success with this amendment. I return to the question of special pleading that I raised earlier. This amendment suggests a solution to the dilemma in which the Government find themselves, by returning to the procedure that existed for almost a century prior to the 1977 Act.

That proceeded on a patent by patent basis right across the whole spectrum of inventing. The patentee could go to the court with a particular patent for a particular invention and make out a case in detail whereby, through no fault of his own, he had been precluded by identified factors from securing what would have been an adequate measure of remuneration for that patent and for that invention.

I suggest to my noble friend that since it will, we hope, be several years before there is another opportunity to amend our national patent laws, we should avail ourselves of this opportunity to put in place appropriate enabling legislation ready to be triggered after a satisfactory conclusion to international discussions. I beg to move.

Lord Williams of Elvel

My Lords, whereas in the noble Earl's previous amendment I was not prepared to intervene and am happy it was accepted, I must advise him that this amendment will not receive the support of the Opposition. It seems to us to be returning to the laws of the previous century and perhaps even before then. To insert in this Bill something that would change the whole basis of the Patents Act 1977 would be quite incorrect. I hope very much that the Government will resist it.

Lord Northfield

My Lords, before the noble Lord replies I may say that the Government are thought to be sympathetic—indeed, they have shown themselves to be so today—towards the erosion of patent life in respect of pharmaceuticals. I know attempts are being made in Europe to achieve international agreement under the European patents system on extending patent life, at least in the way that Japan and America are doing. Both those countries are sensitive to the problem of erosion of patent life by the years of testing and have agreed to extend it by five years in the case of pharmaceuticals.

I know that the Government are sympathetic to a similar attempt being made in Europe. It would be helpful if the noble Lord, in replying, indicated whether substantial and recognisable steps are being taken in that direction in Europe. If it means altering the European Patent Convention, then I understand it could take up to 10 years because under that convention—which I read for the first time recently—such a change would need the consent of every member state. That would involve a very long period of delay. It would be helpful to have some indication as to whether any interim measures could be taken to parallel in particular that which is being done in Japan and the United States. The case is a strong one and I hope that the Government have something to say about it.

I do not know whether the noble Earl, Lord Stockton, recalls that the Government answered a parliamentary Question on Section 25, which was considered to give rather strong power to alter the impact of starting dates to accommodate problems of testing and, for example, the authorisation of pharmaceuticals.

I am not sure that the amendment is necessary, but I applaud the noble Earl for spotlighting the problem of erosion.

Lord Beaverbrook

My Lords, we are constrained from taking unilateral action to extend patent term by the need to harmonise our patent law with the European Patent Convention. Patents granted under the European Patent Convention can run for a maximum of 20 years from their date of application. If the United Kingdom introduced a longer term this would undermine the European system and would also be contrary to a resolution signed by Community states in 1975, in which the signatories agreed to harmonise national laws. Any amendment of our law to alter the term of patents will therefore have to be accompanied by a corresponding amendment of the convention.

I can tell the noble Lord, Lord Northfield, that such an amendment will be possible only if the other states party to the convention agree. We are discussing the question of extension of patent term with our European partners and are keeping an open mind on the question, but I cannot go any further at this stage.

Even if there is such agreement there is no knowing what form any eventual amendment may take. For example, it could be that the current 20-year term would be extended by the addition of extra years. Another possibility is that the term could be kept at 20 years but its starting date postponed. The amendment, which would enable the Secretary of State to make rules authorising the extension of the patent term, might therefore turn out to be inappropriate. For that reason I must resist it.

I should add that Section 25 of the Patents Act 1977 already includes a provision whereby the starting date of the patent term may be posponed. It might be that this provision would eventually suffice.

The Earl of Stockton

My Lords, I thank the Minister for his assurance that his mind remains open. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Stockton moved Amendment No. 398C: Page 177, line 40, leave out ("15") and insert ("19").

The noble Earl said: My Lords, with the leave of the House, in moving Amendment No. 398C I shall speak also to Amendment No. 398D.

Before the Patents Act 1977 it was possible to apply for the restoration of a patent within three years after its lapsing through an intentional failure to pay renewal fees. The 1977 Act cut that period of three years to one year. That this was too much of a reduction has been recognised by the inclusion in the Bill of a provision replacing the one-year period by a period of 15 months. However, the Government have still failed to grasp the fact that, while the basic period for paying a renewal fee runs out on the anniversary date of the patent, there is a six-month extension of that period open to anyone as of right on payment of a small extra sum for late payment. Amendment No. 398C would modestly extend that 18-month period by one month to 19 months in lieu of the Government's proposal to extend the 12-month period by three months to 15 months. There is little, if any, logic in the 15-month period when the Act permits payment of renewal fees quite legitimately up to the end of the 18-month period. I strongly commend the amendment to the House.

In the event that the amendment does not commend itself to my noble friend the Minster or to the House, Amendment No. 398D provides an alternative approach, which might be more to the Minister's taste. It would leave the period to be prescribed by rules made by the Secretary of State, although I am aware that the noble Lord, Lord Williams of Elvel, is chary of any such extension of powers. It is hoped that the Secretary of State in the first instance would prescribe a period of 18 months. It would then be possible over a period of perhaps three or four years to find out whether this resulted on the one hand in a virtual elimination of the present problem or, on the other hand, in unnecessary and undue inconvenience to third parties. In either event, the Secretary of State could relatively easily change the expiry of the restoration period by order.

Lord Williams of Elvel

My Lords, the noble Earl, Lord Stockton, has correctly divined my attitude towards Amendment No. 398D. I am reluctant that such words as "the prescribed period" should be omitted in the primary legislation, thus permitting the Secretary of State to determine the period that he chooses. As to Amendment No. 398C and the suggestion regarding one month, what is one month between friends? I shall be interested to hear the Minister's reply.

5.15 p.m.

Lord Beaverbrook

My Lords, the length of the restoration period must strike a balance between the interests of patentees who have made a genuine mistake and the interests of third parties who wish to know for certain whether they can freely work an invention. With the leave of the House, I shall speak to Amendment No. 398D also. We accept that the present 12-month period is too short. We had proposed to extend it to 15 months. Subsequently, we have received representations that it should be even longer, perhaps 19 months, as in the first of my noble friend's amendments. We now feel it would be better not to specify the period in the primary legislation at all but to leave it to be provided for in a statutory instrument. I recognise that the noble Lord, Lord Williams of Elvel, is of the view that this is not always the best course, but there are occasions when it is better to have some flexibility.

If any new period set proves in practice to be wrong, either too long or too short, it will be easier to alter. We are happy, therefore, to follow the approach taken in the second of my noble friend's proposals, that is, Amendment No. 398D. We should, however, like time to consider the precise wording in the context of the rest of Section 28 of the Patents Act 1977. In addition, if your Lordships agree to Amendment No. 398D, it will be necessary to make some consequential changes to the transitional provisions in paragraph 5 of Schedule 5. Therefore, if my noble friend would be so kind as to withdraw his amendment, I undertake to return with appropriate government amendments on Third Reading.

I should point out that I cannot at this stage say that when it comes to drafting the relevant secondary legislation we would necessarily change our proposal for a 15-month period, but we shall certainly look at the matter carefully in the light of the arguments that have been advanced today.

The Earl of Stockton

My Lords, I thank the Minister for his assurance. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 398D not moved.]

Lord Beaverbrook moved Amendment No. 399:

Page 178, line 6, at end insert— (".—(1) In section 28 of the Patents Act 1977 (restoration of lapsed patents), in subsection (3), omit paragraph (b) (requirement that failure to renew is due to circumstances beyond proprietor's control) and the word "and" preceding it. (2) The above amendment does not apply to a patent which has ceased to have effect in accordance with section 25(3) of the Patents Act 1977 (failure to renew within prescribed period) and in respect of which the period referred to in subsection (4) of that section (six months period of grace for renewal) has expired before commencement.")

The noble Lord said: My Lords, as Amendments Nos. 399 and 425 are related, with your Lordships' permission I shall speak to them together.

As the Patents Act 1977 stands, if the proprietor of a patent makes a genuine mistake and fails to pay a renewal fee, the patent may be restored only if the proprietor had taken reasonable care to see that the renewal fee was paid and the fee was not paid because of circumstances beyond his control.

As I have explained in connection with the preceding amendments, it would be wrong to make restoration of a lapsed patent too easy, since the interests of third parties may be affected. However, it has become clear as a result of the recent Court of Appeal decision in the Textron case that the present requirements are too stringent. We feel that if the proprietor had taken reasonable care to see that the fee was paid, that should be sufficient. To insist in addition that the mistake should not have been attributable to circumstances under the proprietor's control goes too far. In the Textron case, for example, it prevented restoration simply because the mistake was made by one of the proprietor's employees. The present amendments repeal this additional requirement. I beg to move.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 400: Page 178, line 41, at end insert—

("Undertaking to take licence in infringement proceedings.

. In section 46 of the Patents Act 1977 (licences of right), after subsection (3) insert— (3A) An undertaking under subsection (3)(c) above may be given at any time before final order in the proceedings, without any admission of liability.".").

The noble Lord said: My Lords, I have already spoken to the amendment. I beg to move.

On Queston, amendment agreed to.

The Earl of Stockton moved Amendment No. 400ZA: Page 179, line 5, at end insert—

("Comptroller's power to revoke a patent

In section 73(2) of the Patents Act 1977 (comptroller's power to revoke a patent) add at the end— providing that in exercising his discretion under this Section the comptroller shall take into account—

  1. (i) any offer by the proprietor of the patent to surrender his European patent (U.K.) and
  2. (ii) in a case where the European patent (U.K.) has been revoked, the possibility that a claim or claims of the patent granted under this Act may be capable of being sustained." ").

The noble Earl said: My Lords, I beg leave to move the amendment standing in my name on the Marshalled List. For entirely legitimate reasons (albeit often sometimes rather technical ones) an inventor or someone else such as a company having occasion to seek to protect an invention in this country by patenting it, may have occasion to proceed simultaneously by two routes.

While seeking an ordinary United Kingdom patent through our national Patent Office, a patent application having the same priority date may be pursued through the European Patent Office for a bundle of patents covering several designated member states including the United Kingdom.

Such a person or company may end up with two patents, a UK patent and a European patent (UK), something dubbed by those having the doubtful fortune of practising in these matters as "double patenting". Such double patenting of one and the same invention must not he allowed to persist. The machinery to prevent double patenting is found in Section 73(2) of the Patents Act 1977 by which the Comptroller-General of Patents is given power to solve the problem.

Unfortunately, he is only given the power to solve it in one way. It has to be the UK patent that is the national patent that is revoked even if the European patent (U.K.) has already been revoked by an opposition procedure instituted centrally by a third party.

However, for legitimate albeit again technical reasons the proprietor of the invention may prefer that his UK patent should be the survivor. I understand from discussions that have taken place within the past week between officials of my noble friend's department and representatives of the Chartered Institute of Patent Agents that my noble friend may be sympathetic towards the general aims of this amendment but that he may find technical difficulty with the details.

My amendment seeks to introduce an element of flexibility and would open up the possibility of the patent owner opting to save his national patent by surrendering his European patent (UK). I gather that it may be thought that some difficulty might stem from any surrender of the European patent (UK) not being retrospective in its effect to the time that the patent was granted. Perhaps my noble friend could clarify for the House why that should be a cause of difficulty providing the proprietor does indeed effect surrender as my amendment would permit.

I further understand that my noble friend may find technical difficulty with my amendment based on considerations related to the Community Patent Convention which is not yet in force, which may not come into force for some years yet and which is not to be confused with the European Patent Convention. I am not at all clear as to the nature of the difficulty that my noble friend may have particularly as Section 86(4) of the Patents Act 1977 expressly disapplies Section 73(2) of that Act to Community patents and to applications for European patents which are treated under the Community Patent Convention as applications for Community patents. Without doubt Section 86 of the Patents Act 1977 would be brought into full force and effect as soon as the Community Patent Convention became operative in relation to this country.

I realise that this is a very intricate area and it is not altogether beyond the bounds of possibility that my noble friend may be able to satisfy me that there is at least a prima facie possibility of there being some technical defect in my own approach. I beg to move.

Lord Williams of Elvel

My Lords, I believe that the noble Earl, Lord Stockton, has a very important point here which I hope that the Minister will attend to. As the noble Earl says, the matter is extremely technical. I am not a patent lawyer—I must say here that I miss very much the presence of the noble Lord, Lord Lloyd of Kilgerran, or indeed of any noble Lord on the Alliance Benches— but I do believe that the amendment of the noble Earl might be taken quite seriously by the Minister when he comes to reply.

Lord Beaverbrook

My Lords, I agree with the noble Lord, Lord Williams of Elvel, that we do indeed miss the noble Lord's presence from what we used to call the Alliance Benches. I am not sure whose they are at the moment. They appear to belong to the noble Lord, Lord Pitt of Hampstead, at the moment.

I should like first to refer to paragraph (i) of this amendment. We do indeed have some sympathy with what my noble friend has said, but we do not feel the present amendment is a satisfactory way to solve the problem. Until the European patent (UK) is actually surrendered, there will be two patents in force for the same invention and this seems to us to be undesirable. Surrender of a patent, it must be remembered, does not take effect retrospectively.

We have ourselves examined a number of possible ways of solving the problem which my noble friend has outlined, but have not yet come up with one that is entirely satisfactory. Nevertheless, if my noble friend will agree to withdraw his amendment, we shall examine the matter carefully again to see if we can find a satisfactory solution.

I should now like to turn to paragraph (ii) of this amendment. My initial reaction is that this paragraph does not seem necessary. If the European patent (UK) is revoked by the European Patent Office, Section 73(2) of the Patents Act 1977 never comes into play in the first place. This is clear from Section 73(3). Thus paragraph (ii) would appear not to have any effect.

Section 29 of the Patents Act prescribes that surrender is not retrospective. So surrender of a European patent (UK) will not avoid a period during which two patents are in force for the same invention. This is indeed a complicated and difficult area and I shall bring forward amendments I hope at a later stage. I cannot guarantee that that will necessarily be for Third Reading but I hope my noble friend will feel able to withdraw his amendment so that we can give this matter further consideration.

The Earl of Stockton

My Lords, I thank my noble friend for those assurances. I am pleased to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Callaghan of Cardiff moved Amendment No. 400A. After Schedule 5, insert the following new schedule:



1.—(1) in this Schedule—

(2) Expressions used in this Schedule which are defined for the purposes of Part I of this Act (copyright) have the same meaning as in that Part.

Entitlement to royalty

2.—(1) The trustees are entitled, subject to the following provisions of this Schedule, to a royalty in respect of any public performance, commercial publication, broadcasting or inclusion in a cable programme service of the whole or any substantial part of the work or an adaptation of it.

(2) Where the trustees are or would be entitled to a royalty, another form of remuneration may be agreed.


3. No royalty is payable in respect of—

  1. (a) anything which immediately before copyright in the work expired on 31st December 1987 could lawfully have been done without the licence, or further licence, of the trustees as copyright owners; or
  2. (b) anything which if copyright still subsisted in the work could, by virtue of any provision of Chapter III of Part I of this Act (acts permitted notwithstanding copyright) other than section 61 (effect of expiry of copyright in film or film soundtrack), be done without infringing copyright.


4. No royalty is payable in respect of anything done in pursuance of arrangements made before the passing of this Act.

Procedure for determining amount payable

5.—(1) In default of agreement application may be made to the Copyright Tribunal which shall consider the matter and make such order regarding the royalty or other remuneration to be paid as it may determine to be reasonable in the circumstances.

(2) Application may subsequently be made to the Tribunal to vary its order, and the Tribunal shall consider the matter and make such order confirming or varying the original order as it may determine to be reasonable in the circumstances.

(3) An application for variation shall not, except with the special leave of the Tribunal, be made within twelve months from the date of the original order or of the order on a previous application for variation.

(4) A variation order has effect from the date on which it is made or such later date as may be specified by the Tribunal.

Sums received to be held on trust

6. The sums received by the trustees by virtue of this Schedule, after deduction of any relevant expenses, shall be held by them on trust for the purposes of the Hospital.

Right only for the benefit of the Hospital

7.—(1) The right of the trustees under this Schedule may not be assigned and shall cease if the trustees purport to assign or charge it.

(2) The right may not be the subject of an order under section 92 of the National Health Act 1977 (transfers of trust property by order of the Secretary of State) and shall cease if the Hospital ceases to have a separate identity or ceases to have purposes which include the care of sick children.

(3) Any power of Her Majesty, the court (within the meaning of the Charities Act 1960) or any other person to alter the trusts of a charity is not exercisable in relation to the trust created by this Schedule.").

The noble Lord said: My Lords, I beg to move that a new schedule be inserted in the Bill after Schedule 5 in the terms of Amendment No. 400A. I hope that it will be for the convenience of your Lordships if I speak to Amendments Nos. 409D, 409E and 426 at the same time.

Your Lordships will be aware of the munificent gift of Sir James Barrie many years ago to Great Ormond Street Hospital for Sick Children for which he had a special care and a great admiration. He bequeathed the copyright of his works to the hospital and since that time in 1929 the hospital has received a modest but significant sum each year in respect of performances of the play or publications of the book. Although I would never claim that the amount that the hospital receives each year bears any relationship to its total expenditure, nevertheless it has been a significant sum and it has enabled the special trustees who care for such sums to make provision for additional comforts for the children of that hospital and indeed for the nursing and other staff.

I am sure that it is known to your Lordships that that hospital has an international as well as a national reputation. Not only do children come to the hospital from pretty well every town and village in Britain—it would hardly be possible to go to any town or village without finding somebody who had been treated with the specialist expertise of Great Ormond Street—but it also has a great international reputation. The hospital is frequently asked to take children from overseas in order that our expertise should be made available to those children.

That copyright which Sir James Barrie bequeathed expired in the due course of events on 31st December 1987. Since then a number of theatre managers and others have been good enough to indicate that they would like to continue to make voluntary payments to the hospital in respect of the royalties that the hospital will have lost. The hospital is extremely grateful for what has been said to it in that regard.

But it occurred to me and to some others (to whom I am very grateful for their assistance) that, with your Lordships' permission, perhaps we might try to go a little further. This new schedule would not revive the copyright. That would certainly not be the intention, the purpose or the effect of it. However, it would enable Great Ormond Street to continue to receive the royalties that have been paid under the copyright. But of course any right that the hospital used to have to refuse permission in connection with the work—I think that it was hardly ever refused—disappears and will continue to disappear. Nevertheless, the hospital will continue to receive royalties which, as your Lordships may know, are negotiated between the hospital and those who perform the play or who publish books from time to time. The purpose of the schedule is to provide for that to continue. I hope that that meets with your Lordships' approval. I am grateful for the support which I have had from noble Lords on all sides of the House. I know that the hospital appreciates what has been done.

Does the provision create a precedent? I think that the answer is probably: yes. Something similar was done at the end of 17th century, although I believe that the remuneration from the copyright then granted to universities brings in very few pence now. I must confess that there is something of a precedent here. However, if Parliament decides to create a precedent once every 300 years, I doubt that it will be argued that the pillars of the Constitution are being torn down. I therefore hope that your Lordships will agree the amendment.

The schedule provides that, in any dispute that might arise between the trustees of the hospital and anyone putting on a performance in default of an agreement, application may be made to the Copyright Tribunal. That right has existed so far, and I think that it will be an indication to your Lordships of the way in which the hospital conducts its affairs that at no time within my knowledge has any application had to be made to the tribunal because of a disagreement.

This well-established practice has been running for 50 years. I doubt very much whether any parent—or perhaps, in your Lordships' House, any grandparent—who takes children to see a performance of Peter Pan would begrudge the odd ha'penny added to the admission price of the ticket if he or she knew that it was going to the Great Ormond Street Hospital. I beg to move.

Lord Allen of Abbeydale

My Lords, having put my name on the amendment, perhaps I may say a few words in support of it. The continuing needs of that splendid hospital, both for capital and for income, are well known. There could hardly have been a worse moment for cutting off, after all these years, the modest but steady income which has come in from the Peter Pan copyright entitlement.

The proposal embodied in the amendment has received some criticism and authorities as diverse as the American constitution and the Treaty of Rome have been invoked in opposition. Much of that criticism was based on the misapprehension that what was proposed was a revival of the copyright and its maintenance in perpetuity. As the noble Lord, Lord Callaghan, has just explained, that is not the intention. The idea is to entitle the hospital trustees to royalties from future performances, adaptations and—to show how up to date we are—cable programme services. That prospect, incidentally, fills me with gloom.

The noble Lord referred to suggestions that that might be regarded as a precedent. I think that I should put the answer to that suggestion just a little differently. It seems to me that if, sometime in the future, a hospital with the merits of this particular hospital receives steady income over many years from a play which has gone on with undiminished vigour for an indefinite period, there is a possibility of the provision being repeated. But that combination of circumstances seems to me to be highly unlikely to arise, at any rate for a century or two.

I think that this is an imaginative proposal which provides what, in practice, is a unique solution to a unique problem. I have no doubt that some of the lawyers in your Lordship's House may have slight qualms about it. That is their privilege. I think that the ordinary man in the street will think that it is a jolly good idea. I very much hope that the House will approve the amendment and the accompanying retinue of consequential amendments set out on the Marshalled List.

Lord Lucas of Chilworth

My Lords, I intervene with some diffidence in the debate. I am grateful to the noble Lords, Lord Callaghan and Lord Allen of Abbeydale, for explaining how they foresee the principle of the precedent. I am not averse to the creation of precedents if they are right and proper. However, I ask myself whether I am totally satisfied that this is the right basis and the right time to create a precedent. If my answer is "No" I shall take a certain course of action later in the debate. However, I am far more likely to say "Yes". But I should like the House to be in no doubt as to exactly what it is doing.

When my noble Lord, Lord Allen, says: 'I doubt whether a similar set of circumstances will arise", he refers to a particular product and a particular establishment. I use those words very carefully. I do not wish to suggest that another product and another establishment has a better, greater or lesser claim. What I suggest is that, in this fast-moving technological age where we as a society are asked to be more Christian, more forbearing and more supportive of those who are less fortunate, we may well be asked, not in 300 years or 30 years, but perhaps in three years, to approve something similar. I do not object to that at all.

However, I ask myself and I ask your Lordships exactly where are we going. The road to hell is paved with good intentions, and splendid intentions are contained in this series of amendments. But where exactly is it all leading? We must ask questions as to which product, what establishment, for what reason and under what circumstances we are proceeding. If your Lordships are prepared to meet that challenge, then of course your Lordships will say to me: "You have wasted the time of the House".

A noble Lord

Hear, hear!

Lord Lucas of Chilworth

Someone says "Hear, hear". However, I think this has to be said because we have to be reminded of what is across the horizon. The noble Lord, Lord Callaghan, has shown us a way in which support can be given. Others may wish to emulate him.

Lord Charteris of Amisfield

My Lords, I rise to support the amendment not simply because Captain Hook was an Old Etonian—and he was!—but for a slightly more personal reason. I suspect that I and my brother, the noble Earl, Lord Wemyss, who is not present this afternoon, may be the only two members of your Lordships' House who, in company with their grandfather and six other children, had two plays especially written for them to act in by James Barrie. Not only did he write the plays for us; he also rehearsed us personally. I can tell your Lordships that it was a most terrifying and awe-inspiring experience. However, in spite of being a frightening man, he was a great lover of children and I know from what I remember of him that if he had realised what was going to happen he would have been absolutely fascinated and delighted by it. It is for that reason that I hope your Lordships will support the amendment, which is extremely imaginative. It is right that the work of James Barrie, which has given so much pleasure to children for so many years, should continue to bring comfort to those who are in trouble.

Lord Broxbourne

My Lords, I rise to support this amendment—

Noble Lords


Lord Willis

My Lords, many years ago in America, during the McCarthy regime, it was customary and in fact necessary for a speaker to get up and say, "I want to assure my audience that I hate Stalin, I hate Russia, I hate everything to do with Communism, but I do think that our rates are too high". I have to say that I like the noble Lord. Lord Callaghan, but I think that his amendment is wrong. I looked at it in wonder when I read it. I thought to myself, "How great is the power of ex-Prime Ministers; the song is ended, but the memory lingers on".

Nobody in this House or outside it can exceed me in my desire to help sick children or the hospital. But what are we proposing in this amendment? We are asking the theatre to subsidise the National Health Service. A theatre puts on a production of Peter Pan and the money goes to the stricken hospital at Great Ormond Street. Where are we going down that path? There are many very good children's charities, and there are very many good authors who have left legacies in their will to particular charities. I do not think that it is any part of the theatre's job to subsidise hospitals in any way. I think that it is totally wrong.

If the producer of Peter Pan, or any of its developments, decides voluntarily to give a donation to honour Sir James Barrie's memory, that is fine by me. I do not object to that, and I think that he probably should do that. But I think that it is totally wrong to make it compulsory. Like the noble Lord, Lord Lucas, I am not opposed to precedents, but the amendment opens a very strange precedent. I think that if we follow that precedent we will find ourselves in very strange Indian country.

I would remind the noble Lord, Lord Callaghan, that when he was in government we came to him with a proposal that something like 1 per cent. or a half of 1 per cent. royalty should be charged on all plays that were out of copyright—Shakespeare, Sheridan, Shaw, right the way through—and that the money should be Given to the Arts Council. The Arts Council would not then need anything more; it would have enough money to subsidise any arts activities in this country. Unfortunately, his government decided that that was not feasible or that it was wrong. I do not blame him for that; everyone has to make decisions. But if we were to follow through logically the line of this amendment that is what we should do. I should be happy with that.

There are very many children's charities just as deserving as the Hospital for Sick Children; there are many other hospitals and causes which could be supported. I am opposed to this amendment, not because I am opposed to the Hospital for Sick Children but because I think that the principle is wrong. The theatre should not be asked to subsidise the National Health Service. That is the end of the matter so far as I am concerned.

Lord Ardwick

My Lords, before my noble friend sits down perhaps I may ask him a question which is rather more personal than we are used to in this Chamber. Was he one of those cynical little boys who during the performance of Peter Pan refused to clap and so proclaim his belief in fairies and would have allowed poor Tinkerbell to expire? That is what he is doing this afternoon.

Lord Willis

My Lords, I must tell my noble friend that one of my greatest friends was Tinkerbell.

5.45 p.m.

Lord Broxbourne

My Lords, perhaps I may begin by expressing my apologies to the noble Lord, Lord Willis. I did not observe him rising and I hope that he will acquit me of any discourtesy.

Unlike the noble Lord, I rise to support this admirable amendment. I fully appreciate that it has no need of support from me. Its merits speak for themselves and have been reinforced by the eloquent exposés of the noble Lords, Lord Callaghan and Lord Allen of Abbeydale, with all their great distinction and authority. It is an amendment about a well loved play by a very highly respected and honoured author, and in aid of a hospital which does good work and which we all hold in great respect, veneration and affection.

At this point noble Lords may ask why I continue. I shall make it clear. There is one short and relatively simple point to which considerable reference has been made. The noble Lord, Lord Callaghan, in moving the amendment said that some people, and he referred to lawyers (I make no apology for being a lawyer), may have qualms on the subject of precedent. He will be happy to know that they need not have qualms. If they have qualms, as the noble Lord, Lord Lucas has, it is unnecessary. The matter was put in its proper perspective by Bacon in his great essays, which have not only endured but gained in authority over three and a half centuries. He said: Set it down to thyself, as well to create good precedents, as to follow them". That wise counsel by that great master is particularly applicable to Parliaments. The constitutional principle is that there is a difference in the role and authority of precedents between legislative assemblies and the judiciary. It is the task of the judiciary to follow a precedent, interpreting it and refining it as it is applied. On the other hand, it is the task of parliaments to create good precedents. That is the justification for this amendment in so far as it is a precedent. As the noble Lord, Lord Callaghan, has made clear, it is not wholly a precedent; even if it were it would gain exemption on the Baconian principle.

I rose only to make that point in regard to precedent and to reiterate my support for this admirable amendment so eloquently and persuasively moved by the noble Lord, Lord Callaghan.

Baroness Strange

My Lords, J. M. Barrie once wrote that: When the first baby laughed for the first time, the laugh broke into a thousand pieces and they all went skipping about, and that was the beginning of fairies". On that basis, if on no other, we must all believe in fairies.

It may come as a surprise to your Lordships that I have seen a fairy. She was a tooth fairy and she bore a remarkable resemblance to my noble relative, my mother. From time to time my children have also seen this same fairy, but they thought that she rather resembled me.

Fairies come in many guises, not only in tinsel dresses and with gauze wings. At all events they are little people who grant wishes and do good deeds around the world. We can do no greater good or give more lasting happiness than by accepting this amendment that has been put forward by the noble Lord, Lord Callaghan, so that the money from Peter Pan, J. M. Barrie's own play about fairies, can go for ever to the sick children of the Great Ormond Street Hospital, and in future ensure that every time one of those children laughs more fairies are born to create more joy in the world.

Lord Boyd-Carpenter

My Lords, the only problem that arises on this amendment is one of precedent. I am inclined to share the view, which has already been expressed, that one can pay too much attention to the risk of creating a precedent. Indeed, noble Lords may remember how amusingly this matter was dealt with by the late Alan Herbert in his delightful book Misleading Cases, in which he makes one of his judges utter the words, Nothing is a precedent until it is done for the first time". Despite the problem of precedent, I am in favour of this amendment since I believe that it has real merit. It is of course unnecessary to say that the Great Ormond Street Hospital is one of the great hospitals of the world. It does a wonderful job. There must be very few noble Lords who do not have kinsmen or more distant relatives who have not benefited from its quite remarkable services. Without entering the realm of fairies, it may nonetheless occur to your Lordships that there may be something particularly appropriate in a play about a boy who never grew up helping to finance work which enables other children to grow up into healthy young people. I think that it would be perfectly proper for your Lordships to pass this amendment. It would pay a fitting tribute to a very great hospital and, if I may be allowed to say so, also to the splendid work done for that hospital by Lady Callaghan, whose efforts as many of us know, have been quite superb. I very much hope that my noble friend the Minister will agree to accept this amendment.

Lord Jenkin of Roding

My Lords, I want to add only one point to what has already been said regarding the consequences that may flow from accepting this amendment. I was a little surprised to learn that in all the 50 years of this copyright there has never been a film of Peter Pan made with live actors. A Walt Disney animated film was made in 1952 and a musical was produced with the actress Mary Martin, but I know that those who advise the special trustees have met with a number of false starts when trying to get a film made. The American copyright has another 16 years to run.

This amendment has been supported most eloquently from all sides of the House, and if it is accepted it means that we shall be giving the Great Ormond Street Hospital the opportunity to benefit from something which every author in this century has regarded as the ultimate goal—Eldorado—namely, a successful film of his work. I think that that would be of enormous advantage.

Anyone who saw the television film presented around Christmas time by Martyn Lewis depicting what happens at Great Ormond Street Hospital cannot but have been enormously impressed by the quality of care, the skill and dedication shown there. When I was Secretary of State I was able to retain the special trustees and keep the hospital as a special hospital, which I believe was the right thing to do, though I know that others had a different viewpoint. We should be striking a blow for that hospital if we continue to support something that has been of great advantage to it through the royalties that have come to it in the past. It might in fact be an awfully big adventure. I think it is one that we should embark on.

Baroness Llewelyn-Davies of Hastoe

My Lords, I intervene for a moment only because I had the privilege of serving for many years on the board of governors of Great Ormond Street Hospital and eventually was chairman of the board. I saw for myself the devotion and inspired work that were present all the time. The brilliance of the medical and surgical teams there is internationally famous. The devotion not only of the nursing staff but also of all the other staff down to the porters and the people who stoke the boilers in the basement is evident; they all think of the sick children all the time.

What has not been mentioned today is the research work that is continuously being undertaken there and which is of vital importance to sick children all over the world. The hospital needs the money very badly and I very much hope that the amendments proposed by my noble friend will be accepted by the House today.

Lord Williams of Elvel

My Lords, my name appears as the fourth name on this amendment, which signifies in the usual manner that it has the support of the Opposition Front Bench. In winding up for what I shall call our side, I should like to thank the many noble Lords, and those from the Benches opposite in particular, who have spoken in very moving terms about the hospital and have supported this amendment. The noble Lord, Lord Boyd-Carpenter, was particularly right to mention the work done for the hospital by Lady Callaghan. We hope and trust that that work will continue with the same enthusiasm and dedication that she has brought to it hitherto.

A number of noble Lords spoke about the question of precedent and I thought that the noble Lord, Lord Broxbourne, dealt with it very easily, as did the noble Lord, Lord Boyd-Carpenter. However, I must say to the noble Lord, Lord Lucas of Chilworth, that we are not dealing with the road to Hell but with the road to Great Ormond Street. The road to Great Ormond Street is paved with the good wishes of all those who have seen children treated in the Hospital for Sick Children. That is the basis of this amendment.

My noble friend Lord Willis, who has his individual opinions to which he is entitled, was trying to extend the precedent elsewhere. Having granted that there may be a precedent created by the proposed amendment, he sought to remind my noble friend Lord Callaghan that he made several suggestions when the noble Lord, Lord Callaghan, was Prime Minister in an attempt to extend precedent.

In this case we have a unique situation. I agree with the noble Lord, Lord Allen of Abbeydale. I do not believe that these conditions are likely to be repeated—certainly not in the near future and arguably not at all. I can assure the Government that the amendment has the support of my party. Having spoken to my colleagues in another place I understand that they will give it a fair wind there. We hope that there will be no problem and that the amendment which has been moved so eloquently by my noble friend will be accepted, will become part of the law of the land and that the hospital itself will benefit accordingly.

6 p.m.

Lord Beaverbrook

My Lords, on behalf of the Government, I also welcome the amendments in this grouping standing in the names of the noble Lords, Lord Callaghan of Cardiff, Lord Allen of Abbeydale, Lord Joseph and Lord Williams of Elvel. The noble Lord, Lord Callaghan, and other noble Lords who have spoken, have all eloquently expressed the admiration and respect which the nation has for the Great Ormond Street Hospital.

As the noble Lord, Lord Callaghan, reminded us, James Barrie bequeathed rights in his play Peter Pan to the hospital. According to Barrie, "All children, except one, grow up", and that one who never grows up has been delighting children of all ages since 1904 and, as a result of Barrie's generous gift, providing very real practical help to sick children for the last 60 years. While Peter Pan will doubtless continue to enchant children—and their parents—for all time, the practical benefits emanating from the timeless classic dried up on 31st December 1987 when the copyright expired. The intent behind these amendments is to ensure that the children in Great Ormond Street Hospital can continue to enjoy the tangible benefits provided by Peter Pan for as long as we and generations to come enjoy the story of the boy who never grew up.

To achieve this result, which I am sure your Lordships will agree is most desirable, it is necessary to revive, at least partially, the copyright which expired just over two months ago. It is apparent that Sir James Barrie did not simply assign or bequeath the whole copyright to Great Ormond Street Hospital and so not all the copyright needs to be revived. Moreover, I think it would be wrong to revive the exclusive rights conferred by copyright when the hospital's sole concern is a restitution of licence income. These amendments only provide a right to a royalty or other remuneration; they do not give the hospital a right to prohibit exploitation of the work. That, I think, is the right balance.

These amendments provide an entitlement in perpetuity to a royalty or other remuneration in respect of commercial publication, public performance, broadcast or inclusion in a cable programme service of Peter Pan or any adaptation of it. In line with the essence of Barrie's bequest, all payments received must be held on trust for the purposes of the hospital.

The new schedule provides that this right is inalienable. Moreover, if for any reason Great Ormond Street Hospital were in some way to lose its separate identity, or no longer to have responsibility for the care of sick children, this entitlement would cease. The schedule also contains provisions safeguarding the position of those who have made arrangements to exploit Peter Pan before this Bill comes into force. It also provides for Copyright Tribunal jurisdiction over disputes concerning the amount of royalty or other remuneration.

I believe that these amendments provide just what is needed. No one can be prevented from exploiting Peter Pan since the work is now in the public domain. A royalty will, however, be payable in respect of certain uses in the United Kingdom which must be applied to a very specific purpose—the care of sick children in Great Ormond Street Hospital.

Your Lordships will be aware that, elsewhere in this Bill, we are repealing perpetual copyrights conferred by the Copyright Act 1775. In that context, it may seem anomalous that we should accept these amendments. As I have indicated, these amendments do not relate to full copyright, but in so far as these amendments provide a perpetual copyright in contradiction of our overall policy, I have to say that I believe this one exception is justified. It must not be seen as a precedent for reviving or extending any other copyright.

This is an exception to our general policy which I believe it is right to make because of the unique circumstances. I am sure that the noble Lord, Lord Callaghan, and others who have spoken in support of these amendments will recognise that this is a special case meriting special treatment. There can be no others. Even if a precedent were to be created, I think that in order to comply with that precedent any future mover of such a proposal must first become Prime Minister of the country.

It is only Peter Pan who never grows up and it is only rights in Peter Pan that we are prepared to see continue indefinitely because of the special place which both the work and its beneficiary, Great Ormond Street Hospital, have in the nation's affections.

My noble friend Lord Jenkin of Roding mentioned the matter of making a film of Peter Pan with live actors. Paragraph 3(a) of the new schedule excludes from the new royalty right anything which was beyond the scope of the copyright enjoyed by Great Ormond Street Hospital at its expiry at the end of last year. That unfortunately includes the rights —which Great Ormond Street Hospital did not enjoy— in the Walt Disney cartoon film. If, however, a new film, whether with live actors or cartoon film, were made, the royalty provided for in these amendments will be payable on every public perfomance of the film in this country.

At the end of the Peter Pan story we learn of Wendy growing up and having children and grandchildren. Peter Pan returns to each generation. As in the story, so in life, Peter Pan comes fresh to each new generation as a story of irresistible charm. As a result of these amendments, the lives of sick children will be made a little lighter and that benefit can go on indefinitely, or, to quote James Barrie, for, so long as children are gay and innocent and heartless".

Lord Callaghan of Cardiff

My Lords, I was going to say that I am overcome, but I am deeply grateful. Great Ormond Street Hospital is waiting for me to telephone the result of this debate. It will receive it with tremendous satisfaction, knowing that the Government have accepted the amendment.

I do not dismiss what the noble Lords, Lord Lucas and Lord Willis, said about this matter. It is a matter that we must clearly take into account. I thought about that issue when I suggested this amendment. I do not dismiss what has been said. However, I hope that my noble friend Lord Willis will think a little more about this. He said twice that this is asking the theatre to subsidise the National Health Service, and that the theatre will be paying for this. It will be the theatregoer who will pay. It will be perhaps a halfpenny or something like that on the price of an admission ticket. I do not believe that anyone will begrudge that. It will certainly not harm the theatres because they have been paying this for the past 50 or 60 years. I trust that my noble friend will reconsider the matter.

To be reinforced by the formidable legal authority of the noble Lords, Lord Broxbourne and Lord Boyd-Carpenter, is a great comfort to me. I shall rest more comfortably tonight knowing that that is so.

I must thank the Government very warmly indeed. I know that I can say this now that the Government have indicated that they are willing to accept it. I approached the noble Lord, Lord Young, about this matter some time ago. He immediately received it with sympathy and understanding and turned his officials on to it. With the encouragement of the noble Lord, Lord Beaverbrook, they and not I (if I may let noble Lords into a secret) produced this amendment. It is therefore really their amendment. I came here fairly confident this afternoon that at least it would not be dismissed on the grounds that it was imperfectly drafted. However, I am deeply grateful for what has been said. I suppose that the noble Lord, Lord Charteris, must be the only Member of this House who has the fortune, at this late stage, to have known Sir James Barrie personally.

Lord Hailsham of Saint Marylebone

My Lords, I knew him quite well.

Lord Callaghan of Cardiff

My Lords, I might have known that the former Lord Chancellor knew him well! Perhaps I had better be careful what I say. I am not sure that he has been produced in a play that has been written specially for him by Sir James Barrie. At least let us give that distinction to the noble Lord, Lord Charteris. It accounts for a great deal in his character that I have come to like and admire in the years since.

I must also thank my noble friend Lord Williams of Elvel, who has done a tremendous amount of work in guiding my faltering and novice footsteps through the thickets of procedure in the House of Lords, as well as in many other ways. I have had good fortune in the fact that the first amendment I have moved in your Lordships' House has been accepted. I can only assume that it is beginner's luck and that I am never likely to have it again.

On Question, amendment agreed to.

Clause 269 [Offence of fraudulently receiving programmes]:

Lord Beaverbrook moved Amendment No. 401: Page 122, line 14, alter ("director,") insert ("manager,").

The noble Lord said: My Lords, I have spoken to this amendment. I beg to move.

On Question, amendment agreed to.

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

Lord Beaverbrook moved Amendment No. 402: Page 123, line 20, leave out ("section is") and insert ("sections are").

The noble Lord said: My Lords, with the leave of your Lordships I propose to speak to Amendments Nos. 402, 404, 406, 407, 408 and 409 together. These amendments are in fulfilment of undertakings given by the Government at the Committee stage of the Bill.

Clause 272 deals with what is commonly known as product counterfeiting; that is to say, trade mark infringement involving deliberate deception. Industry has been pressing for some time for the law on counterfeiting to be tightened up, and Clause 272 reflects the Government's decision to take strong action against this pernicious activity. When the Bill was published, the clause was generally welcomed, although industry, through the anti-counterfeiting group made certain detailed criticisms.

A number of amendments were proposed in Committee by my noble friend Lord Mottistone to deal with these issues. As can be seen from the Official Report for 12th January, cols. 1213 and 1218, the Government had considerable sympathy with many of the points made. We therefore undertook to bring forward our own amendments where we accepted that these were needed, and that is what we are doing now.

Your Lordships will recall that Clause 272 amends the Trade Marks Act 1938 by the insertion of a new section. We are now proposing the insertion of further sections and the amendment at page 123, line 20 merely paves the way for that. I therefore propose to say no more about that amendment.

Amendment No. 406 replaces subsection (2)(c) with a statutory defence. The existing formulation of subsection (2)(c) would have placed a significant burden on the prosecution in having to prove the absence of a belief. Proof of a negative is always difficult and we now think that shifting the burden of proof in this way will ease that burden without being unfair to the accused.

Amendment No. 407 will make it an offence to be in possession of counterfeits in certain circumstances. At the Committee stage I indicated that we were prepared to accept such an amendment in principle, but we wanted to think about the precise form of words.

What we are proposing is that possession of counterfeit goods in the course of a business should be an offence if the possession is with a view to committing a substantive counterfeiting offence. The words "in the course of a business" are consistent with the approach to offences of possession now being adopted elsewhere in this Bill, and the words to be inserted by Amendments Nos. 404 and 408 explain that "business" includes a trade or profession.

It is right to include in the definition the requirement that the accused should have it in view to commit an offence, because we do not want to catch, for example, the owner of a garage who has a tub of counterfeit Swarfega in his workshop for the use of his mechanics. That would be possession in the course of a business, but it ought not to be an offence under this clause if the use to which he is putting it is not an offence. Whether it would be a breach of any other legal obligation is, of course, not the concern of Clause 272.

Amendment No. 409 incorporates two new sections to be inserted in the Trade Marks Act. The first, Section 58B, gives the courts the power to forfeit counterfeit goods and material from persons convicted of counterfeiting. At the Committee stage I pointed out that general powers exist to order forfeiture of property used in the commission of crimes, but I undertook that we would look again at whether special provisions should be made for counterfeiting.

Having done so, we have concluded that a potential problem exists in relation to the practice of bringing specimen charges. Under the general forfeiture provisions, it is necessary to bring charges in respect of each counterfeit item for it to be susceptible to forfeiture. Where a raid on a warehouse might net many thousands of items, this is a practical impossibility. Clause 65 of the Criminal Justice Bill will extend the general power of forfeiture to cover offences taken into consideration, but this would be dependent on the accused's co-operation.

The new Section 58B overcomes this problem by making it possible to forfeit goods of the same description as goods in respect of which a conviction is secured—or material similar to material in respect of which there is a conviction—where they hear an identical or nearly resembling mark. So where a counterfeiter is convicted for selling one pair of fake blue jeans, his entire stock of blue (and, indeed, red) jeans bearing the same false mark may be forfeit.

I should perhaps say that "goods of the same description" and marks which are "identical or nearly resembling" are concepts which are used elsewhere in the Trade Marks Act so their use in these new provisions to be inserted in that Act will be construed in the same way.

Turning finally to new Section 58C, this gives local weights and measures authorities the power to enforce the new provision as if it were contained in the Trade Descriptions Act. I indicated in Committee that we should be prepared to make this amendment subject to the views of the local authorities. The consultation exercise that was carried out in connection with this showed a good measure of support for such a provision, so we are happy to make the amendment. I beg to move.

6.15 p.m.

Lord Williams of Elvel

My Lords, the House will be grateful to the noble Lord for explaining the amendments which consist of a fairly big chunk and need considerable analysis. He has, as he said, met the commitments he made in Committee and we are grateful for that. We have no problems with what he has said. I have just one small question which concerns Amendment No. 407. Can he tell us what the expression "nearly resembling a trade mark" means? I am sure that there is some definition of this, but perhaps he can help with the interpretation of what it means. Clearly some people will wish to know rather more precisely what the law means than I can understand at the moment. If he can satisfy us on that point, then we shall be happy with the amendments.

Lord Beaverbrook

My Lords, as I said, I believe that a considerable amount of this wording has already been used elsewhere in the Trade Marks Act. The example I gave is where a counterfeiter is convicted for selling one pair of jeans. Where a trade mark is similar, or nearly resembling the same trade mark, those jeans can also be seized. We do not want to make it a requirement that the mark be absolutely identical because that could cause a considerable loophole. The phrase "nearly resembling" has been construed by the courts but it necessarily turns on the facts of each case. No absolute definition can be given in advance. But I am sure that the courts will be able to carry on their business quite adequately with the wording that we have used in the Bill.

Lord Campbell of Alloway

My Lords, I believe that these words are an extension of the ordinary common law of passing off extended to afford seizure in a passing off situation.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 403: Page 123, line 23, leave out ("for a person acting with fraudulent intent") and insert (", subject to subsection (2) below, for a person").

The noble Lord said: My Lords, in speaking to Amendment No. 403, with leave I also speak to Amendment No. 405. The purpose of the amendments is to avoid possible difficulties with common law in Scotland. In Scots law, fraud is a common law offence, and it was felt that the presence of a statutory definition of "fraudulent intent" in an enactment extending to Scotland could have undesirable knock-on effects.

The amendments eliminate this possibility by removing all reference to "fraudulent intent", while retaining the elements or the definition. The scope of the offence as such is therefore unaltered. I beg to move.

Lord Williams of Elvel

My Lords, may I express to the noble Lord the long-range appreciation of my noble friend Lord Morton of Shuna for the amendments that he has proposed?

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 404: Page 123, line 36, leave out ("trade in").

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 405: Page 123, line 40, leave out from beginning to ("if") in line 41 and insert ("A person commits an offence under subsection (1) only").

On Question, amendment agreed to.

Lord Beaverbrook moved Amendments Nos. 406 to 409:

Page 124, line 4, leave out from ("question") to end of line 6 and insert ("; and it is a defence for a person charged with an offence under that subsection to show that he believed on reasonable grounds that he was entitled to use the mark in relation to the goods in question.").

Page 124, line 6, at end insert—

("(2A) It is also an offence for a person to possess in the course of a business goods or material bearing a mark identical to or nearly resembling a registered trade mark with a view to committing an offence under subsection (1).").

Page 124, line 24, at end insert— ("( ) In this section "business" includes a trade or profession.").

Page 124, line 24, at end insert—

("Forfeiture of offending goods and material.

58B.—(1) The court by which a person is convicted of an offence under section 58A may order that any goods or material in his possession, custody or control being—

  1. (a) the goods or material in respect of which the offence was committed, or
  2. (b) goods of the same description as those in respect of which the offence was committed, or material similar to that in respect of which the offence was committed, bearing a mark identical to or nearly resembling that in relation to which the offence was committed,
shall be forfeited and destroyed or otherwise dealt with as the court may think fit.

(2) In proceedings for an order any person with an interest in the goods or material which is the subject of the proceedings is entitled to appear before the court to show cause why it should not be forfeited.

(3) An appeal lies from an order made under this section by a magistrates' court—

  1. (a) in England and Wales, to the Crown Court, and
  2. (b) in Northern Ireland, to the county court.

(4) In Scotland there is the like right of appeal against an order under this section made by the sheriff court as if the order were a conviction.

(5) Any person who appeared or was entitled to appear to show cause against the making of the order may appeal against it; and an order shall not take effect until the end of the period within which notice of an appeal may be given or, if before the end of that period notice of appeal is duly given, until the final determination or abandonment of the proceedings on the appeal.

Enforcement of section 58A.

58C.—(1) The functions of a local weights and measures authority include the enforcement in their area of section 58A.

(2) The following provisions of the Trade Descriptions Act 1968 apply in relation to the enforcement of that section as in relation to the enforcement of that Act—

section 27 (power to make test purchases),
section 28 (power to enter premises and inspect and seize goods and documents),
section 29 (obstruction of authorised officers), and
section 33 (compensation for loss, &c. of goods seized under s.28).

(3) Subsection (1) above does not apply in relation to the enforcement of section 58A in Northern Ireland, but the functions of the Department of Economic Development include the enforcement of that section in Northern Ireland.

For that purpose the provisions of the Trade Descriptions Act 1968 specified in subsection (2) apply as if for the references to a local weights and measures authority and any officer of such an authority there were substituted references to that Department and any of its officers.

(4) Any enactment which authorises the disclosure of information for the purpose of facilitating the enforcement of the Trade Descriptions Act 1968 shall apply as if section 58A above were contained in that Act and as if the functions of any person in relation to the enforcement of that section were functions under that Act.".").

On Question, amendments agreed to.

Lord Mottistone moved Amendment No. 409A:

Page 124, line 24, at end insert— ("58D—(1) If it appears to a justice of the peace, from information given him on oath, that there is reasonable cause to believe that a person has in his custody or under his control for any of the purposes of section 58A of this Act

  1. (a) any goods or material bearing such a mark as is mentioned in subsection (1) of section 58A of this Act; or
  2. (b) any thing which he or another has used, whether before or after the coming into force of that section, or intends to use, for the printing of any such mark as is mentioned in the said subsection or for the application of any such mark to any goods or material,
the justice may issue a warrant authorising a constable to search for and seize the articles or other things in question, and for the purpose to enter any premises specified in the warrant.

(2) In the application of this section to Scotland, in subsection (1) for the words "justice of the peace" there shall be substituted the words "justice within the meaning of section 462 of the Criminal Procedure (Scotland) Act I975".").

The noble Lord said: My Lords, I start by expressing my gratitude to the Minister for his amendments which cover various points that were the subject of my amendments in Committee. Your Lordships who were here at 12.30 at night may be aware that in order to expedite time I moved about eight amendments together and my noble friend kindly replied to them bit by bit. Out of that we have come forward with three proposals, Amendments Nos. 409A, 409B and 409C—I am speaking now to Amendment No. 409A alone—which seemed to us not to have been covered by my noble friend's amendments. I now propose to explain Amendment No. 409A to your Lordships.

The amendment proposes new powers for constables to enter and search premises. I am sorry that my noble friend did not feel able to accept the amendment in Committee. There are a number of considerations to which he did not refer. In view of that I feel that it is right to put forward this amendment again for further consideration. I believe that the existing police powers fail to take into consideration the fact that counterfeits are not, as my noble friend has acknowledged in relation to another amendment, like other property used in the committal of an offence. He gave the example, with which I would agree, of house-breaking equipment which may be innocent in everyday use. He said of counterfeit goods that in a sense they are the offence. Again, I agree with that statement. The purpose of this amendment is to ensure that there is the power to search for counterfeits in all circumstances.

I should like to emphasise that the draft of the amendment is taken directly from the Forgery and Counterfeiting Act 1981. No doubt the power was included in that Act in order to reflect exactly the kind of consideration as that which I have just mentioned; namely, the need to obtain articles which are illegal.

In answering the amendment, my noble friend mentioned trading standards officers and their right of entry and seizure. He will note that Section 28, subsections (1) and (3), of the Trade Descriptions Act 1968 confer a power to enter premises and to seize but do not confer a power to search. I believe that the power of search is particularly important and that if it is not allowed to trading standards officers it should at least be allowed to police officers.

In commenting on this matter in Committee, my noble friend said that the amendment would give more power than the Police and Criminal Evidence Act 1984 which, in the case of constables, limits such powers to serious offences. I suggest that, while some counterfeiting may not be thought to be serious crime, it is its nature which calls for the power of search. I hope that on reflection, and when he has had an opportunity to consider what I have said, my noble friend will feel able to go some way towards meeting me in either accepting the amendment or undertaking to include a similar provision in the Bill. I beg to move.

Lord Beaverbrook

My Lords, the noble Lord, Lord Mottistone, moved an identical amendment at the Committee stage of the Bill. At that time, I said that we were unable to accept the amendment. The reason for this was that we did not think it was necessary in view of the fact that we had already accepted in principle the proposal to give to trading standards officers powers to enforce the new provision, and indeed, your Lordships have just now approved such an amendment.

The point is that trading standards officers already have powers to enter premises and seize evidence, and in some respects these are even wider than the police would be given under the amendment.

As my noble friend has said, Section 28 of the Trade Descriptions Act 1968 does not actually confer a specific power to search. But it does confer the power to enter premises, and, for the purpose of ascertaining whether any offence has been committed, inspect any goods. If there is reasonable cause to suspect an offence, there is provision for compelling the production of any books or documents from which copies may be taken, and if there is reasonable cause to believe that an offence has been committed, goods may be seized for testing. Also, goods and documents may be seized and detained if believed to be required as evidence in proceedings for an offence. In short, the powers under Section 28 are comprehensive and 20 years of enforcement experience have not found them lacking.

Where trading standards officers have reason to believe but are doubtful of the precise nature of what they might find, they also have the option of obtaining from the magistrates a warrant under the Police and Criminal Evidence Act 1984. This precaution provides the officer with an additional wider power which is useful in avoiding legal wrangling over whether particular documents or goods might fall entirely within the purpose of Section 28 of the Trade Descriptions Act.

So, the need to give any special extra powers to the police must be assessed against this background. As I said in Committee, police constables would in any case have powers of entry and search by virtue of the new offence being arrestable. These powers under the Police and Criminal Evidence Act 1984 authorise the police to enter and search the premises of a person who has been arrested for an arrestable offence for evidence of that or a similar arrestable offence. Under that Act powers of entry under warrant are confined to serious arrestable offences. As you will be aware, police powers to investigate offences were thoroughly reviewed by the Royal Commission on Criminal Procedure and subsequently codified by the Police and Criminal Evidence Act. This Act represents what Parliament considered to be a fair balance between the interests of law enforcement and the rights of the individual. My Lords, we do not think that the circumstances of counterfeiting warrant treatment out of line with the provisions of the Act, and I would therefore ask that my noble friend withdraw the amendment, because for those reasons I cannot agree with it.

Lord Mottistone

My Lords, I am grateful to my noble friend for explaining in such detail exactly why he does not like the amendment. I am left with the feeling that the problem of the power of search is still outstanding; whether it be for trading standards officers or the police does not matter. It is possible that my advisers, the anti-counterfeiting bloc, may suggest that we ask my noble friend to consider including the powers of search in those of the trading standards officers, which I do not believe they yet have. However, we shall read what has been said with great care and at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mottistone moved Amendment No. 409B:

Page 124, line 24, at end insert—

("58E—(1) The Commissioners of Customs and Excise may make regulations prescribing the form in which notice is to be given under section 58F and requiring a person giving notice—
  1. (a) to furnish the Commissioners with such evidence as may be specified in the regulations, either on giving notice or when the goods are imported, or at both those times, and
  2. (b) to comply with such other conditions as may be specified in the regulations.
(2) The regulations may, in particular, require a person giving such a notice—
  1. (a) to pay such fees in respect of the notice as may be specified by the regulations;
  2. (b) to give such security as may be so specified in respect of any liability or expense which the Commissioners may incur in consequence of the notice by reason of the detention of any article or anything done to an article detained;
  3. (c) to indemnify the Commissioners against any such liability or expense, whether security has been given or not.
(3) The regulations may make different provisions as respects different classes of case to which they apply and may include such incidental and supplementary provisions as the Commissioners consider expedient. (4) Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. (5) Section 17 of the Customs and Excise Management Act 1979 (general provisions as to Commissioners' receipts) applies to fees paid in pursuance of regulations under this section as to receipts under the enactments relating to customs and excise.").

The noble Lord said: My Lords, I beg to move Amendment No. 409B and at the same time speak to Amendment No. 409C. I am talking to similar amendments that were dealt with en bloc in Committee. They were my Amendmeents Nos. 312M and 312N. I regret to say that I am not convinced that some of the remarks made by the Minister in Committee in respect of those amendments are satisfactory. First, my noble friend said that imports from outside the EC are already covered by an EC regulation. That is correct; but I do not believe that it is correct to say that it follows that the amendments could not apply to such imports. There is nothing in the regulation to prevent that. Secondly, I know of Section 64(a) of the Trade Mark Act 1938 to which my noble friend referred. That provision has not been found to be useful in practice. Too much detail is required to be given to customs before the goods can be treated as prohibited. One of the beneficial effects of the EC regulation is that in the areas in which it operates it makes the procedure more workable.

There are a number of ways in which the system under the regulation is still not perfect and I should like to give two examples. First, the regulation applies only to goods "for release into free circulation" and not to goods which are simply "imported"—imported, say, for re-export and possibly re-processing. Therefore the importer must apply for that release before the Customs know whether they have the power to do anything about the goods which have been imported. I believe that the prohibition which operates against importation would be much simpler and more workable.

Secondly, the way in which the regulation is currently being implemented by UK Customs is not ideal. Circumstances will arise under the procedures that it is introducing where a consignment of counterfeit goods is imported and duly detected but where no power has yet arisen for the Customs to do anything to seize them. That is clearly undesirable and I believe that a simpler form of procedure will cure that. Both the amendments to which I am speaking seek to provide that simplest form of procedure.

Finally, I noted my noble friend's comment on resources. He said that they were a heavy burden on customs and excise. He repeated that during the debate on my amendment to Clause 102, Amendment No. 185 which I shared with the noble Lord, Lord Lloyd of Hampstead. I believe that my noble friend has been over-convinced by the Customs of the suggestion that it is hard worked. I believe that in this area he is being unduly pessimistic because, in this case, the Customs will already be carrying out work on counterfeiting under the regulations. I do not believe that my amendments would add to its burden. Indeed, I believe that it would simplify their task. I hope that the noble Lord will not again be over-persuaded by the Customs because it does not always have such a strain as perhaps it makes out. Once again, I hope that my noble friend will give consideration to this matter. If he does not like the actual amendments I hope that he will accept the principle of them as being worthwhile and include them in the Bill. I beg to move.

6.30 p.m.

Lord Beaverbrook

My Lords, identical amendments to these were moved in Committee by my noble friend. At that time I expressed considerable reservations about them but I undertook to see whether anything more could be done. I have to say that we have come to the conclusion that no changes should be made.

Since 1st January this year the principal provision on the importation of counterfeit goods has been the European Community Regulation 3842/86, which applies to goods entering the United Kingdom for free circulation from non-Community countries. From the point of view of the trade mark proprietor, the regulation is a considerable improvement on Section 64A of the Trade Marks Act, which applied previously. That section still of course applies to imports from other member states of the Community.

As regards the implementation or the regulation, we are bound by Article 3 which makes it an essential pre-condition that an application be made by the trade mark owner and accepted by the competent authority before Customs can intercept any counterfeit goods or detain them under the regulation. We do not see how the need for an application can be dispensed with by any member state in implementing the regulation, and an application cannot have retrospective effect. To accommodate the wishes of the anti-counterfeiting group we have, however, introduced a procedure whereby a trade mark owner may lodge an application which is vetted in advance and kept on file until he asks us to activate it. This is known as a provisional application. However this is merely an administrative arrangement and the application has no legal status until it is activated and converted into a standard application. No fee is charged for a provisional application for this reason until it is activated. Before this happens the provisional application does not give Customs the legal power to take any action against counterfeit goods.

My noble friend said that he did not think that the amendment would make any additional demands on our resources. I am afraid we cannot accept this. Work done in relation to counterfeit goods under the Council regulation has no bearing on any work which would be generated under the amendment. Each notice given would create additional work both in Customs headquarters, where notices would have to be processed administratively, and much greater work at the ports and airports, where officers would have physically to examine imports to search for specific goods covered by the notice. Moreover, whereas the Council regulation requires that before making an application a trade mark owner should have valid grounds for suspecting that the importation of counterfeit goods is contemplated, the amendment would impose no such restrictions. It also proposes a notice having a life of five years in contrast to the three months for an application under the regulation.

We believe that the regulation strikes the right balance between the interests of trade mark owners and the practical difficulties involved in requiring Customs officers to look out for counterfeits among the huge volume of trade in branded products entering this country. It is true that it applies only to goods entering for free circulation, rather than to goods which are simply imported, and the Government would, in fact, have preferred such a straightforward prohibition on importation. Indeed, we argued strongly for this in discussions within the Community, but the Commission and the other member states were not willing to accept it. The UK therefore had to bow to the majority opinion.

I should also point out that under Community law, as expressed by the European Court of Justice, we are not able to introduce any measures which would duplicate or re-enact directly applicable Community legislation. I would therefore ask that my noble friend withdraw the amendment.

Lord Mottistone

My Lords, I thank my noble friend for his full explanation which I shall read with great care. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 409C not moved.]

Lord Williams of Elvel moved Amendment No. 409D: After Clause 272, insert the following new clause:

("Provisions for the benefit of the Hospital for Sick Children.

. The provisions of Schedule (Provisions for the benefit of the Hospital for Sick Children) have effect for conferring on trustees for the benefit of the Hospital for Sick Children. Great Ormond Street, London, a right to a royalty in respect of the public performance, commercial publication, broadcasting or inclusion in a cable programme service of the play "Peter Pan" by Sir James Matthew Barrie, or of any adaptation of that work, notwithstanding that copyright in the work expired on 31st December 1987.")

The noble Lord said: My Lords, this amendment has already been debated. I beg to move.

On Question, amendment agreed to.

Clause 276 [Commencement]:

Lord Williams of Elvel moved Amendment No. 409E:

Page 125, line 18, leave out subsection (1) and insert— ("(1) The following provisions of this Act come into force on Royal Assent— paragraph 15 of Schedule 5 (patents: effect of filing international application for patent); section (Provisions for the benefit of the Hospital for Sick Children) and Schedule (Provisions for the benefit of the Hospital for Sick Children)(provisions for the benefit of the Hospital for Sick Children.")

The noble Lord said: My Lords, we have already debated this amendment. I beg to move.

On Question, amendment agreed to.

Schedule 6 [Consequential amendments: general]:

[Amendments Nos. 410 and 411 not moved.]

Lord Beaverbrook moved Amendment No. 412:

Page 185, leave out lines 16 to 20 and insert ("paragraph 10 (services of patent agents) substitute— 10. The services of registered patent agents (within the meaning of Part V of the Copyright, Designs and Patents Act 1988) in their capacity as such.".")

The noble Lord said: My Lords, in speaking to Amendment No. 412 standing in my name, with the leave of the House I shall also speak to Amendment No. 415. The paragraphs of Schedule 6 to which these amendments apply make consequential amendments to provisions in the Fair Trading Act 1973 and Restrictive Trade Practices Act 1976. These are concerned with the exemption of certain professions from some of the provisions of those Acts. The reason for the exemptions is so that restrictions on practice maintained by professional bodies, for example, restrictions on professional conduct, are removed from the ambit of the legislation on restrictive trade practices and unfair consumer trade practices. These professions are, of course, subject to the provisions of other competition legislation.

Amendments Nos. 412 and 415 correct two related technical errors in Schedule 6 which would have led to the result that any person, whether qualified or not, would have benefited from the exemptions when carrying on the business of acting as a patent agent. It was never our intention to broaden the scope of the exemptions to unqualified practitioners. The amendments will provide that only patent agents who are entered on the register—that is to say, only those who are qualified—will benefit. This will maintain the effect of the existing exemptions. I beg to move.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 413: Page 185, line 20, at end insert—

("House of Commons Disqualification Act 1975 (c. 24)

. In Part II of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert "The Copyright Tribunal".

Northern Ireland Assembly Disqualification Act 1975 (c.25)

. In Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert "The Copyright Tribunal".")

The noble Lord said: My Lords, with the leave of the House I shall also speak to Amendment No. 424. These amendments rectify an omission in the Bill as printed. The Bill should have contained provision to substitute references to the Copyright Tribunal for references to the Performing Right Tribunal in the House of Commons Disqualification Act 1975 and the Northern Ireland Assembly Disqualification Act 1975. The amendments do this. I beg to move.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 414: Page 185, line 22, leave out ("Restricted") and insert ("Restrictive Trade").

The noble Lord said: My Lords, I shall also speak to Amendments Nos. 416 and 417. These amendments all make minor corrections to the amendments to the Restrictive Trade Practices Act 1976 made by paragraph 14 of Schedule 6. Amendment No. 414 gives that Act its correct title, which would seem to be a good idea.

Amendment No. 416 deals with the definition of "design pooling agreement" contained in the new paragraph 5B which is to be inserted into Schedule 3 to that Act. The definition is limited to the new paragraph, to avoid any confusion with the meaning of: patent or design pooling agreement already contained in paragraph 5 of the same Schedule 3.

Amendment No. 417 amends the phrase "held or granted to" at line 15 on page 186 so that it will be "held by or granted to", which is obviously correct. I beg to move.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 415: Page 185, line 23, leave out from ("for") to end of line 27 and insert ("paragraph 10 (services of patent agents) substitute— 10. The services of registered patent agents (within the meaning of part v of the Copyright, Designs and Patents Act 1988) in their capacity as such.".").

On Question, amendment agreed to.

Lord Beaverbrook moved Amendments Nos. 416 and 417:

Page 186, line 1, at beginning insert ("In this paragraph").

Page 186, line 15, after ("held") insert ("by").

On Question, amendments agreed to.

[Amendments Nos. 418 and 419 not moved.]

Lord Beaverbrook moved Amendment No. 420: Page 188, line 3, leave out from ("section") to end of line 7 and insert ("the place from which a broadcast is made is, in the case of a satellite transmission, the place from which the signals carrying the broadcast are transmitted to the satellite.".").

The noble Lord said: My Lords, Section 49(7) of the Cable and Broadcasting Act 1984 contains a cross-reference to Section 14(10) of the Copyright Act 1956. The 1956 Act is of course being repealed by this Bill. Therefore, the cross-reference needs to be replaced and paragraph 22(5) of Schedule 6 to the Bill contains what was intended to be appropriate provision. Unfortunately paragraph 22(5) reflects the terms of Section 14(10) of the 1956 Act whereas it should reflect the broader terms of Clause 6(4) of the Bill. That is what Amendment No. 420 seeks to achieve. I beg to move.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 421: Page 188, line 36, at end insert—

("Companies (Northern Ireland) Order 1986 (S.I.1986/1032 (N.1.61)

. In Article 403 of the Companies (Northern Ireland) Order 1986 (registration of charges: charges which must be registered), in paragraph (1)(j) for the words from "on a patent" to the end substitute "or on any intellectual property", and after paragraph (3) insert— (3A) The following are "intellectual property" for the purposes of this Article—

  1. (a) any patent, trade mark, registered design, copyright or design right:
  2. (b) any licence under or in respect of any such right.".").

The noble Lord said: My Lords, the new paragraph to be inserted in Schedule 6 by this amendment would do for the company law of Northern Ireland what paragraph 23 of the schedule already does for the company law of Great Britain. I beg to move.

On Question, amendment agreed to.

Schedule 7 [Repeals]:

Lord Beaverbrook moved Amendment No. 422:

Page 188, line 42, at end insert—

(1945 c.16. Limitation (Enemies and War Prisoners) Act 1945. In sections 2(1) and 4(a), the reference to section 10 of the Copyright Act 1911.").

The noble Lord said: My Lords, with leave I shall speak also to Amendment No. 423. This amendment repeals an obsolete provision in an old Act. Your Lordships will see that the amendment relates to a reference to an Act which was repealed in 1957, contained in another Act and about a war which finished in 1945. It is hardly surprising, therefore, that that reference has been redundant since 1960.

Amendement No. 423 relates to the repeal already in the Bill of a reference to the Copyright Act 1956 contained in Schedule 3 to the Public Records Act 1958. That reference is the only surviving reference left in that schedule, so the more sensible course is to repeal the whole schedule and its introductory section. That is what the amendment does. I beg to move Amendment No. 422.

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 423:

Page 189, column 3, leave out lines 31 to 33 and insert—

("Section 11. Schedule 3.").

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 424:

Page 190, line 28, at end insert—

("1975 c. 24. House of Commons Disqualification Act 1975. In Part II of Schedule 1, the entry relating to the Performing Right Tribunal.
1975 c. 25. Northern Ireland Assembly Disqualification Act 1975. In Part II of Sechedule 1 the entry relating to the Performing Right Tribunal.").

On Question, amendment agreed to.

Lord Beaverbrook moved Amendment No. 425: Page 190, line 29, column 3, at end insert (In section 28(3), paragraph (b) and the word "and" preceding it.").

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

On Question, amendment agreed to.

Lord Williams of Elvel moved Amendment No. 426: In the title: Line 9, after ("offence:") insert ("to make provision for the benefit of the Hospital for Sick Children, Great Ormond Street. London;").

The noble Lord said: My Lords, this amendment has already been spoken to. However, I should like to thank the noble Lord, Lord Beaverbrook, for his patience and good humour and to complement him on his extreme feat of endurance in successfully carrying the Bill through its Report stage. We look forward to meeting him again on Third Reading. I beg to move.

Lord Beaverbrook

My Lords, I am grateful to all noble Lords who have taken part in our debates on the Report stage of this Bill. I am especially grateful to noble Lords opposite, who have perhaps endured the greater part of the many hours that we have all spent debating this Bill over the past few months. I too look forward to Third Reading and also to the Question, That the Bill do now pass.

On Question, amendment agreed to.