§ 221 Clause 224, page 97, line 39, leave out from 'realm' to 'or' in line 41 and insert ', in pursuance of an agreement or arrangement to which the government of that country and Her Majesty's Government in the United Kingdom are parties,'.
§ 222 After Clause 226, insert the following new Clause—
§ 'Crown use of design right: compensation for loss of profit.
§ .—(1) Where Crown use is made of a design, the government department concerned shall pay—
- (a) to the design right owner, or
- (b) if there is an exclusive licence in force in respect of the design, to the exclusive licensee,
§ (2) Compensation is payable only to the extent that such a contract could have been fulfilled from his existing manufacturing capacity; but is payable notwithstanding the existence of circumstances rendering him ineligible for the award of such a contract.
§ (3) In determining the loss, regard shall be had to the profit which would have been made on such a contract and to the extent to which any manufacturing capacity was under-used.
§ (4) No compensation is payable in respect of any failure to secure contracts for the supply of articles made to the design otherwise than for the services of the Crown.
§ (5) The amount payable shall, if not agreed between the design right owner or licensee and the government department concerned with the approval of the Treasury, be determined by the court on a reference under section 236, and it is in addition to any amount payable under section 225 or 226.
§ (6) In the application of this section to Northern Ireland, the reference in subsection (5) to the Treasury shall, where the government department concerned is a Northern Ireland department, be construed as a reference to the Department of Finance and Personnel.'.
§ Lord Young of GraffhamMy Lords, with the leave of the House, I beg to move that the House do agree with the Commons in their Amendments Nos. 221 and 222 en bloc. I shall speak also to Amendments Nos. 233, 234, 242, 253, 253A, 253B, 341, 378 and 394, since they all concern the Crown use provisions.
The most significant change made by these amendments concerns the way in which the compensation to be paid for Crown use is to be calculated, in particular in relation to lost manufacturing profit. This is the profit which a rights owner would have made by virtue of having made articles for the Crown himself, but which he has not made because the Crown has used its Crown use powers and selected another manufacturer. The amendments make provision for payments to be made to rights owners who are also manufacturers to compensate them for lost manufacturing profit. These payments will of course be in addition to the normal payment for the use of the rights which will apply in all cases where the Crown use powers are used.
I am sure that these new arrangements on compensation for lost manufacturing profit will make a very significant contribution towards ensuring that the Crown user provisions do not act in any way as a disincentive to those who would invest in R&D. Unlike a number of other issues which have arisen on Crown use, they are concerned only with the practical, economic effects of Crown use and do not depend upon the nature of the property right involved. Therefore, the amendments make the 336 necessary change in respect of design right, registered designs and patents. The result will be that any manufacturer can be sure that he will receive fair and proper compensation, irrespective of what kind of right he holds.
Before I sit down, I should also say that we have taken the opportunity to table two fresh amendments, Amendments Nos. 253A and 253B, the former as an amendment to Amendment No. 253, simply in order to correct two grammatical errors involving the use of the word "who". These two amendments make no changes of substance.
§ Moved, That the House do agree with the Commons in their Amendments Nos. 221 and 222 en bloc.—(Lord Young of Graffham.)
§ On Question, Motion agreed to.