HL Deb 02 November 1988 vol 501 cc373-6

376 Schedule 5, page 180, line 20, at end insert—

'Powers exercisable in consequence of report of Monopolies and Mergers Commission

9A. For section 51 of the Patents Act 1977 (licences of right: application by Crown in consequence of report of Monopolies and Mergers Commission) substitute—

"Powers exercisable in consequence of report of Monopolies and Mergers Commission.

51.—(l) Where a report of the Monopolies and Mergers Commission has been laid before Parliament containing conclusions to the effect—

  1. (a) on a monopoly reference, that a monopoly situation exists and facts found by the Commission operate or may be expected to operate against the public interest,
  2. (b) on a merger reference, that a merger situation qualifying for investigation has been created and the creation of the situation, or particular elements in or consequences of it specified in the report, operate or may be expected to operate against the public interest,
  3. (c) on a competition reference, that a person was engaged in an anti-competitive practice which operated or may be expected to operate against the public interest, or
    4. 374
  4. (d) on a reference under section 11 of the Competition Act 1980 (reference of public bodies and certain other persons), that a person is pursuing a course of conduct which operates against the public interest,
the appropriate Minister or Ministers may apply to the comptroller to take action under this section

(2) Before making an application the appropriate Minister or Ministers shall publish, in such manner as he or they think appropriate, a notice describing the nature of the proposed application and shall consider any representations which may be made within 30 days of such publication by persons whose interests appear to him or them to be affected.

(3) If on an application under this section it appears to the comptroller that the matters specified in the Commission's report as being those which in the Commission's opinion operate, or operated or may be expected to operate, against the public interest include—

  1. (a) conditions in licences granted under a patent by its proprietor restricting the use of the invention by the licensee or the right of the proprietor to grant other licences, or
  2. (b) a refusal by the proprietor of a patent to grant licences on reasonable terms,
he may by order cancel or modify any such condition or may, instead or in addition, make an entry in the register to the effect that licences under the patent are to be available as of right.

(4) In this section "the appropriate Minister or Ministers" means the Minister or Ministers to whom the report of the Commission was made.'

377 Page 180, line 20, at end insert—

'Compulsory licensing: reliance on statements in competition report

9B. In section 53(2) of the Patents Act 1977 (compulsory licensing: reliance on statements in reports of Monopolies and Mergers Commission)—

  1. (a) for "application made in relation to a patent under sections 48 to 51 above" substitute "application made under section 48 above in respect of a patent"; and
  2. (b) after "Part VII of the Fair Trading Act 1973" insert "or section 17 of the Competition Act 1980",'.

378 Page 180, line 20, at end insert—

'Crown use: compensation for loss of profit

9C.—(1) In the Patents Act 1977, after section 57 insert—

"Compensation for loss of profit.

57A.—(1) Where use is made of an invention for the services of the Crown, the government department concerned shall pay—

  1. (a) to the proprietor of the patent, or
  2. (b) if there is an exclusive licence in force in respect of the patent, to the exclusive licensee
compensation for any loss resulting from his not being awarded a contract to supply the patented product or, as the case may be, to perform the patented process or supply a thing made by means of the patented process.

(2) Compensation is payable only to the extent that such a contract could have been fulfilled from his existing manufacturing or other 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 or other capacity was under-used.

(4) No compensation is payable in respect of any failure to secure contracts to supply the patented product or, as the case may be, to perform the patented process or supply a thing made by means of the patented process, otherwise than for the services of the Crown.

(5) The amount payable shall, if not agreed between the proprietor or licensee and the government department concerned with the approval of the Treasury, be determined by the court on a reference under section 58, and is in addition to any amount payable under section 55 or 57.

(6) In this section 'the government department concerned', in relation to any use of an invention for the services of the Crown, means the government department by whom or on whose authority the use was made.

(7) In the application of this section to Northern Ireland, the reference in subsection (5) above to the Treasury shall, where the government department concerned is a department of the Government of Northern Ireland, be construed as a reference to the Department of Finance and Personnel.".

(2) In section 58 of the Patents Act 1977 (reference of disputes as to Crown use), for subsection (1) substitute—

"(1) Any dispute as to—

  1. (a) the exercise by a government department, or a person authorised by a government department, of the powers conferred by section 55 above,
  2. (b) terms for the use of an invention for the services of the Crown under that section,
  3. (c) the right of any person to receive any part of a payment made in pursuance of subsection (4) of that section, or
  4. (d) the right of any person to receive a payment under section 57A,
may be referred to the court by either party to the dispute after a patent has been granted for the invention.",

and in subsection (4) for "under this section" substitute "under subsection (1)(a), (b) or (c) above".

(3) In section 58(11) of the Patents Act 1977 (exclusion of right to compensation for Crown use if relevant transaction, instrument or event not registered), after "section 57(3) above)" insert ", or to any compensation under section 57A above,".

(4) The above amendments apply in relation to any use of an invention for the services of the Crown after the commencement of this section, even if the terms for such use were settled before commencement.'

379 Page 180, line 20, at end insert—

'Right to continue use begun before priority date.

9D. For section 64 of the Patents Act 1977 (right to continue use begun before priority date) substitute—

"Right to continue use begun before priority date.

64.—(1) Where a patent is granted for an invention, a person who in the United Kingdom before the priority date of the invention—

  1. (a) does in good faith an act which would constitute an infringement of the patent if it were in force, or
  2. (b) makes in good faith effective and serious preparations to do such an act,
has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the grant of the patent; but this right does not extend to granting a licence to another person to do the act.

(2) If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (1) may—

  1. (a) authorise the doing of that act by any partners of his for the time being in that business, and
  2. (b) assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(3) Where a product is disposed of to another in exercise of the rights conferred by subsection (1) or (2), that other and any person claiming through him may deal with the product in the same way as if it had been disposed of by the registered proprietor of the patent.".'.

Lord Young of Graffham

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 376 to 379 en bloc.

Moved, That the House do agree with the Commons in their Amendments Nos. 376 to 379 en bloc.—(Lord Young of Graffham.)

On Question, Motion agreed to.