Examination of witness (Questions 480 - 502)
WEDNESDAY 11 NOVEMBER 1998
MR MARTIN
SANDFORD
Dr Williams
480. On intellectual property rights. Do you
think that Britain, particularly our universities, are good at
protecting intellectual property?
(Mr Sandford) Honestly, it is a very difficult question
to answer. We see a lot of university filed patents and we would
do them slightly differently. We tend to see them in the circumstances
that I described earlier, which is at the end of the priority
year. Nevertheless I know of a number of university patents which
have been successfully filed, successfully licensed and produce
significant revenue and I suspect that the biggest example of
that to date is actually Strathclyde University. Generally we
find that the resources brought to bear on the protection of intellectual
property in universities are professional and fairly well skilled,
but they are always short of time and money.
481. Do they perhaps expect too much in terms
of success and income from patents and rights?
(Mr Sandford) To go back to when the right of first
refusal was withdrawn from BTG and when all of the ILOs and, for
that matter, the exploitation companies were set up, I think that
they expected they would make most of their money by patenting
and licensing and they would do the odd bit of negotiating contracts
to do with research and consultancy as a bit of a sideline when
actually it is the other way round. It is the patenting and licensing
which is the longest term, hardest to do and they are much more
involved in particularly contract research where quite often the
patents will end up being part of what is sold with the contract.
482. Can you clarify for me, please? It is something
that was in the brief that you sent to us and I was a little puzzled
by it, that there are other forms of intellectual property rights
but patents are the strongest and best-recognised internationally.
What are these other forms?
(Mr Sandford) Okay. I would define intellectual property
as patents, copyright, know-how, trade marks, design rights; all
of those are enshrined in United Kingdom law, but they are not
necessarily all enshrined in other nations' laws although copyright
is, but when it comes to being able to pursue your rights through
the courts in Europe, USA, Japan, the right which is most clear
and is most easy to enforce is the patent right.
483. How do we compare with Germany, Japan,
the United States in terms of IPR and patenting?
(Mr Sandford) If you mean the legal framework, almost
identical.
484. No, I was thinking in terms of numbers
and success or income from whatever. You know, those kind of parameters.
I have recollections some years ago of seeing numbers; in fact
in Japan it was incredible, they were patenting everything in
sight, as it were, and we were relatively quite way down the league,
even taking into account a smaller base as it were.
(Mr Sandford) I have not looked at the statistics
for that for quite some time. My recollection is that as far as
the Japanese statistics are concerned, a lot of their patents
are just filed in Japan, they are not filed outside and that is
a question of protecting the home market but also stopping anybody
filing to prevent them exporting. So they are doing it for slightly
different purposes than we might. If you look at the number of
international filings from Japanese companies then they are very
similar to companies of the same GDP per capita.
485. Finally from me, should there be something
in university courses on IPR?
(Mr Sandford) Yes.
486. How substantial? I mean, 1 percent or just
a few lectures or what? Should they be mandatory at A level or
degree level, joint honours degrees?
(Mr Sandford) I think I would say probably at every
level and as much as can be incorporated into the curriculum,
but I suspect the most you would get is three hours.
Chairman
487. At least they would be aware of the subject?
(Mr Sandford) Yes.
488. They are probably not even aware it exists,
of course.
(Mr Sandford) Yes, awareness of the subject and where
to go for further information.
Chairman: To be taught the shortcomings
of your knowledge is actually an advantage. Mrs Curtis-Thomas,
you have a question?
Mrs Curtis-Thomas
489. Yes. I just would like to carry on for
just one moment on the question about whether or not IPR education
should be included in an academic environment. Would it be more
realistic, maybe, to put it within the professional domain and
make it part of the professional qualifications and portfolio?
(Mr Sandford) I think that would probably, in the
context of what we are talking about, be too late.
490. Right. Okay.
(Mr Sandford) Anyone working in the university could
make an invention, they could develop valuable technology. They
are most likely to at post-graduate level, and so I think that
is where it really matters, raising awareness at post-graduate
student level.
491. We have heard about the difficulties met
by organisations attempting to secure patent protection from the
European Patent Office, such as lengthy lead times and high costs.
Is this an expertise that you are familiar with and have you found
it more difficult or more costly to secure and protect patents
under European than any other patent system, such as Japan, for
instance?
(Mr Sandford) Europe is actually—in some ways
it is relatively cheap compared with some other jurisdictions.
For instance, in Japan there is a hidden cost which is you have
to translate your patent into Japanese and if it is a long pattern
specification, say thirty or forty pages, then that is an extremely
costly exercise. It would be a lot cheaper and easier if there
was a European patent. There is a European patent convention,
but there is no European patent, meaning that you have to pursue
patents in each of the individual European territories where you
want the patent; but there are a number of territories which are
more expensive than Europe, particularly some in South America.
492. In your opinion, what nation or collection
of nations currently offer the most effective patenting process
in terms of cost effectiveness and delivery of security?
(Mr Sandford) Well the answer to that would have to
be the USA, simply because by having one patent you can address
something like 50 percent of the developed world market and the
costs are not all that high.
493. What advantages would derive from a more
global harmonisation of the patent system?
(Mr Sandford) I think the answer to that and the previous
question would be if we did have a European patent which was truly
a European patent one application filed in Munich or wherever
which gave you patent rights throughout the Community it would
be as effective, hopefully, as the US patent because you would
cover nearly as much in terms of addressable market. There is
already the PCT—Patent Co-operation Treaty—which enables
any inventor to file in his home territory an application and
at the same time to go into the Patent Co-operation Treaty machinery
which will automatically, on payment of fees, progress that patent
in any territory he designates of the members of the PCT. So that
framework is already there and if you leap from what I was saying
about Europe and generalise it, if you could file one patent application
in your home territory and you have just one world wide patent,
that would be a tremendous leap forward, but there are a number
of difficulties that you would have to overcome there. The rules
about what is patentable and what is not and how patents can be
challenged on the way through are different in the different territories
and particularly they are different between Europe and USA.
Dr Gibson
494. What do you think the Government should
do to expand and sustain SME participation in Foresight networks?
Do you think that expanding that participation of SMEs is a good
thing and why would you think it, if you did?
(Mr Sandford) I think it is a good thing. It would
be a good thing to expand the participation of SMEs because, for
the reason I was giving earlier, they are the area of British
industry where resources are tightest, where they are least likely
to say: "Oh, these are too difficult, too expensive, we do
not have the resources to do it", but where they are also
sufficiently flexible to pick up technologies which are probably
too small to interest the large companies and work in which they
could make niche positions for themselves in world markets.
495. What about the Foresight saga?
(Mr Sandford) From what I saw of it—and we were
not really directly involved in it, but from talking to companies
both small and large that were -I think that firstly it did mean
that they looked above their short-term problems and were able
to think about opportunities in a discontinuous way and secondly
it did develop networks of communication which I hope have survived
and indeed, from one or two people I have talked to, it sounds
as if they may have.
496. Has it led to anything yet?
(Mr Sandford) I am honestly not qualified to answer
that.
Dr Turner
497. Well, you may not have got much change
out of Mrs Thatcher, but what suggestions might you make to the
Chancellor in terms of fiscal incentives to encourage R&D
in United Kingdom firms, particularly the smaller companies and
start-ups, such as tax credits for R&D and so on?
(Mr Sandford) I think that probably is the way you
would do it. Again you have to look at the ways in which it could
be abused or alternatively take the view that a certain amount,
given the importance of the money that you put in R&D. If
you specified a set amount that could be offset against tax, that
would automatically bias the benefit towards smaller companies.
498. So you would agree that there is a potential
then for tax credits to encourage private sector investment in
R&D. Do you think that would give you more investment than
you currently get?
(Mr Sandford) Yes, I do, although I am not directly
involved in an SME, but yes, I think it would.
Chairman: Another question from Mrs Lait.
Mrs Lait
499. Do you think the introduction of tax credits
for R&D would encourage or change the balance of your business
more toward British companies or would it just expand the market?
(Mr Sandford) Well it certainly might because it might
mean that there were more companies that would take licences from
us, but if it was done in the way I have described in the answer
to the previous question, for us, because our business is patenting
and licensing and because the cost of setting up a small licence
is the same as the cost of setting up a big licence, if they were
still small companies addressing small markets it might not increase
the extent with which we work with them.
500. Do you have any examples, any knowledge
of R&D tax credits working in other parts of the world?
(Mr Sandford) No, I do not.
501. So you do not have any examples?
(Mr Sandford) I have no knowledge of it. I have not
researched it.
Chairman
502. Mr Sandford, we thank you very much indeed
for the time you have spent with us today and we actually caught
up very well on our questions, even with a Division that curtailed
us by 10 minutes. The questions to you have been searching and
we have been treading new ground. There have been occasions when
you quite understandably have said you were not sure about a particular
aspect or you could not think of an example on the spur of the
moment. If we arrange for you to be sent a copy of the transcript
of this meeting and if you would care to read through again and
note those areas where you could not think of something on the
spur of the moment and then on reflection you have thought of
something, would you kindly write to us? It cannot be written
into the transcript of course, because that is a permanent and
actual record, but it would be very helpful to the Committee,
if you had second thoughts on any of the areas we have questioned
you on, we would be very grateful.
(Mr Sandford) I will gladly do that.
Chairman: Thank you Mr Sandford and thank
you very much for helping this Committee in this way.
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