Draft Contracting Out (Functions in Relation to Applications for Patents) Order 2002

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Miss Johnson: I have already covered that. I said that no transfers would take place if there were any issue of national security.

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Mr. Robathan: I heard the Minister say that, but it is incumbent on us to ask the question. If what she says is what is happening, I am sure that no further questions will be raised in future. Will she also say what concrete measures will be taken to ensure that there is adequate competence in the English language and in the application of UK law in the Danish and Dutch offices? Are we providing tests? How will it work? We have no particular objection to the order, but it is important that we understand why it is being introduced and how it will work.

4.43 pm

Richard Younger-Ross (Teignbridge): Can the Minister enlighten us on how the financing will work? She said that there would not be an increase in the charges, but we will be contracting out, so extra money will be expended. Will she explain how that works? Where will extra funding come from to pay for the contracting out, given that more people will be doing the work while income remains the same? Am I making myself clear?

Miss Johnson: No.

Richard Younger-Ross: Then I will start again. In contracting out, someone pays other people to undertake the work—that is how the work is funded. That person might want to have greater input, but there are only so many patents in a year. I can understand how the system will work in the short term, but not how it stacks up financially in the long term. Can the Minister explain that, or write to me about it?

The figure of 5 per cent. that the Minister quoted seems very small for any dramatic change. Can she say why 5 per cent. has been chosen? What is magic about that figure? What number of applications does it represent? If the draft order is to bring about a decreased time period, how large will the decrease be? It does not strike me that 5 per cent. is a very large figure. How many people are involved in the contracting out process? How many additional staff are being employed?

4.45 pm

Miss Johnson: I shall deal first with the questions asked by the hon. Member for Blaby (Mr. Robathan). I can reassure the hon. Gentleman about the performance of the UK Patent Office in terms of recruitment. The office continues to recruit new examining staff: it has recruited 299 new examining staff since moving to south Wales in 1990, and 290 non-examining staff have been recruited to other, high-quality jobs in the short period since January 1997. Work continually leads to the recruitment and training of staff at the UK Patent Office under a successful programme, and the order in no way detracts from the importance or success of that programme.

The duration of the temporary period of work during the transfer period will be capped at 10 years, as I explained. Initially, the period will be two years, but it could be extended further on a one-year period basis up to the 10-year point, depending on work load.

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That period is temporary in that 10 years is the maximum.

Mr. Robathan: The period can therefore be extended up to 10 years under the order, but beyond that point there would have to be another order of some description. Is that correct?

Miss Johnson: Yes, that is correct.

On the skills in the Danish office, there is an international co-operation aspect to this matter; that aspect is not insignificant, although it is not the main driver behind the draft order. Successful co-operation reduces costs and makes patents more effective.

The Danish examiners have continued to search and examine since the law changed to end examination in 1995, so those skills have not been lost—they continue to be practised. The staff involved all speak and write good English, both general and technical, and have the necessary search and examination skills. They examine to the same criteria as the UK using the same electronic search system, EPOQUE, which is maintained by the European Patent Office. Increasingly, such matters extend beyond our shores and are international—certainly Europe-wide. During the past year or so, the European Patent Office has worked closely with Denmark and the Netherlands to ensure that the English of their examiners is adequate. They use a closely aligned system, so there should not be any difficulties in that regard.

The hon. Member for Blaby mentioned fees. A fees review is in progress, but that often happens and there is nothing sinister or odd about it. There is no connection between contracting out and any change in fees. Fees are reviewed from time to time. The current proposal is cost neutral and the charges will be exactly the same. I have already dealt with the question of national security, so that concludes my answers to the points he raised.

Turning to the points made by the hon. Member for Teignbridge (Richard Younger-Ross), a small amount of work is being contracted out—equivalent to that of about 10 examiners. The current work load for the Danish office would be 250 searches in the first year and 500 in the second, with no examinations. For the Netherlands office, the figure would be 150 searches in the first year and 250 in the second, involving cases that cover six specific areas of technology. That is less than 5 per cent. of UK input, which consists of 15,000 searches and 12,000 examinations per year—quite a large volume of business, as I am sure the hon. Gentleman appreciates. If the measure is successful, that figure could be increased to 10 per cent., but I do not expect it to increase more than that. The order provides flexibility that will enable the system to deal with business more rapidly and process a greater amount of work in a shorter period.

Funding will come from the Patent Office's budgets. The measure brings forward expenditure, but does not change the total viable expenditure because without the order, the money would have to be spent over a longer period, providing a slower service.

In conclusion, I draw the Committee's attention to the fact that work will start soon if all parties are

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content. I believe that the draft order is a significant measure that will provide increased flexibility for the Patent Office. It will improve the service the office can offer to customers and prepare it for international co-operation. I commend the order to the Committee.

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Question put and agreed to.


    That the Committee has considered the draft Contracting Out (Functions in Relation to Applications for Patents) Order 2002.

Committee rose at eight minutes to Five o'clock.

The following Members attended the Committee:
Amess, Mr. David (Chairman)
Caton, Mr.
Edwards, Mr.
Goodman, Mr.
Jackson, Glenda
Johnson, Miss Melanie
Jones, Lynne
Mann, John
Miller, Mr.
Murphy, Mr. Jim
Osborne, Mr. George
Plaskitt, Mr.
Robathan, Mr.
Younger-Ross, Richard

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Prepared 26 November 2002