Select Committee on Regulatory Reform Second Report


Appendix E

Letter from BP International Limited to the Clerk of the Committee

Proposal for the Regulatory Reform (Patents) Order 2004

I refer to your letter dated 12 December 2003 regarding the Government's proposal for the Regulatory Reform (Patents) Order 2004. I had submitted comments on behalf of BP p.l.c. concerning the proposed amendments to sections 22 and 23 of the Patents Act 1977 as set out in the consultation. Your letter solicits our views as to whether the amendments proposed by the Patent Office;

(a)  are sufficient to maintain the necessary protection in the existing law and

(b)  have adequately taken into account the reservations expressed in our comments

BP p.l.c. welcomes the proposals to reduce the restraints currently imposed by sections 22 and 23 of the Patents Act 1977 and acknowledges the efforts made by the Patent Office to address the concerns which were raised during the consultation process.

We believe that the proposals are sufficient to maintain the necessary protection in the existing law.

The wording of sections 22(8A) and 23(3A) make it clear that criminal sanctions will only apply when the failure is by a person who knows or ought reasonably to have known that the application should have been filed in that manner. We continue to have reservations about this wording. However, I understand that these sections are to be further amended to restrict the criminal sanctions to those who know or are reckless as to whether an application should be filed in the prescribed manner. We believe that this further amendment overcomes our concerns. Although there remains some uncertainty over the precise scope of the matter covered by the Schedule, this is unlikely to be a concern to BP as any doubt can be clarified by seeking guidance from the Comptroller under the proposed new section 23A.

In conclusion, we believe that the proposed amendments to sections 22 and 23 will be a significant benefit to BP.

Our detailed comments are enclosed.

5 January 2004

Proposal for the Regulatory Reform (Patents) Order 2004: comments of BP plc regarding the National Security Provisions

BP p.l.c. welcomes the proposals to reduce the restraints currently imposed by sections 22 and 23 of the Patents Act 1977 and acknowledges the efforts made by the Patent Office to address the concerns which were raised during the consultation process. The proposed amendments go a long way in dealing with our concerns. The proposal that criminal sanctions in relation to new section 22(1A) would only apply when the failure is by a person who knows or ought reasonably to have known that the application should have been filed in the prescribed manner does not go far enough to satisfy our concern. However, we understand that it is now proposed to further amend sections 22(8A) and 23(3A) to restrict the criminal sanctions to those who know or are reckless as to whether an application should be filed in the prescribed manner. This is much more satisfactory. Overall, we believe that the proposed amendments to sections 22 and 23 will be a significant benefit to BP.

1. BP p.l.c. is the holding company of one of the world's largest petroleum and petrochemicals groups. BP's main activities are exploration and production of crude oil and natural gas; refining, marketing, supply and transportation; and manufacturing and marketing of petrochemicals. BP has a growing activity in gas and power and in solar power generation. BP has well-established operations in Europe, North and South America, Australasia and Africa.

2. BP operates in 100 countries and has research or development activities in a number of locations. Often the research and development teams consist of nationals or residents of more than one state. Also, teams are encouraged to draw on the expertise of colleagues within the BP group of companies and external collaborators around the world. As a consequence, it is not unusual for inventions arising out of these activities to have inventors and/or owners from more than one state. BP therefore has to take care that in filing patent applications it complies with the national security provisions in the relevant states.

3. The UK Patent Office has always provided a very responsive service when asked to provide permission to allow a filing abroad. Nevertheless, the need to make a request introduces a delay in the filing procedure.

4. According to the explanatory document less than 0.5% of the patent applications filed at the UK Patent Office contain information the disclosure of which would prejudice the safety of the realm and these originate from a small number of highly specialised applicants who are fully aware of the nature of their work. Consequently, the proposed changes should have little or no impact on the protection provided in the existing law.

5. BP acknowledges the need for individual states to have powers to protect sensitive subject matter that might present a security concern. However, we share the view expressed in the Consultation Paper that the present provisions in the UK are unnecessarily burdensome.

6. As far as we are aware, BP has never been refused permission to file abroad when a request has been made and has only rarely received directions under section 22. On those occasions when directions have been issued it has generally been apparent from the nature of the invention and/or wording used in the specification that such directions might be issued.

7. It is acknowledged in the Explanatory Document (6.206) that the new procedure is more complicated. As mentioned above, the existing provisions of section 22 and 23 of the Patents Act 1977 are in our view unnecessarily burdensome. However, from an applicant's perspective they do have the attraction of being simple. Since all applications must be filed in the UK unless permission is granted to file outside the realm and all applications are scrutinised by the Patent Office, the applicant can be sure that no criminal offence will be committed.

8. In the Explanatory Document (C39) it is acknowledged that applications might be filed in the incorrect manner unwittingly, and that in such circumstances a criminal sanction would be disproportionate. It is also stated that the subsection relating to the criminal sanctions has been drafted to make it clear that criminal sanctions will only apply when the failure is by a person who knows or ought reasonably to have known that the application should have been filed in that manner.

9. We suggest that it would be easier, and more appropriate, to determine whether someone deliberately, negligently or recklessly filed an application, or caused an application to be filed, in contravention of the provisions of sections 22 and 23 than to determine whether, when doing so, they "ought reasonably to have known" that it should be filed in accordance with the law. We have been informed by the Patent Office that it is proposed to further amend sections 22(8A) and 23(3A) to restrict the criminal offence to those who know or are reckless as to whether a patent application should be filed in the prescribed manner. This latter amendment would overcome our concerns.

10. The Schedule to the Regulatory Reform (Patents) Order 2004 contains the list of matters the publication of which might be prejudicial to the defence of the realm. It is considered unlikely that the Schedule will apply to many BP applications. However, the clarity of the Schedule is crucial to the ability of applicants to comply with the National Security requirements. Applicants and agents are likely to err on the side of caution and make applications in the prescribed manner or seek the guidance of the Comptroller where there is uncertainty.

11. The proposed amendments have improved the clarity of the list of matters the publication of which might be prejudicial to the defence of the realm. The Annex is quite long and there remain some areas that appear to lack clarity. For example, Class 8(a) of Part 2 of the Schedule lists "High temperature alloys". As no temperature is given it is not clear whether subject matter relating to an alloy developed for say furnace tubes is technology adapted for military use. However, it is believed that there will be relatively few applications where there is doubt and in these cases, guidance can be sought under S23A.

12. It is appreciated that the proposal has been amended (S 22(1C)) to make it clear that the comptroller can give authority to disclose information contained in an application to which subsection 22(1) applies. This is important to enable a research team comprising individuals in different countries and employed by different legal entities (perhaps of the same group of companies) to continue to collaborate during this period.

13. As mentioned above, it has been extremely useful to be able to obtain clearance under the existing section 23(1) for filing abroad from the Security Section of the Patent Office. This has been a quick, relatively informal procedure. The proposed section 23A provides for a person unsure whether or not section 22(1) applies to seek guidance from the comptroller. If this procedure proves to be as responsive as the present process it will be greatly appreciated by applicants and their representatives.

14. It is noted that the manner of seeking guidance under section 23A is not specified. In the past, when we have required authorisation to file abroad, it has been our practice to send to the Patent Office all or an appropriate part of the patent specification. There does not appear to be any requirement that the prescribed manner of filing required by section 22(1B) should be followed in respect of an application for guidance.


 
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