National security
10. The Department proposed to amend the 1977 Act
to reduce the burdens on applicants for patents and their agents
resident in the UK who are presently restricted in their freedom
to file patent applications overseas.
11. At present a patent application may only be filed
overseas by a UK resident if that application has been filed in
the UK at least six weeks previously to the date of overseas filing,
or the permission of the comptroller has been obtained. The reason
for this restriction is to allow applications to be examined by
the Patent Office to determine whether they contain material,
the disclosure of which would be likely to compromise national
security. If applications do contain material which has national
security implications, the comptroller or the Secretary of State
may, under section 22 of the 1977 Act, issue directions restricting
the publication or communication of the contents of the application.
12. The Department proposed to remove this general
restriction on UK residents filing applications overseas by assigning
to the applicant the responsibility for determining the military
or national security implications of an application. Applicants
would be able to file applications abroad without prior filing
in the UK unless the application contained sensitive information.
Where the application contained sensitive information, the applicant
would be required to file it in the UK first by secure means and
would have to seek the permission of the comptroller to disclose
some or all of the contents of the application.
13. The proposal laid before Parliament contained
a number of changes from the initial proposals which the Patent
Office consulted on, and several consultees were partly or wholly
reassured by the amendments which had been made.
14. Although the Department supplied us with copies
of consultees' responses on the revised proposals, it omitted
to refer to the consultation on the revised proposals in the explanatory
statement, and gave no indication of whether the concerns of the
consultees had been met. We therefore sought the views of those
consultees who had expressed concern at the original proposals,
and found that, while some were indeed content with the revised
proposals, there remained significant concerns in some quarters.
15. Representatives of the defence technology sector[7]
argued that the proposed requirements prohibiting the disclosure
of sensitive information until the comptroller had given permission
would inhibit the freedom of operation of companies in the sector.[8]
16. There was more general concern about the requirement
to be placed on the applicant to determine whether an application
fell within the categories of technology with possible implications
for national security listed in the Schedule to the proposed Order.
The Department argued that the applications likely to fall within
the scope of the Schedule were likely to originate from only a
small number of specialised applicants. Professional organisations
representing the intellectual property sector[9]
claimed that the definitions in the Schedule were insufficiently
tightly defined. As a consequence, persons might innocently submit
patent applications which contained material deemed to be sensitive
without complying with the requirements for handling sensitive
material, thereby unwittingly breaching the law.[10]
17. The professional organisations were also concerned
at the Department's proposed definition of the behaviour which
would lead to a criminal sanction. The proposed Order provided
that anyone failing to file a patent application in a secure manner
who knew, or ought reasonably to have known, that the secure manner
of filing was required would commit an offence. The Trade Marks,
Patents and Designs Federation considered that the sanction should
only apply to those who had shown reckless disregard for the provisions
relating to secure filing, while the Chartered Institute of Patent
Agents considered that the sanction should only apply to actions
taken deliberately.[11]
18. The evidence we received indicated that there
was a doubt as to whether this aspect of the proposal met the
fair balance and proportionality tests laid down in the Regulatory
Reform Act. It was not clear that the new burden being imposed
on some applicants in terms of a requirement for secure filing,
and the way in which that new burden was targeted, was proportionate
to the overall expected benefit.
19. Our consideration of this aspect of the proposal
was overtaken by a meeting between the main patent industry interests
affected and the Patent Office.[12]
As a result of that meeting, the Department indicated to us that
it intended to amend the draft Order before final scrutiny. The
effect of this amendment would be to retain section 22 of the
1977 Act (information prejudicial to the defence of the realm
or safety of the public) in an unamended form and to amend section
23 (restrictions on applications abroad by United Kingdom residents)
to allow applications which do not relate to national security
matters to be filed abroad without prior permission or filing
in the UK.[13]
20. Had we not received this indication from the
Department, we would have proceeded to seek further evidence about
the proportionality and fair balance of the national security
provisions of the proposal. In the event we considered that there
was sufficient doubt as to the way in which they satisfied the
statutory tests to recommend formally that the relevant articles[14]
should be removed from the draft Order. We indicated that the
Department might either consider introducing amended provisions
in the draft Order, or that it could seek to amend the Patents
Bill [Lords] at Committee stage in either House.
21. We raised with the Department a further and separate
issue concerning a proposed amendment to section 22 of the 1977
Act. The Department intended to remove references to public safety
from section 22, considering that the concept of public safety
was now subsumed in the term 'defence of the realm'. On reflection,
the Department considered that there might be instances where
issues which related to the safety of the public might fall outside
the definition of issues prejudicial to defence of the realm.
It therefore proposed to amend the draft Order to retain the existing
references in section 22. We concurred in the proposed amendment.
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