Select Committee on Regulatory Reform Eighth Report


3 Findings of our previous report

5. The proposal for the Order was laid on 10 November 2003, and we reported our findings to the House on 10 February 2004.[3] We concluded that the proposal should be amended in three respects before a draft Order was laid before the House.[4] The amendments we recommended to the proposal are summarised below.

Resuscitation of erroneously withdrawn applications

6. Section 14(9) of the 1977 Act presently provides that the withdrawal of a patent application is irrevocable. Although the comptroller presently has the power, under section 117(1) of the 1977 Act, to correct errors in patent applications, the Department doubted whether this power would extend to the case where an application was withdrawn in error. The Department therefore proposed to insert a new provision in section 14 to make it clear that section 14(9) does not affect the comptroller's power in section 117(1) to correct an error or mistake in the withdrawal of an application for a patent.

7. The Department also proposed to insert into the Act a new section 117(3), making provision for the comptroller to publish a notice of a request to correct an error or mistake in the withdrawal of an application, and a new section 117A, setting out the effects of the resuscitation of a withdrawn application. This would provide protection for third parties who may have used the invention which is the subject of the resuscitated application, or made 'effective and serious preparations' to use it, between the time of the publication of the notice of withdrawal and the publication of the notice correcting the withdrawal and indicating the resuscitation of the application.

8. We were concerned that the proposed amendments to the Act did not set out how the resuscitation procedure would operate where an error or mistake in the withdrawal of an application had been identified.[5] It was not clear whether the correction of an error or mistake in the withdrawal of an application would automatically have the effect of resuscitating the application.

9. In response to our concerns the Department undertook to amend the draft Order to provide for an administrative procedure for the resuscitation of applications. We recommended that the Department should amend the Order in the manner it proposed.[6]

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.


3   Second Report, Session 2003-04, HC 337 Back

4   HC (2003-04) 337, para 247 Back

5   Ibid., para 124 Back

6   Ibid., para 125 Back

7   The Defence Industries Working Group, BAE Systems PLC and QinetiQ. Back

8   HC (2003-04) 337, para 193 Back

9   The Chartered Institute of Patent Agents (CIPA) and the Trade Marks, Patents and Designs Federation (TMPDF). Back

10   HC (2003-04) 337, paras 200-202 Back

11   HC (2003-04) 337, paras 197-199 Back

12   See below, para 33 Back

13   Ibid., para 215 Back

14   Articles 9 and 10 of the draft Order contained in the proposal. Back


 
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