To be published as HC 1799-iii

House of COMMONS



European Scrutiny Committee

Draft Agreement on a Unified Patent Court and Draft Statute

Wednesday 7 March 2012


Evidence heard in Public Questions 126-163



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Oral Evidence

Taken before the European Scrutiny Committee

on Wednesday 7 March 2012

Members present:

Mr William Cash (Chair)

Mr James Clappison

Michael Connarty

Nia Griffith

Kelvin Hopkins

Chris Kelly

Stephen Phillips

Jacob Rees-Mogg


Examination of Witnesses

Witnesses: Baroness Wilcox, Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills. Neil Feinson, Director of International Policy, Intellectual Property Office, Liz Coleman, Divisional Director, Intellectual Property Office and Nicholas Fernandes, Legal Adviser, Department for Business, Innovation and Skills, gave evidence.

Q126 Chair: Welcome back, Minister. We resume taking evidence from you on the proposed EU Unitary Patent and the Unified Patent Court since the interruption of our last evidence session on 1 February. We might go over a little of the ground covered on the last occasion, particularly if there is anything on which you want to update us, because things might have happened that you are aware of and it might be helpful if you and/or your advisors gave us an update. In the main though, our questions will focus on topics we could not cover on the last occasion because of the time.

One of the topics on which we questioned you and your officials was what was meant in the European Council Summit Meeting of 30 January by the EU intending to reach "A final agreement on the last outstanding issue in the patent package". The answers given by Mr Feinson were that he did not "recognise what was in the European Council Communiqué as being in the situation in the negotiations" and that it was "a simplification". Minister, you went on to say that "there is scope all the way along for amendment…it does seem to me that, if you keep talking and if you stay in the room long enough, you are likely to get things that will help the process forward".

With that in mind, I am now going to ask the first question as follows: given the level of stakeholder criticism of the Draft Agreement and Articles 6 to 8 of the Draft Unitary Patent regulation, what success has the Government had in seeking amendments to either of these proposals since we last met? So, what progress has there been since we last met?

Baroness Wilcox: Thank you very much, Chairman, for letting us come back again to see if we can answer further questions on what I think we would all agree is a fairly complicated subject, but one that is important to us all. We have continued talking with the Danes-as you will remember from the last Committee meeting, when we left I was about to go to Copenhagen at that time. That was the first opportunity that I had had under the new Danish Presidency to speak to the Danes and to our European partners about the patent and the court in an attempt to resolve the issues still outstanding. We have also been supporting the work on the rules of procedure by the group of experts that has started up again. That is about as far as we have got so far; we are in the hands of the Danish Presidency for them to take forward matters as they see fit. So, at the moment that is where we are.

Q127 Chair: Was the European Council’s statement right then, that this is effectively a done deal, except of course for the question of the location of the central division?

Neil Feinson: I think there are those at a senior level in Europe who would wish that it were a done deal and who do not want to concern themselves with the technical issues, of which our stakeholders and you have highlighted the importance. They would much rather that we could come to a quick deal and claim a victory collectively in Europe. What we have been saying is, "No, we didn’t like what happened on 5 December; we didn’t agree with the process". There are issues around both the location of the court and how the court is designed that we think need to be settled first.

Q128 Jacob Rees-Mogg: Turning to the jurisdiction of the EU courts, one alternative that has been suggested to us in our evidence would be for Articles 6 to 8 to be interpreted by the Court of Appeal and central division of the Unified Patent Court where the judges would have specialist expertise in patent law, unlike the Court of Justice. I would be grateful for your view.

Nicholas Fernandes: That is the intention, insofar as the issues will go before the courts of first instance, and before the Court of Appeal and the Unified Patent Court. The only issues that would go to the European Court of Justice would be any matters of interpretation arising from unified patent regulation. The intention is matters of substantive patent law, and this of course depends on what happens to Articles 6 to 8, should remain with the Unified Patent Court.

Q129 Jacob Rees-Mogg: But there is a risk that it could end up with the European Court of Justice, which does not have any expertise in these matters. I think that is the worry of the evidence that we have received.

Nicholas Fernandes: The risk arises from Articles 6 to 8, which deal with infringement of patents, but it is only where there are matters of interpretation that arise in relation to those articles. It may well be that matters are so clear that they do not need to be referred to the Court of Justice. In particular, in this case, we have a multinational court who will be looking at patent practices across Europe. They may decide that an issue of interpretation is very clear because all member states do it in the same way, in which case there is no need to refer. Therefore, the referrals to the court may not be as many as some have suggested.

Q130 Jacob Rees-Mogg: That sounds to me quite optimistic because usually, if litigants have the opportunity to appeal to a further court, they get quite keen to take it if they case has gone against them. Relying on, "Well, it may be all right," is not necessarily the best way of agreeing a deal.

Neil Feinson: Nicholas, if I may interject here, I think our position is that we totally recognise that there is a potential problem if a large amount of substantive EU law is embedded in the regulations because, as you suggest, that could lead to preliminary references to the ECJ. To the best of our abilities, we are trying to make sure that the substantive provisions around the definition of an infringement of a patent are not in the regulation so that those points are not points of EU law that have to be taken to the ECJ. We cannot escape the ECJ’s jurisdiction completely, but we are trying to ensure that it is very much only the setting up of the framework that feeds into the ECJ, and that the substance of the litigation is decided by the UPC and its Appeal Court.

Baroness Wilcox: These are the reasons why we are very happy for it to take as long as is necessary for us to get these things clear. There is no way that we want to sign Britain up to anything that is going to be worse than that which we have. The idea is to have something that is much better for us to work with. We think, particularly as our law tends to differ from theirs, this is an opportunity for the court and us to be able to get in there and make sure that we can actually write the rules if possible. That is what we are really aiming for, so at every turn we are looking to push just that little further. Everyone would like us to sign nice and quickly, because the British are being difficult about making sure that, as with questions like that, we can get as good a deal as possible out of it.

Q131 Kelvin Hopkins: This question follows on. How likely do you think it is that there will be a lot of references to the Court of Justice by the UPC, or will the doctrine of acte clair make them less frequent?

Baroness Wilcox: The effect of acte clair doctrine would be, we are hoping, that it would potentially reduce the number of references to the ECJ, but I will get Nicholas to give you better detail than I can.

Nicholas Fernandes: Yes, there is a discretion on the court of first instance as to whether to refer a matter to the Court of Justice. The doctrine of acte clair is a principle that, where provision is clear, it does not need to be interpreted; therefore, no reference is required. As regards the Court of Appeal, there is an obligation, as it’s a court of final jurisdiction or final appeal, but the doctrine of acte clair could apply in that case as well. There are certain conditions or guidance that have been laid down by the court as to how acte clair applies, and this was set out in the case of CILFIT in 1982: the referring court must be convinced that the answer would be obvious to other relevant courts and the European Court of Justice. One factor here, as I alluded to earlier, is that this is a multinational court; it will need to have regard to national as well as European law. These are parts of the sources of law that the Draft Agreement requires it to consider. Therefore, it may well be that certain cases are very clear, which then need not be referred to the court for interpretation.

Q132 Kelvin Hopkins: Just to clarify that, do you think there will be a lot of references to the Court of Justice in spite of the doctrine of acte clair being applied?

Nicholas Fernandes: It would be difficult to predict, because the references could only be on issues of interpretation of the unified patent regulation. So if there isn’t a great deal of substantive law in the unified patent regulation, then matters of interpretation may not arise.

Q133 Kelvin Hopkins: So it is not absolutely clear yet.

Nicholas Fernandes: No.

Baroness Wilcox: The longer we talk, the more we ask and the more times we return as we do, the clearer we hope we can get every one of these points. It is complicated and it is difficult; we just have to keep reminding ourselves that it is worth trying for.

Q134 Stephen Phillips: We have taken quite a lot of evidence from the professions about the existing decisions in relation to jurisdiction that have been forthcoming from the European courts and the way in which they conflict. Not to put too fine a point on it, the current jurisdictional position-at least as a matter of authority-is something of a Horlicks. Mr Fernandes, how would you summarise the impact of the existing decisions of the EU courts on trade mark litigation?

Nicholas Fernandes: The area of trade mark litigation is different from the area we are looking at in patent law, because with the trade mark litigation a lot of law has been harmonised through the Trade Marks Directive and the Community Trade Mark Directive. Patent law, on the other hand, has been largely untouched by European legislation, so the opportunities for reference are less. Does that answer your question?

Stephen Phillips: It does.

Q135 Nia Griffith: Could I turn now to the structure of the Unified Patent Court? How many countries have actually indicated whether they will actually have local and regional divisions?

Baroness Wilcox: We are still negotiating on this issue. We have no idea at the moment.

Q136 Nia Griffith: We have heard that Germany is already making moves and is suggesting that it would have some eight or so courts. You cannot confirm that, can you?

Baroness Wilcox: No.

Q137 Nia Griffith: Could you actually explain to us the interrelationship between the jurisdiction of the local, the regional and the central divisions?

Baroness Wilcox: Sorry, we have a lot of pages here; we are just going to make sure that we are absolutely right.

Neil Feinson: Minister, if I may just interject here, the idea is that at first instance there will be a combination of local and/or regional divisions and the central division of the court. A local division would be the division of a particular member state who decided to establish one, or member states may club together and set up a regional division. Then the Appeal Court will stand independent from this.

Q138 Nia Griffith: As yet we have no news as to who is planning what in terms of those different levels.

Neil Feinson: We hear gossip where people speculate about whether there would be an X or Y regional court and whether they would club together. We know that Germany wants to have probably more than one local division, but as I say this is tittletattle rather than people actually putting bids on the table.

Baroness Wilcox: Yes. The general rule is that the infringement cases start in the local or regional division, and validity or revocations cases will start at the central division, and there will of course also be an Appeal Court. At the moment, the court, where the court is and what is happening about the court is the great question that we are still waiting to answer. You can imagine that we are hoping very much that the central court will be London; and Paris is hoping that it will be Paris; and Munich is hoping that it will be Munich. This will make a decision. I do not wish to diverge from what you have asked me, but just to remind you again, the caveat we have put on coming together to make a single patent for us was to make sure that that court and the rules it was ruled by would be the laws that would apply to every court wherever it was within the whole of the 25. For us, that is a very important point that we will not have people using different systems in different places; it will be the same rules wherever the courts are. I hope that is some help.

Q139 Michael Connarty: Can I ask a simple question? I think the naïve question we have covered, and those who are listening will be users rather than the practitioners. Is there any intention-it says here local, regional and central divisions-that local or regional will have in any way delegated powers, or is it going to be a case of going to one court, not liking the result, going to the court above to appeal, not liking that, then going to the central division and the final Appeal Court? Is there any sense that there is a scale at which judgment can be made, so you do not end up with smaller elements of patents going from court to court to court-

Baroness Wilcox: Yes, exactly. I’ll give you a direct answer.

Michael Connarty: -and making a fortune for the lawyers and confusion for the people who actually want to register patents.

Baroness Wilcox: We’re with you on this.

Liz Coleman: Yes, we would certainly agree with you on this. If I may, Minister, there are only two levels, so you either go to the court at the first instance, or, if you do not like that decision, you have to appeal. At the moment, the local and regional divisions will be the first place that you go for infringement cases; if you want to revoke a patent you will go to the central division. They have slightly different powers, but there should not be a whole escalating spiral of decision making.

Michael Connarty: I’m sure that will bring a great deal of relief to anyone who ever wants to register a patent.

Q140 Nia Griffith: Can you tell us a little bit about the language regime of the different levels of the Patent Court?

Baroness Wilcox: Yes. In the central division and in the Court of Appeal, the language will be the language of the patent, which as you know is English, French and German. You will also know that the Spanish have decided that that is why they do not want to join at the moment; they feel it should be Spanish.

Nia Griffith: What about the Italians?

Baroness Wilcox: The Italians said they think they would like to join now, so it looks as though they are in. The regional and local divisions will work in the local language of the division, or potentially more than one language in a regional division. That does at least give us some comfort.

Q141 Mr Clappison: Could I ask about bifurcation, which is the cause of a lot of concern, it seems, with professionals in the field? Perhaps I could ask you, Mr Feinson, in the light of what you said at the previous session-you said, apparently, "I admit if we had our way we would not allow for bifurcation in this agreement"-could you tell us why the Government does not want bifurcation and what it is doing about it?

Neil Feinson: One of the drawbacks we see with bifurcation is an efficiency point, which is that you are running two actions instead of one. Perhaps more importantly, though, is the situation-particularly the way bifurcation operates in Germany-where an infringement action can be brought and a decision quickly reached, but the matching validity action, if the person feels that the patent they are accused of infringing actually is not worth the paper it is printed on, could take several years. The effect is you are knocked out of business, or that line of your business, for several years until you can go to a separate, slower court to get the right sort of decision saying, "Actually, you haven’t infringed that patent because that patent isn’t valid in the way that was alleged".

Mr Clappison: This is what experts have told us, particularly Henry Carr, who is the Chairman of the Patent Bar, and he said that if that happens as in your words, people will go for the infringement action first, and, by the time the validity action is heard, the factory or business may well be closed down, because the hearing will take place some years later. What is the Government doing about it?

Baroness Wilcox: We are negotiating. We would obviously prefer not to have this; we don’t like it, but the Germans love it.

Q142 Mr Clappison: Are we in a position to be able to stop it?

Baroness Wilcox: I will move to Liz, because she should be answering this now.

Liz Coleman: First of all, as the agreement is written, bifurcation is only an option for a panel, so we do not expect it to happen in every case. One of the ways that we hope to mitigate the result that we were talking about with regard to what happens in Germany at the moment, would be to address the timing issue, so that the two arms of the case should come together in timing; you should not be able to have a decision on infringement without the decision on validity being speeded up so that the two come together. We are hoping that that can be addressed through the rules of procedure.

Q143 Mr Clappison: Would you agree that as matters stand it would seem to follow that, if you were a patentee trying to enforce your patent, it would be obvious that you would want to bring your case in Germany, for example, which has made a practice of bifurcation?

Liz Coleman: At the moment Germany does, but of course, under the Unified Patent Court, the panels will be international panels, and they will be following a common set of rules. Therefore, we do not necessarily make the assumption that they will do exactly the same as they do at the moment.

Baroness Wilcox: We are therefore working towards the idea, if it has to be separated -the point that you make that we have one at this speed and one at that speed-that we try and see if we can get them to report levelly.

Q144 Mr Clappison: I think the question reflects a lot of concern we can see from practitioners in the field and business as well.

Baroness Wilcox: Yes, these are concerns, which we will work on now. All the people that you have spoken to, or the people that you are referring to, I think are on the Intellectual Property Office panel of advisors, so we are very aware of the worries that they have, and are working to try to achieve what they want, or as near as we can get.

Q145 Stephen Phillips: You told us what you are doing in terms of negotiation to try to mitigate the effects of bifurcation. Is it fair then to assume that, as far as the Government is concerned, this is not a line in the sand that may not be crossed, but that you are prepared to live with bifurcation if there can be some mitigation that you hope will work around it?

Baroness Wilcox: I don’t think I’d like to say that at this stage.

Stephen Phillips: Is it a line in the sand or isn’t it?

Baroness Wilcox: I don’t think I’d like to say that at this stage.

Stephen Phillips: The Government must have a view one way or the other on this.

Baroness Wilcox: We are negotiating at the moment and, as you will know, Mr Phillips, negotiations change as they go along. There is no line in the sand.

Q146 Stephen Phillips: Experience dictates that any reform, in any area of civil procedure, designed to speed up matters such as infringement proceedings, or indeed anything else, never really works. Is that really the only mitigation that the Government is able to suggest if bifurcation goes ahead?

Baroness Wilcox: I think that we are negotiating, and as the negotiations go forward so we will reflect upon where we are.

Neil Feinson: Minister, if I may add, we did actually ask our stakeholders this very question-

Baroness Wilcox: We did.

Neil Feinson: -about what their red lines are, particularly on Articles 6 to 8, bifurcation and a London seat. To a man/woman they said, "Well, we can’t actually give you that answer because this is a package. The issues are interrelated and we need to see the balance of the package against the status quo". That is very much our position. We are not going to draw a line in the sand definitively. We understand that bifurcation is a difficult issue for industry; we understand that Articles 6 to 8 is a difficult issue for industry. We will consult closely with industry in the endgame as to whether the deal is or is not worth doing, but if they themselves are not prepared to say, "This is a red line" or "That is a red line" I don’t think we should be doing so.

Q147 Mr Clappison: It is increasingly evident to us, from the evidence that we have received, that it is a red line to people, and they have raised it with us. I do not think we should throw it back on to them; I think it is a matter for the Government to stand up and to say what is a red line, or, "This is a red line".

Baroness Wilcox: When we get to the point of the negotiations when we’ve got as far as we can go, hopefully, if we’ve got to success, that will be marvellous and they will say how marvellous it is that we have done that. If we cannot, then we will go back; we will speak to all the people that you are referring to and we will see where it is we go from there.

Q148 Stephen Phillips: Mr Feinson just said you accept the position that it is a package, and therefore you have to take it as a package or leave it. The difficulty is that what you are really saying in that answer is that the Government might be prepared to trade away something that we have been told is a red line or a line in the sand-that’s bifurcation-in exchange for, for example, having the central division of the court located in London. Is that the Government’s position?

Baroness Wilcox: The Government’s position is that we are negotiating at the moment. Having listened to all advice, we know exactly what it is we want; we know exactly what the people you are referring to want; and we will do our very best to get the very best deal that we can for Great Britain.

Q149 Stephen Phillips: But with the potential of caving in on the issue of bifurcation in the future, or as part of a deal.

Baroness Wilcox: I can’t possibly say that.

Stephen Phillips: Very well.

Q150 Michael Connarty: I must admit I remain as puzzled as Mr Phillips about why the Government cannot reveal the strength of its position in any of these areas. I just wonder what the point is of coming to give evidence that we are negotiating. People want to know, when people come to give evidence, what the Minister and the Government are standing for. Standing for negotiations, that we give up everything or we give up nothing, seems to me to be not a very satisfactory way of answering questions at a Select Committee.

Baroness Wilcox: I’m so sorry. Every one of the countries that are negotiating at the moment has things that they would like. The Germans want more bifurcation; the French want more French–they think the English get favourable treatment. Small states do not want to pay very much, etc. Everybody has something they are negotiating with. We know exactly what it is in the best of all possible worlds we would like, and you know because you have taken evidence. When people say that there is a line in the sand that they will not go past, that is not completely the impression that we have been given by the stakeholders that we have been talking to. We have gone back after our meetings with you to speak again with the stakeholders to see exactly how far they wish to go, and it is for them to talk with us all the way along to see how it is they feel that things are going.

Q151 Michael Connarty: The Minister may not be surprised at my next question. The stakeholders whom we keep referring to have all submitted evidence, and the comment that is consistent is that the Unified Patent Court should not be given exclusive jurisdiction in the first instance, and that it has to prove its worth, they have suggested possibly over a period of 15 years. The current system, they have said, is far from broken. They are not saying that they want this as an alternative to a system that does not work; they want an improvement. It should not be permanently replaced until it has proven its worth. This sounds eminently sensible; does the Government support that position?

Liz Coleman: Exclusive jurisdiction is something that the court will need, because otherwise we will end up with conflicting decisions between the Unified Patent Court and the national court in relation to, certainly, the bundle patent in due course. Because we understand the concern of stakeholders about allowing the court to build up its reputation and caseload so they can see how it works, we have been negotiating on the transition period during which people will be able to use the national court instead of the Unified Patent Court, and patent holders will be able to opt their own patent out of the system of the Unified Patent Court entirely. At the moment, at the last stage of negotiations, the transition period was already becoming quite long.

Q152 Michael Connarty: Can I just make a comment before we pass on? It seems to me that, if you have a negotiator fronting your campaign who does not seem to have guarantees that they will not give up on the location of this central court or the question of bifurcation, you can see why stakeholders might end up in the worst of all positions, getting neither or none of the things they want. They might think they have been sold down the river by the Government if in fact the negotiation proves not to be quite so skilful or as effective as we all hope.

Baroness Wilcox: I can only tell you that we have the stakeholders you are referring to close to us. The Intellectual Property Office has them and they are informed every step along the way and negotiated with. As you have heard, exclusive jurisdiction is one area where we still have concerns; of course we still have concerns about it, and we will continue to negotiate. Stakeholders know we will too. They do know what we are doing. It is not as if we are doing it in a vacuum.

Michael Connarty: Let’s hope they don’t feel at the end of the day that you have let them down.

Baroness Wilcox: No, never.

Q153 Chris Kelly: Minister, how likely is it that suitably qualified and experienced judges will be found to fill the local and regional divisions of the UPC?

Baroness Wilcox: The unified court should not lead to an increase in patent cases in Europe. That is something that we have emphasised. It will be the reverse, in fact, as multiple litigation is replaced by a single European Act. A proportion of the existing expert patent judges in the major jurisdictions will therefore become available to work for the unified court as the caseload of the court grows. It will not reach full capacity for some years, and training for additional judges is already planned to start as soon as the court is agreed. I don’t know if that is the answer you were looking for.

Q154 Stephen Phillips: I will follow up on that. If you take a small state, it probably has very few patent cases in any one year and they will no doubt be assigned to a general division rather than to a specialist division. If, in some of the small Baltic states for example, there are no specialist patent judges, how and by when are they going to be created?

Liz Coleman: Some of the smaller states have already talked about joining regional divisions with larger states, so people have certainly talked to us about coming in with the UK on a regional division. There would therefore be room for their judges or their future judges to gain experience by working in that way. It is also the small states who have been very interested in the possibility of training up judges so they will have patent expertise. One reason most of these smaller states have joined, for example, the European Patent Convention is because they want their patenting environment to become improved. That is the way I think it will go forward.

Q155 Stephen Phillips: How long is the transitional period that is currently being contemplated? You described it in an answer to Mr Connarty. Where the court has exclusive jurisdiction but there are transitional provisions allowing you to go before the national court, how long is that contemplated as being?

Liz Coleman: In the last text that the discussions took place around, it was seven years to start with, with the possibility of another seven years. That would also cover patent applications, which could be up to that, so it is getting quite long.

Q156 Chair: On the question of the location of the central division, why in your opinion is it so important that the central division should be located in the UK?

Baroness Wilcox: Why do we think it’s important?

Chair: Why do you think that it is so important that the central division is located in the UK? If I am prevailed upon to put it another way, what do you think the consequences would be if it was not located in the UK?

Baroness Wilcox: We would like it to be located in London. We think that we have the best facilities; we think the country has a wonderful situation here; we know pretty well how much it will cost to run it per year-about £1 million-and we know the amount of money that it would bring in to London. Obviously we would like to have it here; we would also like to write the rules. These are the things that we would like to bid for and negotiate for. Other than that, we will be looking at the other locations and, during conversations when we were there with the Poles, there was a suggestion that the central court might not necessarily be led by a national judge from the country it was going to be located in; it might be led by someone from another country. We would like to think that, if we did not get the location, we might be able to lead on that. We would like to see if that is a suggestion that might still be considered. This was in the side negotiations when they were trying to get the vote done at the end of December to see if they could get it within the Polish Presidency. Whether that will still be there I don’t know, but I think it would be very good for us if we could have it here in London. We have the Rolls Building-I don’t know if we will be able to use it, but it is there and it is open-we have an expertise here and, of course, we work in English.

Q157 Michael Connarty: I am not anticipating a full and frank answer to my question, but-

Baroness Wilcox: Edinburgh?

Michael Connarty: I would say Edinburgh would be before London at every chance. It’s already too crowded down here with too much of the power and wealth of our country; it is distorted, and I am not a separatist. I would like a yes/no answer to my question. The Minister doesn’t seem to be fond of red lines, but are there circumstances in which the UK would compromise on location of the central division rather than pressing for London or the UK? Yes or no?

Baroness Wilcox: Yes. We are still in negotiations; we have to say we are still in negotiations. We are still in negotiations.

Q158 Stephen Phillips: "Yes, but we are negotiating?" Is that right?

Baroness Wilcox: We are still negotiating, but we would like to have a single patent court.

Q159 Michael Connarty: I think there might have been a bit more feeling of strength in the arm of the people, practitioners and companies if it was a no instead: I think "still in negotiation" is probably a cause for concern. It is certainly for me a cause for concern that we have a Minister who cannot tell us with some strength that they will go out and fight for our country in a negotiation as important as this.

Baroness Wilcox: I hope we will fight for our country to get the best possible deal that we can. The best possible deal that we can depends upon a lot of factors. We know what it is we would like in the best of all possible worlds, but we may negotiate to get the best deal we can and then look at the best deal we can and see if it is worth having. That is how I have always negotiated. I come from a business background; I have been a fish trader most of my life; I know how to negotiate-

Michael Connarty: Look at the state of that industry.

Baroness Wilcox: That’s true, but that’s another argument for another day.

Q160 Jacob Rees-Mogg: Just following on, I completely understand why you do not want to give away the details of your negotiating position. That seems a perfectly rational thing to do during a negotiation. However, by ruling out red lines in a couple of areas, that indicates that those areas are up for negotiation. That is where I am troubled, because it seems from what we have heard that there is strong opposition to not having the court here and on the bifurcation issue. From what you are saying, those are in the negotiating pot because you are not willing to rule them out.

Baroness Wilcox: I would love to say to you "Here is where we stand and this is it", but it is a negotiation. This is an open court. This will be reported in the press, and the press is read in other countries than this country. I do not want to totally reveal our position; I don’t think that would be right and proper for us when negotiating.

Jacob Rees-Mogg: I understand that, but unfortunately what has been revealed is that there aren’t these two red lines- that is what is concerning; if they were red lines, you would have no difficulty in saying so-and that they are in the negotiating pot, which is what people will get from this discussion.

Q161 Stephen Phillips: Can I just follow up on that? Essentially, we could end up with a deal-and I appreciate that we then have the opportunity to decide whether or not we want to sign up to it-where the things you have described as so important, which you are negotiating about, are things that just might not happen, Don’t you find that concerning? Certainly I think we all do, given the evidence we have heard. We would be left with a takeitorleaveit patent court, and left behind with yet another European institution that is not in London. Hasn’t the time come for you and the Government to say, "These are our red lines; if you can’t agree with them, then we may as well stop negotiating now"?

Baroness Wilcox: It has been 41 years since they have been talking about a single patent for the European Union. During that time, we have watched the Chinese come forward, who are lodging 1 million patents a year-one patent for the whole of their country. We have the United States, who are lodging half a million patents a year-one patent for the whole of their country. We have the disunited states of Europe, where people in this country, particularly small and medium size business where we need growth so much, are having to lodge their patents in country after country within the European Union in different languages, legally translated. It is costing a fortune. If there is a chance for us to get a single patent, then we will do everything we can to advantage the traders from Great Britain. That is what I am trying to do; that is what my Government is trying to do; and that is what I will continue to do for as long as I am privileged to be in this position.

Q162 Stephen Phillips: But, you accept, at the potential cost of riding over the things that this Committee has been told in evidence ought to be red lines.

Baroness Wilcox: This Committee has been told things in evidence by organisations that are working as advisors to us for us to negotiate. They are perfectly well aware of the fact that, in any negotiation, it is pretty rare that you are going to get 100% of what you want. You are asking me where we draw the lines; it all depends on the whole negotiation. The only other thing I can tell you is that I am prepared to come back to this Committee with our team again and again, and send as many letters as I possibly can to the Chairman, to make sure that you have everything that you want. I cannot emphasise enough how important it is for us to feel that we have the confidence of this Committee. I know that it is extremely difficult when I cannot put red lines in the sand.

Q163 Chair: Can I just say that it is also extremely important to us, on behalf of Parliament, to get answers to the questions? Therefore, I would ask you if it is possible for you to provide us with a note of the current state of affairs regarding the stakeholders and, also, that you meet with the stakeholders in light of the questions that have been put to you during the course of these proceedings so that they are as up to date as they need to be. We look forward to receiving that as soon as you reasonably can.

Baroness Wilcox: Yes. I would be delighted to do that and delighted to have the opportunity to do it. Thank you very much indeed.

Chair: Thank you very much indeed.

Prepared 15th March 2012