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Baroness Amos: My Lords, this House has taken a very serious step.

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By this vote, this House—the unelected House—has made it impossible for the democratically elected House of Commons to receive this Bill promised in the Queen's Speech in November in time to consider it this Session.

That is very serious indeed, and the Government will consider what the consequences may be.

Lord Strathclyde: My Lords, I am grateful for the noble Baroness the Leader of the House having made that short statement.

I am sorry that she has not been able to tell us what the consequences might be this evening. Surely one of the consequences must be that this Bill should be carried over into the next Session.

Carryover was not a proposal put forward by the Conservative Party; it is part of the programme of modernisation introduced by the Labour

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Government. Why do they not now use their own tools to get this Bill on the statute book, if that is what Parliament wishes?

Baroness Williams of Crosby: My Lords, I, too, add that I believe that this is a very serious moment for this House.

As Members of the other side will know, the Liberal Democrats supported what they regarded as a serious attempt to try to move towards a reformed situation with regard to the judicial functions of the Lord Chancellor.

I cannot entirely exonerate the Government from some responsibility which flows directly from the consequences of 12 June. Having said that, we will consider very carefully on these Benches any way that we can rescue the Bill and the essential amendments that should be made to it. We feel that that has been made more difficult, not more easy, by the vote of this House.

        House adjourned at thirteen minutes before midnight.

Official Report of the Grand Committee on the

Patents Bill [HL]

Monday, 8 March 2004.

The Committee met at half past three of the clock.

[The Deputy Chairman of Committees (Baroness Fookes) in the Chair.]

The Deputy Chairman of Committees (Baroness Fookes): Before I put the Question that the Title be postponed, may I remind your Lordships of two points of procedure? Members of the Committee will speak standing; and the House has agreed that there shall be no Divisions in the Grand Committee. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.

If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Title postponed.

Clause 1 agreed to.

Clause 2 [Amendment of patents after grant]:

Earl Attlee moved Amendment No. 1:

    Page 1, line 22, leave out subsection (1).

The noble Earl said: The amendment is tabled in my name and that of my noble friend Lord Lyell. It is customary for Amendment No. 1 in a Committee of your Lordships' House to take a very long time indeed, but I do not think that that will be the case today.

I am worried about the phrase "any relevant principles" in the proposed new subsection. It broadens the scope of amending patents after being granted quite considerably. Concerns have been expressed to me that the phrase is particularly woolly and might impart meanings that are not intended.

As I understand it, UK courts will not allow an amendment to a patent if the owner appears to have acted improperly. A common example of a case in which an amendment can be refused is when the patentee has asserted the unamended claims against an infringer, knowing the claim to be invalid and in need of amendment. My understanding is that the European Patent Office does not work on that principle. Following the enactment of the Patents Act 1977, it was possible for a patentee to obtain post-grant amendments in a third jurisdiction; namely, the EPO. That would occur in post-grant opposition proceedings, which might continue for many years after the grant of the patent.

In such cases, a patentee can in practice obtain almost any amendment, provided that it meets certain legal requirements. In other words, there is either no discretionary element or it is exercised very liberally. In the light of that practice, our reports began to hold that the discretion to refuse amendments had, in effect,

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been abolished. However, the Court of Appeal in Kimberly Clark decided that that was wrong, and that discretion to refuse amendments still survived.

Proposed new Section 27(6) of the 1977 Act, requiring the court and comptroller to take account of the practice of the EPO, is plainly intended to have some liberalising effect on the discretion without removing it altogether. However, it is a rather vague requirement in an area where what is required is rather more precision.

If we agree to the change proposed, how bad will a patentee's conduct have to be before he will be refused an amendment? Is it bad faith or something less and, if so, what? I beg to move.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): Clause 2 is concerned with ensuring that consistent standards are applied to the amendment of patents which are in force in the UK. It ensures that the same standards are applied to all amendments made in the UK. It also ensures consistency between the standards that apply to amendments made in the UK, and those made at the European Patent Office.

In order to achieve that, Clause 2(1) ensures that regard will be had to the principles under the revised European Patent Convention when voluntary amendments are applied for in the UK. Voluntary amendments are those which are made at the patent-holder's instigation and outside of any legal proceedings. Subsection (5), on the other hand, ensures that regard will be had to those same principles when amendments are made during legal proceedings in the UK—for example, during proceedings concerning the validity of the patent.

If we were to delete subsection (1), it would mean treating those voluntary amendments differently from amendments made during legal proceedings. It would mean that the court or comptroller could have regard to the principles under the EPC for only those amendments made during legal proceedings. For other amendments, the UK would continue to operate its own standards.

We consulted on that point and users of the patents system were clearly opposed to such an arrangement. They desired a common standard for all amendments. With that explanation, I hope that the noble Earl will withdraw his amendment.

Lord Lyell: I thank my noble friend for presenting his amendment so succinctly. The Minister has suggested —indeed, the suggestion is in the Bill—that we might consult the Patents Act 1977. I am very interested in Section 27. Has that been amended? Have I missed something? Is there subsequent legislation? I do not see any necessity for relevance in Section 27, which gives a general power to amend the specification. Perhaps the Minister or the noble Lord assisting him might be able to advise me; suddenly, the happy word "relevant" sends a shiver down my spine.

The Minister has satisfied me partially, but I wish for clarity. In particular, when inventors or possible patentees are presenting their case there should be

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absolute clarity. I understand that there could be some difficulty or doubt in that case. I can see that the Minister has a look of not smugness but satisfaction on his face. Perhaps he can alleviate my fears at this stage.

Lord Sainsbury of Turville: That was an expression of deep thought as to how best to put the case. The point arises because of the need to bring things in line with the European Patent Office and the patent convention. The question of "relevant principles" is that, under the revised European Patent Convention, they will be equivalent to those already considered by the courts and the comptroller in the UK.

For example, the amendment will be liable only if the claims of a patent, as amended, meet the substantive legal requirements, and the amendment must result in a valid patent. It will not be allowed if it extends the scope of the patent protection or adds new matter that was not present in the patent application as filed. Already, there is a congruence between the principles involved.

Earl Attlee: I entirely agree with the Minister's point that we want to have consistency with the EPO. In addition, I can accept his point that we want to operate the same standard for all amendments, whether they are being litigated or not. Even Amendment No. 1 challenges my understanding of these matters. Therefore, I shall study very carefully what the Minister said and take advice. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 [Relief for partially valid patent]:

Earl Attlee moved Amendment No. 2:

    Page 2, line 32, leave out "to its or his satisfaction"

The noble Earl said: In speaking to Amendment No. 2, I shall speak also to Amendment No. 3. Both are probing amendments and question what the term "satisfactory" means in the context of Clause 3. It is not a controversial part of the Bill, but one where woolly wording comes into play again. Can the Minister explain what criteria will be used to decide whether things are satisfactory? If there is a criterion to be used, should it be set out in a schedule to the Bill? Who will decide the criteria?

I have tabled those amendments to ask whose standards will be satisfactory for the UK Patent Office or the European Patent Office. I beg to move.

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