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Earl Attlee: I am grateful for the Minister's response to Amendment No. 11. We did not have the benefit of the noble Lord, Lord Grabiner. However, we do have our noble friend Lord Kingsland. I shall consult my noble friend very carefully about "best endeavours". Despite the example quoted by the Minister, I am not convinced. We shall look at this matter very carefully and, possibly, will come back at a later stage.
Lord Razzall: I am grateful for the Minister's comment with regard to Amendment No. 12. I look forward to seeing the limited amendment that he proposes to bring forward. I am not persuaded by his arguments regarding Amendment No. 10. If I understand him correctly, in substance he said that basic conduct and contact with a retailer is extremely limited and, therefore, the purpose of my amendment goes wider than any contact contemplated with the retailer. Under Clause 11(3) there would be three new circumstances under which it is contemplated there will be direct contact by someone who alleges that
I am perfectly happy to accept that the wording may be imprecise and limited but, in the context of those six types of contact, are we really suggesting that no discussions will take place to avoid potential litigation? My amendment seeks to ensure that if someone engages in that sort of communication to negotiate a settlement, they are not subject to the threats provisions.
Lord Lyell: Before the noble Lord does so, I was very impressed by what the noble Lord, Lord Triesman, said. Indeed, he offered considerably more than a scratch; he offered a reasonable concession that he would look to see whether he could meet halfway the concerns of my noble friend Lord Attlee and myself.
The noble Lord spoke about the retailerI am thinking about the small corner shopobtaining a small invention. I believe that in some of the literature we have read an American lady had a cup that could not be upset. He may be thinking about something like that. However, I recall that her invention was not stolen but removed and used by manufacturers in, I think, Taiwan.
What would happen if an inventor or someone who produced a particular product finds that a retailera small corner shophas a supply of infringing articles? Is the first stop for a fairly small inventor, who has registered his patent or is registering his patent, with the retailer or the wholesaler, who I presume would be the importer into the United Kingdom? What are the reasonable steps and who would take them? If the case was beautifully presented, my small corner shop would use the wise words of the judgment on planning permission in the Court of Appeal, but I am sure that that is over the head of every small retailer of the kind where we go every morning to buy our newspapers.
The noble Earl said: In moving Amendment No. 13, I shall speak also to Amendments Nos. 14, 18 and 19. The amendments seek to take out anything relating to infringement in Clause 12. We understand why Clause 12 has been introduced but we do not believe that it is the best way of dealing with the problem.
Various organisations have expressed the view that they do not believe that the Patent Office has the competence to decide on infringements, especially in complex areas such as biotechnology. Many have also expressed the view that the inventive step does not get enough analysis at the Patent Office at the time of grant, which further compromises its ability to decide on infringement. The fact that subsection (4) of proposed new Section 74A states,
Lord Lyell: I support my noble friend's plea. I am a trifle worried about biotechnology and science moving ahead quickly. I wonder whether the provision as drafted will be adequate in the circumstances. My noble friend presented a good case; I look forward to hearing what the Minister has to say.
Lord Razzall: I support the amendments, for which we are again grateful for the assistance we have received from the Law Society of Scotland. Let us not delude ourselves that an opinion given by the officewhich is not binding but is merely an expression of viewwould not be extremely material in a dispute. The concern is that a well funded and well informed company will make a pre-emptive strike when it sees trouble ahead and will initiate an uncontested proceeding in order to obtain an authoritative opinion from an organ of the state. In most cases, that would undoubtedly have the purpose of disadvantaging a prospective adversary.
Lord Sainsbury of Turville: I shall speak to Amendments Nos. 13 to 19. The purpose of Clause 12 is to provide an interested party with a reliable and realistic assessment of the validity and/or infringement issues that could arise in a possible dispute. We hope that access to an opinion may prove useful in settling disputes.
An opinion may provide an independent view of certain facts that will help inform a negotiated settlement. Sometimes an opinion may be useful even where there is no current dispute. For example, an opinion might provide a person with an assessment of certain facts relevant to the risks of undertaking an activity that might infringe a patent. That could be useful before the person decides whether to invest in that activity. However, opinions are not binding; no one has to seek one; and no one will be prevented from seeking to have his dispute settled under existing procedures provided by the 1977 Act, either before the courts or before the Patent Office.
We will not be forcing people to settle their patent disputes by that new procedure. However, that additional procedure could play a useful role in helping business to assess matters relating to patent rights. It must be viewed in that context: it will be an option that people will have to get an opinion. I do not see that getting an opinion would give one an enormously strong position. It would depend on the circumstances and what was the opinion. That is why we see no need for everyone to agree for it to occur.
In many cases, validity and infringement issues arise in the same dispute. One party could request an opinion on whether a particular patent owned by a second party was valid. The second party might then want to know whether the activity proposed or being carried out by the first party was an infringement of his patent. Permitting opinions to be sought on both issues is not only fair but more likely to enable both parties to make a decision about what to do based on an assessment of all the relevant facts.
Removing the ability of the Patent Office to issue opinions on infringement issues would significantly weaken the value of the opinion procedure. Its effectiveness will depend on its ability to offer a rapid and reliable assessment of all the possible issues that might arise in the dispute so that the parties can make a realistic assessment of their chances of success and whether a negotiated settlement might be the best option.
I believe that the reason behind Amendments Nos. 13 and 14 is a concern that the Patent Office does not have the expertise to consider issues of infringement. However, let me reassure noble Lords that the Patent Office has experience in dealing with issues of infringement. In this context, I do not see why biotech should be treated any differently, as it is as much part of what the Patent Office does as other technologies. Patent Office staff deal with such issues when considering applications under Section 71 of the 1977 Act for a declaration of non-infringement. Such declarations are legally binding and indicate that the activity they relate to does not infringe a particular patent. Furthermore, the commercial services provided by the Patent Office, through its search and advisory service, include infringement searching. In 2003, for example, 21 such searches were carried out for commercial customers. Demand for that service continues to grow.
Moreover, we envisage that the opinion procedure will be essentially paper-based, with the activity that might infringe a patent presented either in a description and/or drawings. Assessing whether what is disclosed in such written evidence is within the scope of the patent claims, which would be necessary in order to provide an opinion on infringement, is in many respects analogous to assessments that patent examiners make during the pre-grant search and examination process.
As I have already explained, the purpose of Clause 12 is to provide an interested party with an early assessment of the validity and/or infringement issues that could arise in a possible dispute. That is what the opinion procedure adds to the existing remedies available for settling patent disputes, where the outcome is binding. The procedure is totally new for people to use if they want, and we believe that it is possible to make the procedure attractive, because the outcome is not binding.
If the outcome were binding, as would be the case with Amendments Nos. 15 and 16, it is hard to see what it would add to the range of existing remedies. For example, a person who wants to obtain a binding decision about the validity of another person's patent can essentially seek that through the existing revocation procedures. I cannot envisage that a binding procedure would be particularly attractive for patent proprietors to use in respect of their own patents. Moreover, if the outcome is to be binding, parties will want to use the best representation that they can afford, put all their evidence on the table and seek cross-examination and discovery, just as they do in full-blown proceedings. I cannot, therefore, see how the amendments would help to provide a procedure that is a genuinely new departure.
Amendment No. 17 would also result in a procedure that does not give a rapid assessment of facts relevant to validity or infringement. If all parties can seek a hearing on whether the procedure should take place, there may be little chance of an opinion on the issues being produced in a timely fashion.
Amendments Nos. 18 and 19 would remove paragraphs (c) and (d) from Section 74B(2). Those paragraphs provide some essential flexibility in how a review process might work. In some cases, a review might involve a detailed assessment of all the relevant facts, where both the patent proprietor and the person who originally requested an opinion present detailed evidence and arguments. In such cases, being able to treat the review as proceedings which could, for example, lead to revocation of the patent, makes sense, as all the relevant issues will have been considered fully. The alternative, with paragraph (c) deletedas proposed by Amendment No. 18would be that all the arguments might have to be heard again in separate proceedings.
Removing paragraph (d), as proposed in Amendment No. 19, would ensure that the outcome of a review can always be appealed to the patents court. However, that will not be appropriate or necessary in all cases. For example, if a patent holder is successful
Under the proposals in Clause 12, a patentee can obtain an opinion from the Patent Office, but the office bears no liability if it gets it wrong. However, if a patentee obtains an opinion from counsel, there is some professional liability, although I admit that it can be difficult to exercise. However, good counsel ought to play the devil's advocate and look at both sides of the matter.
The noble Lord spoke of the experience of the Patent Office in determining infringement cases. On a previous amendment, the Minister pointed out that the Patent Office can bring in outside experts in the art, but what of the costs involved? How much would those opinions cost to obtain? Perhaps the Minister can give us some idea of how much a patentee might expect to have to pay for an opinion from the Patent Office. I shall resume my place if the Minister wants to respond.
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