I want to draw attention to the effect on the British Patent Office of the proposed European Patents Convention.
The Statute of Monopolies of 1624, which was passed in the latter part of the reign of James I, is the basis of the patent law of the whole world. Patents developed and develop their complexities and characteristics in this country. At first people were given straightforward monopolies, without having to disclose the secret nature of their discovery, but from the time of Queen Anne they were required to register the nature of their discovery in return for being grained a monopoly in the use of it. From that time something in the nature of a patent office came into existence as a register of those specifications, but the Patent Office as we know it today dates from the Act of 1883.
It is, I do not hesitate to say, the outstanding patent office in the world. More patents issue from the United States office, which is not surprising in view of the population of that country. Numerically, France causes more patents to issue than we do, but the comparison is not a true one because in France one gets a patent for the asking, whereas one certainly does not in Britain. An application is scrutinised. A search is made to check its novelty. Applications may well be refused. Ignoring France, the numerical order is: the United States, Great Britain, Germany, and other nations thereafter.
The Patent Office here is not only old but it is large and extremely important. There are in it at present about 520 examiners of patents, and the total staff is about 600. Around the Patent Office in London, now in the City, there have grown up 650 patent agents, with all the staff in their offices, and the practice which has developed in this community in Britain is eminently practical and efficient.
To be granted a patent one has to provide proof of novelty, but the question of utility of the discovery is left, in our practice, to the operation of the market, which seems an eminently sensible way of doing it. About three-fifths of applicants are granted patents. There is a vast library of specifications and of patent lore.
Germany, the country with the next greatest number of patents, following Britain—ignoring France, as I say—requires proof of utility as well as proof of novelty. This has resulted, and still results, in appalling delay in the consideration of patent applications and to what amounts to virtual breakdown of the system. One can imagine the impracticality of a system which requires a patent examiner, who no doubt acquires great skill in his particular work, passing judgment on the utility, commercial or industrial, of an invention. It is difficult enough for one person, however experienced, to have to decide on novelty. In Germany, in the end—and it is a long end—eight applications out of every 10 are rejected.
In Europe, therefore, the British patent system and the British Patent Office have primacy not only in history and in numbers but in facilities, accumulated skills and convenience and speed for the user.
Under the present world system, patents are national and cumulative in the sense that, if somebody wants a patent, he applies for it in Britain, and if he wants one in other countries he applies there and gets separate letters patent in each. One can see, therefore, the attraction in any proposal for a unified patent system, if not for the whole world, at least for a particular area such as Europe.
In 1969 a European convention on patents was held. It was called by the High Commission of the Six, but it was a general convention of 21 countries, with such bodies as the Council of Europe also represented. In 1972 in Luxembourg, three years after the initial convention, a conference of representatives of those nations drew up a draft convention or treaty. This not merely dealt with the substantive law of patents but also included the constitution, the siting and even the staff of a European Patent Office. That office, astonishingly enough, was to be in Munich.
The draft convention comes up for final consideration, and probably for signature, at a diplomatic conference to be held in Munich in September. Therefore this matter, with all its implications for the British Patent Office, British patent practitioners and Britain's national interest, will all be decided before the House returns from its Summer Recess.
Another agreement signed in Munich in 1938 has often attracted condemnation, though not from me. Any diplomatic defeat sustained then will be as nothing to what is to be apprehended this autumn in the same city. The national patent offices would be graciously allowed to continue for the issue of purely internal patents, but their decline and virtual extinction would be inevitable. Under the draft convention, searches would be delegated to an office in The Hague; so the Dutch would not suffer very much. Examination and grant would be in Munich. Thus applications for European patents, 60 per cent. to 80 per cent. of which are in the English language, would be handled in Germany and Holland.
There have been Questions about this in both Houses of Parliament. The ministerial answer is that it has been arranged that one-third of the work will be subcontracted to London for a period of 15 years; so the rundown here will be gradual. No such thing has been arranged. The draft treaty provides that the Munich office may—not must—delegate up to a maximum of 40 per cent. of applications for primary processing in national offices for a period of 15 years—not more than 15 years. As most of the work is in English—60 per cent. to 80 per cent. of patent applications are in English—30 per cent. of the applications might come here, but it would be entirely up to the Munich office how much was farmed out. Anyway, it is provided that the amount so subcontracted or delegated should fade out in the last five years of the maximum period of 15 years.
Therefore the business of processing and granting predominantly English language patents would be done in Germany, it having been handed to Germany on a plate by agreement. The consequences of this for applicants for patents are that their applications drawn in the English language would go to be considered in Holland and in Germany, often by people whose mother tongue was not English and who were considering documents of extreme technicality and usually of great precision. Judgment upon the merits of those applications would be passed, and on the whole passed finally, by individuals who did not speak as natives the language in which the applications were drawn up. That would be the fate of not just a majority but an overwhelming majority of the applicants for patents in Europe.
They would also be subject to far greater delays than they have experienced in London. I do not suggest that the consideration and issue of patents is a process noted for its celerity anywhere. There are delays, but delays in London are as nothing to those which have been experienced in Germany and which, one would assume, if it is to take over the consideration of patents in a foreign language, will be surpassed by the delays to be experienced in future.
Then there are the consequences for the staff of the Patent Office in London. Probably 300 of the 520 long-skilled examiners will have to be faded out. It will probably be suggested that by this process of delegation from Munich the running down of the British Patent Office can be achieved by natural wastage, by not replacing people as they retire. Even if that was so, I would find it cold comfort. But these events cast their shadows before them. The 520 people, seeing what is about to overtake them and their historic office, will naturally be making such other arrangements as they can. Promotion in future in the London office can hardly be what is has been in the past.
There is a continuing growth of patent applications. The office is desperately short of staff because it is losing staff and cannot recruit them. One may see advertisements in the Press—almost desperate advertisements—for honours graduates with the right skills and experience who are being offered by the Patent Office a seven-year engagement with no prospects beyond that. Nothing is said about promotion prospects because there can be none beyond that.
It is said that Munich will want at least 100 English-speaking patent examiners—but not for two or three years or any other short engagement. That does not do for this kind of work. The examiners examine and decide matters with not much in the way of an appellate procedure. Patents are very important matters; sometimes they are of immense value. Therefore, what the staff are being and will be offered in Munich is a life engagement, and very few of them—only 10 so far, I am told—want to leave Britain, set up home in Munich and live there throughout their working lives, with their children growing up as young Germans. Yet that is the prospect being calmly offered to this matchless staff which has been built up in Britain over the generations in the home of patents.
Finally, there are the consequences to this country. It is useless to say, and I hope that it will not be said, that it does not matter that the unified patent office will be in Munich and that people can apply to Munich. Life does not work like that. Geography matters; propinquity matters.
There is all the difference in the world between slipping across the way from a patent agents' office to the Patent Office in London, talking things over with the examiner and then dealing with the application, and, on the other hand, taking an aeroplane to Munich and seeing the examiner there—and perhaps he will not be an Englishman anyway—and then coming back. There is the fare; there is the time; there is the impediment to all involved as distinct from slipping across the road.
It is futile to suggest that the centre of patent issuing, patent examination and patent processing, all of which is highly skilled work and of immense value, will not pass from London to Munich, and, unless something is done, pass irrevocably. Nor is this a matter only for those involved in that kind of work. I say in passing that I am not involved in that kind of work. I have simply come to hear of it and thought it right to take it up.
There is more to it than that. It may be of great national significance that the centre of patents should be in Germany and not in Britain. In modern industrial life patents are extremely important, and in the years before the Second World War the Germans made tremendous play with patents, in which they acquired a particular position. Certainly in Europe they are our principal industrial competitors, as they are in many other world markets. We cannot fail to lose, and lose materially, if the metropolitan place for the issue of patents is no longer London but is Munich.
I ask my hon. Friend the Under-Secretary, and through him the Government, that our representatives should go to Munich in September and, to put it bluntly, put up a better fight than they have before. It is not a criticism aimed at the present Government. The first scheme was made in 1969 by their predecessors. But this is not a matter for making party points. A great national interest is at stake, and in Munich in September we should refuse to sign the convention unless certain changes are made in it.
It makes sense on the merits that the principal Patent Office should be in London when about 70 per cent. of the applications that will be considered are drawn in English and come from the United States or elsewhere in the English-speaking world, or from countries such as Japan for which the international language is English. If that is beyond the negotiating capacity of my hon. Friends, the very minimum they should seek is the existence of a permanent sub-office of the European Patent Office in London where at least the English language patents could be processed, even if the ultimate issue of the grant were deemed to come from Munich. That is the only thing that would provide a continuing career in London for expert patent examiners and patent agents who are so highly skilled and all of whom represent a major invisible export for Britain. A very big revenue which comes in this way is about to be thrown away.
Those are the targets and the prizes for the negotiations at Munich in September. I hope my hon. Friend will tell the House that our representatives will go there with these matters in mind and that they will not be satisfied with any loose arrangement-not undertaking-for some kind of delegation for a maximum of 15 years, but that the primacy of the British Patent Office will be preserved permanently through the insistence of the British Government.
I congratulate my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) on drawing the attention of the House to a problem which both he and I know, whilst having limited public appeal, has created a considerable amount of concern among people within an old and honourable profession who have been dedicated to a certain line of work in ably pursuing their calling.
I also congratulate my hon. and learned Friend on the historic background that he spelt out in his speech. I found it most interesting. Indeed, it went further than some of my own briefing. I also join him in paying tribute to the British Patent Office and all that it has done over many years.
I should like to pick out a few points from my hon. and learned Friend's speech. First, there was no indication whatsoever that there could be any benefit at all from the European Patent Convention and the signing of it.
I wanted to highlight that point. There is a considerable attraction in that for people applying for patents. I should declare some interest. In the past, when in opposition, I was associated with companies which had to do that. There is a benefit in being able to apply for one patent which will be applicable throughout the whole of Europe. Having to apply to register and for the necessary examination of a patent within a number of countries in Europe can be complicated, time-consuming, expensive and, indeed, tedious. Therefore, there are some benefits within the moves that the Government feel that it is right to take.
The European Patent Convention will be signed this autumn, and a committee will then be set up for the purpose, among other things, of drawing up plans for the opening of the European Patent Office and the recruitment of its staff. We will then have a firmer idea than I am able to give at the moment as to the timetable of operations.
At present it is expected that the European Patent Office will open for the receipt of patent applications in 1977. There will then be a progressive build-up over the next five years before the new office becomes fully operational. It is therefore unlikely that the full impact of the European patent system will be felt by the United Kingdom office until sometime in the 1980s. Therefore, in assessing the impact many indefinite factors have to be taken into account. Among these are the rate of growth of European patent applications—whether the European filings will increase quickly or more slowly along an exponential path; the rate of reduction in the filing of United Kingdom applications—because these will decrease because of the benefit of the European Patent Office; and whether industry will be content to file the European way or will prefer to file nationally also. Another factor is whether the rate and nature of future recruitment will be affected. The loss of staff through transfer to the European Patent Office is another aspect of some considerable importance. Retirements, too, will have a considerable effect in this long time scale in view of the problem of staffing mentioned by my hon. and learned Friend.
It is clear in view of these many factors that estimating the effect of the European patent system on the United Kingdom office is not without its difficulties. But doing the best I can and assuming that the European system is well received by industry-and if we are to have a European system we should urge that it is well received-our present thinking is that the number of United Kingdom applications, currently running at about 50,000 a year, will probably drop to about 18,000 to 20,000 a year. The result of that would be that there would eventually be examining work on United Kingdom applications sufficient only for an examining staff of 250 to 300, compared with the current strength of 600.
I accept immediately that a major factor must be protection of the staff, all of whom have first- or second-class honours degrees, or the equivalent. However, we should expect to be entrusted by the European office with examination work on European patent applications which would be done on an agency basis. This work, which would be of considerable assistance to the patent profession and to United Kingdom industry, particularly during the important formative years of the new system, should be available to the United Kingdom office for a period of 15 years from the opening of the European Patent Office. It could amount to one-third of the European patent applications which would be filed.
It could be argued that way, but these are the facts and we must realise what is and what is not possible.
The agency work, together with a properly balanced programme of recruitment, should be able to cushion the staff entirely against the effects of the introduction of the European system. I am not saying there will not be difficulties in the United Kingdom in adjusting to the new circumstances, and I appreciate that the whole question must be kept under review. Nevertheless, I believe that it will be possible for the United Kingdom office to continue as a viable organisation at such a reduced level, and the Government have no plans to close it. I want to scotch the rumour to that effect.
It is important that British industry and inventors should continue to have the option to apply for a national patent, but we cannot judge how many will prefer to make their first application for a British patent before going to Europe.
I come now to the question of the siting of the unified patent office. The argument for London is very strong, and of course the Government would have preferred the office to be in London rather than in Munich. There is nothing wrong in my making that clear. Nevertheless, whether the office were in London or in Munich, the staffing proportions would be the same. Therefore the idea that, if the office were in London, more English-language staff would be available because more patents would be lodged in English does not hold water. The proportion of English-language staff would be the same. It is likely to be 20 to 25 per cent., and there is about the same number of German staff in Munich.
I said 20 to 25 per cent. This is taking into consideration the figures which may arise in a number of years' time. This is one of the advantages of the United Kingdom Patent Office working on a 15-year plan.
There is one other factor to be considered. It would not be fair to suggest that there must automatically be more delay because of European registration rather than London registration. I am sure my hon. and learned Friend will accept that we shall work for the efficient organisation of the European structure.
My hon. and learned Friend was wrong to say that the European Patent Office had been handed to the Germans on a plate. That is not the case. We argued strongly for London as the centre but, after consideration by all the European nations concerned, Munich got the vote. It would surely not be right to refuse to sign the convention purely because the European Patent Office cannot be sited where we personally would like it to be sited.
I thank my hon. and learned Friend for raising this matter, and I hope that my remarks will assist the many people who are honourably and properly concerned with this new innovation in Europe.