Clause 10 - Compensation of employees for certain inventions

Patents Bill – in a Public Bill Committee at 11:15 am on 15th June 2004.

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Question proposed, That the clause stand part of the Bill.

Photo of James Arbuthnot James Arbuthnot Shadow Secretary of State (Trade and Industry)

On Second Reading, I said that I did not understand the need for this change. The current law says that where an employee has made an invention that belongs to the employer, and as a result there is an outstanding benefit to the employer, the employee shall be entitled to compensation, provided that the existence of the patent is of outstanding benefit to the employer. The clause changes that so that the outstanding benefit refers not only to the existence of the patent but to the existence of the invention, or a combination of the two.

On Second Reading, I said that I did not understand the basis of the existing law. I do not understand why it is necessary to provide special compensation arrangements for employees who make outstanding inventions, when it is not set down in law that employees who make outstanding marketing contributions to those inventions should get special compensation. I do not understand the current law, still less the need to extend it, thereby extending the anomalies that inevitably already exist.

On Second Reading, I said that if an employee makes an invention and the employer applies for a patent, the compensation provisions arise, but if an employee makes an invention and the employer decides to keep it secret, they do not. The anomalies between inventors, marketers, financiers and all the other employees who contribute to the success of an invention are already bad enough, and to extend them is bizarre. Perhaps the Minister has some frightfully good reasons for that. This is not something on which I would wish to go to the stake, but it requires considerable justification.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs)

The hon. Gentleman is right to raise the issue. I will tell him why we considered the measure again. The principle of the outstanding benefit scheme was first adopted in the 1977 Act after great debate and consultation. I will explain some of the consultation that has taken place this time.

Increasingly, successful UK businesses have a highly skilled work force working in technologically advanced industries, such as pharmaceuticals, telecommunications and those producing computer and office equipment. In those industries, the creativity and inventiveness of the work force is essential to the continued progress and development of companies. Sustaining the motivation and interest of such highly skilled staff is important if such businesses are to grow—

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.