New Clause 2 - Two patent grant system

Patents Bill – in a Public Bill Committee at 3:30 pm on 15th June 2004.

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'(1) After section 17(7) of the 1977 Act there is inserted—

''(8) If the patent application has satisfied all the conditions of the preliminary search and any supplemental search, the comptroller will issue a preliminary patent.

(9) On issue of a preliminary patent, the comptroller will also issue an option for a substantive examination which shall remain valid for a period of three years from the date of grant of the preliminary patent.

(10) In the event that the inventor or joint inventors as described in section 7 subsection (2) above exercise their rights under subsection (9) above within 30 days of the grant of the preliminary patent, a substantive examination will take place without undue delay.

(11) Neither the Secretary of State nor any officer—

(a) shall be taken to warrant the validity of any preliminary patent granted under this Act or any treaty or international convention to which the United Kingdom is a party; or

(b) shall incur any liability by reason of or in connection with any preliminary examination or investigation required or authorised by this Act or any such treaty or convention, or any report or other proceedings consequent on any such preliminary examination or investigation.''.'.

(2) Section 116 of that Act is omitted.

(3) In section 18(2) of that Act, after ''view of'' there is inserted ''the state of the art and''.

(4) In section 18 of that Act in subsection (4) after ''him a'' insert ''full''.'.—[Malcolm Bruce.]

Brought up, and read the First time.

Photo of Malcolm Bruce Malcolm Bruce Shadow Secretary of State for Business, Innovation and Skills, Shadow Secretary of State for Trade and Industry

I beg to move, That the clause be read a Second time.

The new clause is intended to deal with what people might call vanity patents, whereby people try to record a patent simply to say, ''I am an inventor and I have secured a patent'', rather than to apply it commercially. If there were a two-stage process, we could simplify the procedure and ensure that all commercial patents got the full treatment. On Second Reading, my hon. Friend the Member for Weston-super-Mare revealed that vanity patents of somewhat dubious character have gone through the whole process. The serious point is that the new clause intends to create a two-stage patent grant system that will free up time spent on vanity patents.

As we have discussed, obtaining a patent can be expensive. Official estimates suggest that it can cost around Euros 50,000 to obtain a patent in the EU. A small firm will have to pay the Patent Office hundreds of pounds to endorse their invention in a process that can take more than three years. A patent holder wants to be confident that the patent that he has purchased is worth the paper it is written on and will not be endlessly challenged.

Vanity patents mean that the Patent Office is diverted and has to spend much time examining ideas that were never intended for commercial use. We discussed some of the more ridiculous ideas on Second Reading, and there may be one or two more. Patent No. 1047735 is a plan to

''get snowballs of 10 ft in diameter to run down mountains in Antarctica, attaining speeds of about 500 mph, then being piped to Australia where they could be used to solve the world's famine problems.''

That is a genuine patent with its own number. Patent No. 1426698 is a plan for

''an automatic defence deterrent to solve the cold war problem'', which has been solved by other means. It would work by the UN placing

''nuclear bombs on three earth-orbiting satellites. If those satellites detected that one of the superpowers had been nuked, the bombs would automatically drop on Washington, Moscow and Peking, thus ensuring mutual destruction of all three.''—[Official Report, 7 June 2004; Vol. 58, c. 422.]

The idea that the Patent Office has spent serious time considering that as a piece of intellectual property that should be recorded and given a due number demonstrates that we do not need to use such resources, at least not to their full extent.

The Patent Office has suffered from a lack of resources in the past. To explain its rationale for contracting out several patent examinations to Denmark in March 2002, it admitted that the decision was

''part of wider efforts to deal with the rising input of patent work, which has, so far, not been matched by our ability to recruit and retain examining staff.''

My proposal is for a two-stage patenting process, which practically exists already. The Patent Office currently performs a preliminary search, and, subject to the patentee's agreeing to a full search and further fees, a full search is performed. Rejection can occur at a preliminary stage as well as later. The proposal for a two-stage patenting proposal allows the Patent Office to issue a preliminary patent grant certificate that should meet many of the needs of vanity patenting. As a full search has not been conducted at that point, the Patent Office cannot then be held responsible for any prior invention that it may have missed in the process. The new clause covers that point.

Under the proposal, a full search would be initiated only by those who seek a full patent, which could then be exploited for commercial purposes. This time, the Patent Office would be bound by the new clause to do its work thoroughly, because it would be held responsible for any errors made. In other words, the preliminary view says, ''Yes, you have a clever idea; you can record it.'' The thorough view, which follows,

says, ''We have now done an exhaustive search, and you have a commercially protected patent, which has the full status of patent protection.'' We contend that such a proposal could free the time of the patent office to examine commercially viable inventions, and give those patent holders more confidence in the service that they are buying when purchasing a patent.

The new clause makes a simple point. We could all list the endless ridiculous patents that have been recorded, but the point is that they are harmless if they do not take up too much time and effort and can be dealt with in a simple way. It is absurd that an awful lot of time and effort seems to be expended on recording those patents, and that there is no distinction between a vanity patent and a serious commercial patent. I would be interested to hear whether the Minister agrees that that is a real problem, and whether there is a system, such as that in this new clause, that would meet the needs of inventors who want their inventions recorded for posterity, while concentrating the resources of the Patent Office where they are most needed, ensuring that commercial patents are properly explored, processed and protected.

Photo of James Arbuthnot James Arbuthnot Shadow Secretary of State (Trade and Industry) 3:45 pm, 15th June 2004

The hon. Member for Gordon speaks to this apparently minor new clause very engagingly. However, he concentrates on the issue of least importance in the new clause, namely the vanity patent. The issue of greatest importance is that the Patent Office would have its immunity removed by section 116 of the 1977 Act. The Patent Office would be immune only in relation to vanity patents. The issue that the hon. Gentleman is creating is that the Patent Office is to be liable for all patents except vanity patents.

That would be an interesting development, and I am not sure what effect it would have on the Patent Office, but I am sure that the response of the Chancellor would be one of deep concern. I am surprised that this contingent liability that the hon. Member for Gordon would create in the new clause has not been ruled it out of order—since your decision is always right, Mr. Amess, I am sure that it is in order. I will be interested to hear what the Minister says about it.

Photo of Paul Flynn Paul Flynn Labour, Newport West

Very engaging examples have been given by the hon. Member for Gordon, but the suggestion of a patent for three nuclear weapons in space sounds similar to a proposal by a past American President; it is of similar practical value. The difficulty would be finding people who decide which are the vanity patents and which have some practical application. I do not think that the Patent Office has any record of making decisions of that kind; it makes decisions on originality and on whether there are other examples of the patents around, but I do not think that at present it has the training or skills to make judgments on practicality.

If the new clause were accepted, there would be a new opportunity for a new grade of patent examiners to decide whether to have a vanity President of the

United States, or other such crackpot suggestions. However, that would mean major extensions of the skills required at the Patent Office.

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

As the right hon. Member for North-East Hampshire says, the hon. Member for Gordon is very engaging, and I almost wish that I could support what he says. However, again it falls to me to say that we are not happy with his suggestion. I refer not to the way in which he made it, but to its detail.

He wants to put forward a two-tier patent system; we are in favour of a two-stage system, which we believe works. On Second Reading, the hon. Member for Weston-super-Mare gave us example after example of patents that he thought were not appropriate for development. I am sure that, had the time been available, he would have given many more examples.

We feel that the two-stage system is better than the two-tier system. The right hon. Member for North-East Hampshire highlighted one of the main reasons for the objection, as did my hon. Friend the Member for Newport, West (Paul Flynn). The 1977 Act provides two distinct stages in the process of granting a patent. The first—the preliminary examination and search stage—permits every patent applicant to assess the likelihood that he will be granted a patent, after he has the results of the search of relevant prior art. For those who merely want their idea published, the patent application is published after the preliminary examination and search.

The second stage, the substantive examination stage, is for those who assess that it is worth going on to seek the granting of the patent. We believe that the two-stage process is appropriate, and I have to reject the hon. Gentleman's advances.

Photo of Malcolm Bruce Malcolm Bruce Shadow Secretary of State for Business, Innovation and Skills, Shadow Secretary of State for Trade and Industry

I am not entirely surprised, although I would like to make two points of clarification. The idea is that people who wanted a vanity patent should be able to register it through a one-stage process. I say to the right hon. Member for North-East Hampshire that removing the exemption would enable us to say, ''That is the deal; we are not liable because we have not gone through the whole process.'' That would not cause the Chancellor of the Exchequer concerns, because there would be no liability.

The Minister is right to say that, in a sense, the two-stage process exists. I made that point; however, there would be a patent only if both stages were gone through. We were asking why we should not allow people to register a patent through the first stage, without any liability on the part of the Patent Office, to enable them to register the vanity element, while requiring the full process for anybody who had a serious intention for their patent.

The judgment would be made by the person making the application; they would have to consider how seriously they wanted their patent to be taken. If they could get a patent number that said that their idea had been registered, that would satisfy their vanity; only if their idea needed commercial application would they need to take it forward. However, at the moment, the

silly patents that I gave details about have to go through the whole process to get a patent number and be duly qualified as patents.

There was a serious point behind the new clause, and a serious intent to reduce the work load of the Patent Office. The problem is that some people are so vain that they will insist on going through the whole process and take up Patent Office time. I am more than happy to withdraw the new clause, but there was a serious point behind it: to try to reduce the work load and deal with the needs of the kind of people—home inventors, perhaps—who have the desire to register their inventions, but do not necessarily need to go through the whole process as they do now. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

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

Thank you, Mr. Amess, for your chairmanship, which has taken us through the Bill speedily, but effectively and efficiently. I thank the Committee Clerks, Hansard, the police and Committee members, particularly the right hon. Member for North-East Hampshire and the hon. Members for Gordon and for Weston-super-Mare for their support in ensuring that we got through the Bill,

not only during Committee, but on Second Reading. It was properly examined, and they raised issues that I will take back with me.

The spirit of the Bill has been to examine what works best, and to ensure that United Kingdom patent law is in line with the European situation and that we do everything in our power to make things easier for inventors. I congratulate Committee members, particularly my hon. Friend the Member for Newport, West. The Patent Office is situated in his constituency in Wales, and he spoke eloquently about its quality.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

I call Mr. Arbuthnot.

Mr. Arbuthnot rose—

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

If the right hon. Gentleman will forgive me, I have one more thing to add. He will appreciate that I nearly made a serious omission that could cost me my political career. I almost forgot to thank the Whips on the Government and Opposition sides. As a former Whip—and I know that the right hon. Member for North-East Hampshire is also one—I know how much pain would have been caused to me had I not thanked my hon. Friend the Member for Lincoln (Gillian Merron) for the work that she has done.

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

I would do the same, but my Whip is not present. In accordance with the remainder of the Committee, I agree with the Minister's comments and will not add anything.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose at four minutes to Four o'clock.