Clause 10 - Compensation of employees for certain inventions

Patents Bill – in a Public Bill Committee at 2:30 pm on 15th June 2004.

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Question proposed [this day], That the clause stand part of the Bill.

Question again proposed.

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

For the convenience of the Committee, I have decided to select starred amendment No. 15 to schedule 2.

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

We were discussing clause 10 and the issue of employee compensation. The right hon. Member for North-East Hampshire (Mr. Arbuthnot) queried the need for provision for employee compensation and asked why it is limited to patented inventions.

Existing law on employee compensation has its basis in the Banks report of 1970, which came to the conclusion that to create more successful UK businesses provision should be made to encourage and motivate employees to be more innovative. Provisions in the Patents Act 1977 were decided by Parliament following a long period of discussion and consultation involving, among others, trade unions and employers' representatives.

If the employee compensation provisions were not limited to an invention that has been patented, we would expect many disagreements about when compensation might arise. It is clear what a patented invention is, as the scope of the invention must be clearly defined in the patent claims. What constituted a non-patented invention would, by contrast, not be clear.

We would not want to stand in the way of any employer who sets up a scheme for rewarding employees for any contributions in the workplace, however measured. However, it is not the place of patents law to cover what approach should be taken for inventions that are not patented, or for any other contributions in the workplace. In any event, the practical effect of the current provision has been to encourage businesses to put in place broadly based reward schemes for their employees.

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

I am grateful to the Minister, but that was completely unconvincing. I castigated the hon. Member for Weston-super-Mare (Brian Cotter) for

attempting to introduce an innovative change to the Bill without consultation. The logic of what I was saying was that one would have to change the 1977 Act to get rid of the whole of the employee compensation provisions, which I would ideally like to do. The Bill is not the place to do that, however, so I am content not to divide the Committee on the clause.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Clause 11 ordered to stand part of the Bill.