Intellectual Property (Unjustified Threats) Bill [HL]
(Limited Text - Ministerial Extracts only)
Read Full debateWednesday 23rd November 2016
(8 years ago)
Lords ChamberIntellectual Property (Unjustified Threats) Act 2017 Read Hansard Text Amendment Paper: HL Bill 4-R-I Marshalled list for Report (PDF, 74KB) - (21 Nov 2016)
This text is a record of ministerial contributions to a debate held as part of the Intellectual Property (Unjustified Threats) Act 2017 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Minister of State, Department for Business, Energy and Industrial Strategy (Baroness Neville-Rolfe) (Con)
My Lords, I start by saying how pleased I am to bring this Bill to the Floor of the House for the first time. The reforms contained in it support business in driving economic growth and they will help the Government deliver their manifesto commitment to make the UK the best place in Europe to innovate, patent new ideas and set up and expand a business. The Bill’s provisions will make the intellectual property system more easily navigable for rights holders and third parties alike. It will help ensure that rights holders can enforce their IP rights fairly, while preventing the misuse of threats to sue for infringement as a way to distort competition.
As noble Lords will be aware, the detailed recommendations for reform in this area were made by the Law Commission, and I thank it warmly for its thorough and detailed approach to this project, including extensive stakeholder consultation, which has brought the Bill to this House in such good shape.
The Bill has a narrow scope and follows the special Bill procedure available for uncontroversial Law Commission reforms. This procedure included a number of very informative evidence sessions during Committee. I take this opportunity to thank the chair of the Special Public Bill Committee, the noble and learned Lord, Lord Saville of Newdigate, who is unable to be in his seat today, and colleagues on the committee, several of whom are here this evening, for their time and efforts in considering the Bill thus far. Our discussions have been productive and helpful.
The first group of amendments addresses concerns raised by both stakeholders and members of the committee. I believe that they improve the clarity of the provisions, which is a key aim of the Bill as a whole. The first of the amendments would delete “solely” from new Section 70B(1)(a), and the equivalent sections for the other rights. The Law Society has long pushed for this amendment. Both CIPA and the IP Federation also agreed, at the evidence stage, that the term should be removed. I thank the noble Baroness, Lady Bowles, for raising this point during Committee and for emphasising its importance to stakeholders. The intent of the person sending a communication is not relevant in determining whether that communication is “permitted”. This has always been our position and the amendment makes it even clearer.
The second family of amendments in this group also relates to the permitted communications provisions. A common complaint is that, under the existing threats law, there is no guidance on what type of communication is allowed and what is not. It is therefore easy for rights holders inadvertently to fall foul of the threats provisions.
The subsections in issue provide guidance on what types of information are necessary for a permitted communication by providing a list of examples. However, it has become apparent that these subsections are not as clear as they should be. The amendments make it clear that the examples will always be considered necessary for a permitted purpose. A rights holder who wishes to make a permitted communication may confidently provide the types of information listed. The list is also clearly non-exclusive, so appropriate flexibility is provided.
The next amendment addresses an issue raised by the noble Viscount, Lord Hanworth, in Committee. The issue relates to what he termed a “piece of illogic” in new Section 70C(4) and equivalents regarding the reference to “T”, curiously used to refer to the person who made the threat. To solve this problem, we have simply opted to remove the reference altogether and substitute it with a reference to the person, which, given its context, clearly means the person who made the threat.
Finally, I come to the fourth set of amendments in this group. These seek to amend new Section 70E and equivalents to clarify the position in relation to pending rights, particularly with reference to the justification defence available to the rights holder. As the noble Baroness, Lady Bowles, highlighted in Committee, expert stakeholders have concerns with the current drafting on this point. This family of amendments—a term that the noble Baroness kindly invented in Committee—addresses these concerns by stating explicitly that the question of whether there has been an infringement will be determined on the basis of the IP right once it has been registered or granted. I hope that this deals neatly with the comments from the noble Baroness, Lady Bowles, on this issue.
Baroness Neville-Rolfe
Lord Hope of Craighead (CB)
My Lords, perhaps I may take this opportunity to say on behalf of my noble and learned friend Lord Saville of Newdigate, who chaired the Special Public Bill Committee, how much he regrets that he is not able to be present at this stage of the Bill. He has authorised me to say that he, having read all the amendments, fully supports them. The fact that they have been brought before the House in this way indicates the hard work that the committee did, and the Bill will no doubt be greatly improved by their being moved.
Baroness Neville-Rolfe
My Lords, I thank the noble and learned Lord, Lord Hope of Craighead, my noble friend Lord Lucas, the noble Baroness, Lady Bowles, and the noble Lord, Lord Stevenson of Balmacara, for their kind and constructive comments. As the noble Lord, Lord Stevenson, said, we all learned a lot. These provisions are indeed an improvement.
Baroness Neville-Rolfe
Baroness Neville-Rolfe
Baroness Neville-Rolfe
My Lords, this group of amendments seeks to address concerns raised in Committee about the practical application of the new threats provisions. These changes amend the discretion afforded to judges in applying the new permitted communication provisions and improve the ability to access the defences available. Both these changes particularly help to address concerns expressed about the challenges of working in an online trading environment.
I turn first to Amendment 3 and its family. The provisions as drafted allow that the courts may treat another, additional purpose as a permitted purpose if that is necessary in the interests of justice. I have now had the opportunity to consider the arguments put forward by the noble Baroness, Lady Bowles, and to reflect further on the evidence given by Mr Justice Birss, Professor Sir Robin Jacob and others to the Special Public Bill Committee regarding the extent of the judges’ discretion in this area. By removing the word “necessary”, these amendments provide additional flexibility to the courts when considering whether a particular communication was made for a permitted purpose. The provisions still give clarity and certainty for those using the system, which is a key requirement for all stakeholders.
The wider discretion afforded to the courts under this amendment allows them to add to the list of permitted communications when appropriate. This would include treating the use of an online form as permitted, if that is suitable in the particular circumstances. This amendment, therefore, helps to address concerns raised about the use of particular online forms.
The next family of amendments relates to the defence available to rights holders, whereby they are allowed to send a threat to a trader, or other secondary actor, who is not the source of the alleged infringement, if a search for the primary actor has been unsuccessful. The amendments deal with two issues discussed in Committee. There were concerns that, first, the bar was set too high to access the defence, and, secondly, this was particularly problematic for rights holders dealing with potential infringements in an online trading environment. Under the current patents law, the test is that the rights holder must have used “best endeavours” to find the source but failed. During the Law Commission’s work, the “best endeavours” requirement was the subject of much criticism. As a result, the phrase “all reasonable steps” was used in the Bill. However, in evidence taken by the Special Public Bill Committee, this phrasing was also described as being too onerous.
As the BBC explained in its evidence, in the face of high-volume, low-value online infringements, the requirement to use “all reasonable steps” would be disproportionate and burdensome. It was therefore suggested that the word “all” should be left out. Compelling arguments were also put forward by the committee’s distinguished chairman, the noble and learned Lord, Lord Saville, the noble Viscount, Lord Hanworth, and the noble Baroness, Lady Bowles. On reflection, I agree that “all reasonable steps” does place the bar too high. The amendment would instead require the rights holder to simply take “reasonable steps” to find the source of the infringement. What is reasonable will depend on the circumstances. The assessment can take account of what it is reasonable for the rights holder to do in an online environment, and what is reasonable in the economic circumstances of the case.
There is a balance here. We need to ensure that we restrict potentially damaging unjustified threats but also that rights holders can take action to tackle infringement online when they need to. I beg to move.
Baroness Wilcox (Con)
My Lords, after being on the committee entrusted by the House with scrutiny of this Bill, I am only too fully aware of what a complex area of law intellectual property is—it is crucial that we get it right. We must ensure that we create a climate as positive as any in the world for businesses to innovate and grow, especially after we leave the European Union.
I thank the Minister for her clear thinking and her ability to make me understand exactly what was going on. I thought when I started that I would never get to the end of it all. However, it was quite amazing: with her experience as a fine civil servant who then transferred over to work in the wild business world, she came back with all kinds of straightforward thinking that I could understand and comply with.
I am confident that the Bill will make a valuable contribution to achieving this goal. It will make it easier for businesses to make legitimate threats to protect their intellectual property and for those businesses subject to unjustified threats to protect themselves. I am particularly glad that the Bill will harmonise the law across different types of intellectual property and make it simpler and cheaper for businesses, especially small businesses, which can often be the most intimidated by threats, to seek legal advice and negotiate before there is a need to involve the courts. The greater clarity created by the new category of permitted communications is most welcome in this regard. The Bill is therefore a significant improvement on the current law and has the potential to make a real difference for businesses in practice.
As a former small business owner who has been subject to threats to sue for intellectual property infringement, a consumer protection representative and a Minister for Intellectual Property, I also understand, however, quite how impenetrable intellectual property law can be for businesses. This is especially the case for small and medium-sized enterprises, which often struggle to understand complex legal points and are least able to afford expert legal advice when they encounter difficulties.
When I was running my small business, I was once contacted by a well-known company in the same industry alleging that I had fringed its intellectual property rights. It turned out that it did not have a leg to stand on from a legal point of view. Nevertheless, the whole episode still caused me and my business a great deal of disruption. While I recognise that I would have been a primary actor for the purposes of this Bill, and therefore not protected by the threats provision, I empathise wholeheartedly with those businesses for which these are crucial protections but for which intellectual property law is incredibly hard to understand.
For this reason, getting the legislation right is only half of the battle. Just as important—perhaps even more so—is how we seek to ensure that businesses understand what is in the Bill and how it helps them in practical terms. If we do not do this properly, we might as well not pass the Bill at all.
While I know from my time as a Minister that the Intellectual Property Office works hard to help businesses understand intellectual property, it needs to ensure that it keeps improving its efforts in this area. It would be unacceptable and a tragedy if even one start-up or SME capitulated to an unjustified threat to sue for intellectual property infringement out of a lack of awareness of the provisions of the Bill once enacted.
I was grateful to the Minister for her comments in Committee on how the Government intend to proceed to make sure that the provisions of the Bill are communicated to business, especially SMEs, so that it has the positive impact in practice that it ought to. However, this is one of the things about which we cannot ever have too much information or too many reassurances. I therefore continue to press the Minister to assist the House and businesses with further reassurances, wherever she can, on this matter.
Baroness Neville-Rolfe
My Lords, I am grateful to the noble and learned Lord, Lord Hope of Craighead, and to the noble Baroness, Lady Bowles, for the welcome they have given to the extension of sensible judicial discretion through these amendments. I also warmly thank my noble friend Lady Wilcox for her very kind words and for her strong support for the Bill, particularly from the perspective of someone who has experienced threats as a small business person. She rightly highlighted the importance of providing appropriate guidance and she may be aware that we have already published some guidance to business. The IPO has got up early in terms of what the reforms could mean in practice. I have copies of the guidance if any noble Lord would like one.
In our debate in Committee I happily committed to communicating to businesses the changes and benefits being brought by the introduction of this Bill. They will form an important part of the IPO’s work and its outreach programme. I know that my noble friend is keen to learn what this would mean in reality, so I can say that the IPO will go the extra mile for SMEs. It will update its popular online tools, publish guidance, add information on the new threats provisions to the range of IP educational materials as appropriate and include presentations about these changes at its outreach events, many of which are of course aimed at SMEs. It will also update businesses via social media channels and signpost users to the relevant guidance. It is crucial that the material produced is clear and accessible, and the IPO will road-test the guidance in draft with small business representatives to ensure that it is understandable. These changes will be communicated direct to SMEs by the IPO as well as by others who provide advice and support to small businesses, which is equally important. The IPO will work with representative bodies to ensure that their members are aware of the reforms. Emails will be sent to those stakeholders who have signed up to receive updates, which will ensure that sources of IP advice such as the patent library network, growth hubs and professional IP advisers are best able to help our SMEs.
The noble Baroness, Lady Bowles, repeated some of the concerns that we discussed at length in Committee. I continue to believe that to include online notifications automatically as a permitted purpose would completely undermine the protection from threats which is at the heart of these provisions. It cannot be right that retailers and others lose all protection from threats simply because those threats are made via a particular medium, in this case online. As I have said, submitting an online form normally results in a listing being taken down, so making online forms permitted would not encourage parties in dispute to talk first since the rights holder could, justifiably or not, prevent at a stroke any further trade in an item. The amendments proposed address the issues in the most appropriate way. The wider discretion that we have given to the courts, which I started with, is useful because it allows the law to evolve as, for example, technology moves on so that over time it can be applied in a clear, fair and appropriate way. In addition we have made defences more readily available to rights holders who need to approach a secondary actor.
The noble Baroness and the noble Lord, Lord Stevenson, talked about online and reference was made to the Digital Economy Bill, which all being well will come before this House on 13 December. We have two amendments today to improve the online situation and I feel that we have addressed the concerns raised in Committee and by the BBC. The amended clauses should therefore be allowed to run. Further, it is only fair to say that we do not have any plans to revisit the issue in the Digital Economy Bill when it comes to this House.
We have made some significant changes to the Bill in response to the concerns that were well expressed in Committee and I hope that noble Lords will feel able to support the amendments before them.
Baroness Neville-Rolfe
Lord Hope of Craighead
My Lords, I am fairly new to this argument as unfortunately I was not able to be present as a member of the committee. Judges faced with the nature of this clause, in looking at the word “instructions”, would give the word a purposive meaning and would tend to look for a specific instruction as a necessary condition even if the words were not expressed in the Bill. For the avoidance of doubt, I respectfully suggest that the amendment moved by my noble kinsman has great force behind it. One would want to put the matter beyond doubt. For what it is worth, I support the amendment.
Baroness Neville-Rolfe
My Lords, I understand that this is an area of concern. I welcome the amendments from the noble Lord, Lord Stevenson, and the noble Baroness, Lady Bowles. I very much appreciate the noble Lord’s constructive approach to the Bill and his commitment to careful scrutiny. I think he said the amendment was probing in nature. I will start by setting out why I remain convinced that the exemption for professional advisers is so necessary, before talking about the specific amendment.
The Law Commission’s consultation demonstrated that the tactic of suing a professional adviser for making a threat has been used to hamper the legitimate client-adviser relationship. This causes problems not only for the adviser but for the client, who may as a result need to find a new adviser. I believe we heard convincingly during the evidence stages that this is a significant and common issue. It leaves rights holders in the position of having to pay indemnities before a legal adviser will write an entirely justified letter on their behalf. SMEs are more likely to be asked for such indemnities and are most affected by them.
I am aware that there were concerns regarding such an exemption, which might give rise to an increase in the use of unscrupulous threats. However, I do not agree for the following reasons. Where the professional adviser is exempt, the instructing client will remain liable. This ensures that recourse is available to those damaged by threats. A legal adviser who advises their client badly, leaving them liable for threats, risks a negligence action. The exemption does not prevent this. The exemption has been carefully and appropriately limited in its availability. The amendment would restrict the protection available for professional advisers to just those who are acting on “specific” instructions from another person.
In an increasingly global market—that was mentioned —we need to capture the many different types of foreign and domestic IP legal practitioner who may risk facing a threats action under UK law. As discussed in Committee, this should clearly include those in private practice as well as “in-house” advisers. For that reason, I do not agree that the exemption principle should apply only to the very limited category of circumstances envisaged by the amendment.
In practice, instructions come in all shapes and forms, written and oral. It is therefore unclear what would be required in order to demonstrate that an adviser was acting on a “specific” instruction. Such lack of clarity about “specific” instructions would be particularly problematic for in-house legal advisers, who are often acting on a general mandate to protect their company’s IP rights. The Law Commission agrees that the amendment risks leaving in-house advisers without protection. I apologise to the noble Lord, Lord Stevenson: I think that that is the response that he was expecting in relation to the amendment.
Lord Stevenson of Balmacara
I thank those noble Lords who contributed to this short debate. It is right that we recognise that there are particularities in relation to in-house lawyers and I take the point made by the Minister that the exemption would be particularly useful for them. It does not get round the fact that this could easily be the thin end of the wedge. While that should not detract from the specifics of what we are discussing today, it would be odd if a very small part of a very small part of the law—while I in no sense diminish the contribution made by this Bill to the greater good—was to be adapted to allow this exemption, which then spread.
Baroness Neville-Rolfe
It may be clearer if I make one final point. My understanding is that the underlying law on agent liability is left undisturbed, so no precedent is being set here for other areas of law which concern agent-client relationships. I recall that being a concern expressed by the noble Lord, so perhaps my making that clear to the House will help him in agreeing to withdraw the amendment.
Lord Stevenson of Balmacara
Yes. The Minister anticipated exactly what I was going to say. We were all looking for some words of reassurance so that those who had to interpret the provisions later would be better informed. We have not had the chance to see the Explanatory Memorandum in that regard. Perhaps we could receive that in correspondence before the final stages of the Bill, so that I might be more satisfied. On that basis, I am happy to withdraw the amendment.
Baroness Neville-Rolfe
Baroness Neville-Rolfe
Baroness Neville-Rolfe
Baroness Neville-Rolfe
Baroness Neville-Rolfe
Baroness Neville-Rolfe
Baroness Neville-Rolfe
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Baroness Neville-Rolfe
Intellectual Property (Unjustified Threats) Bill [HL]
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 13th December 2016
(8 years ago)
Lords ChamberIntellectual Property (Unjustified Threats) Act 2017 Read Hansard Text Amendment Paper: HL Bill 4-R-I Marshalled list for Report (PDF, 74KB) - (21 Nov 2016)
This text is a record of ministerial contributions to a debate held as part of the Intellectual Property (Unjustified Threats) Act 2017 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Minister of State, Department for Business, Energy and Industrial Strategy (Baroness Neville-Rolfe) (Con)
My Lords, before moving the Motion, I should like to take a moment to reflect on the Bill and to say thank you. This is a small Bill of limited scope, but we have taken steps to ensure that it will work effectively for businesses whether in physical or online environments. I want to record my thanks to the Law Commission for bringing its great expertise to this most technical of subjects. Along with the Scottish Law Commission, it played a key role in the development of the legislation.
This has been a delightful new experience for me. It gave an opportunity to see the benefit of the Law Commission special procedure, which ensured that there was both a wide-ranging debate on the key issues and a robust examination of the Bill. The evidence sessions in particular provided access to a rich seam of expertise, and the procedure, having worked as intended, has produced a Bill that is much the better for it. This is a valuable route for much-needed and uncontroversial reform, and the Law Commission has asked me to express its gratitude to the House for the time and care it has given to undertaking its work. That is perhaps code for our careful scrutiny and the amendments we made.
I should also like to take the opportunity to put on the record our thanks to the noble and learned Lord, Lord Saville of Newdigate, for his chairmanship of the Special Public Bill Committee, as well as our thanks to our excellent clerk. I am grateful to all noble Lords for their polite, considered and probing questions. In particular, I thank the noble Lord, Lord Stevenson of Balmacara, for his constructive approach, and the noble Baroness, Lady Bowles of Berkhamsted, for bringing her expertise to our deliberations. I also thank my noble friend Lady Wilcox, a former IP Minister, for her doughty championship of small businesses, along with our Whip, my noble friend Lady Mobarik.
Because of the structure of the Bill, we enjoyed not only the usual groups of amendments but vast families of amendments—a phrase coined by the noble Baroness, Lady Bowles—across the various IP rights. Some of these families were quite large and, like any family, not always easy for outsiders to understand. Some of the families also appeared to be happier than others, but I would observe that we successfully manoeuvred our way through all the complexities.
I finish by putting on the record my thanks to the Bill team, the Intellectual Property Office and my private office officials for their support throughout the process. I believe that the Bill is being sent to the other place in great shape. I beg to move.
Lord Stevenson of Balmacara (Lab)
My Lords, I should like briefly to echo the words of the Minister. This Bill has been a good experience and a novel and, for me, different way of doing Bills—something we might learn from, in fact, as we go forward. The Minister said that there were families of amendments, which was certainly true; and we became a little family as we tried to deal with the rather odd way in which the Bill is organised. That was because, every time we looked at one area, we discovered that we would have to amend the Bill in every other clause as well. We were in some danger of extending the small coterie of your Lordships who actually like IP matters, but that is a danger which I think not many would survive.
Like the Minister, I thank all those who gave evidence both in writing and in person. It was a rich and interesting experience. The Special Public Bill Committee worked very hard, and I would particularly like to thank, in addition to our chairman, the noble and learned Lord, Lord Saville of Newdigate, the representatives from the Labour side, my noble friends Lord Plant of Highfield and Lord Hanworth, who served a noble part on the Committee. I also echo the Minister’s thanks to the Intellectual Property Office and the Law Commission. Lastly, I thank the Minister. She has been rather modest in saying that we had improved the Bill; actually, it was she who took on the burden of heavy lifting not only by daring to go back to her own department and other departments to get clearance for various things, but also by taking on, in full measure, the Law Commission itself—and winning.
Intellectual Property (Unjustified Threats) Bill [ Lords ]
(Limited Text - Ministerial Extracts only)
Read Full debateMonday 16th January 2017
(7 years, 11 months ago)
General CommitteesIntellectual Property (Unjustified Threats) Act 2017 Read Hansard Text Amendment Paper: HL Bill 4-R-I Marshalled list for Report (PDF, 74KB) - (21 Nov 2016)
This text is a record of ministerial contributions to a debate held as part of the Intellectual Property (Unjustified Threats) Act 2017 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Chair
Before we begin, it might be helpful if I remind Members that the Second Reading of this Bill is being debated in Committee, rather than in the Chamber, because it is a Law Commission Bill. Under Standing Order No. 59, Law Commission Bills stand automatically referred to a Second Reading Committee. As this is a Second Reading debate, no Member may speak more than once without the leave of the Committee. Permission is conventionally granted, however, to the Minister moving the motion to do so, at the end of the debate.
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
I beg to move,
That the Committee recommends that the Intellectual Property (Unjustified Threats) Bill [Lords] ought to be read a Second time.
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank the law commissioners for bringing the Bill to the House in this state. It has had a consensual passage through the other place. I recently inherited the role of Minister with responsibility for intellectual property from Lucy Neville-Rolfe, who has gone to the Treasury, and I am pleased to be responsible for introducing the Bill to this House.
The intellectual property regime is crucial to the UK’s economic growth. IP-intensive industries are estimated to generate more than 25% of UK employment and 37% of UK GDP. IP is also vital to protecting and building our strong research base, creating economic growth from our fantastic universities and world-class scientific research. The importance of IP is reflected in our manifesto commitment to make the UK
“the best place in Europe to innovate, patent new ideas and set up and expand a business.”
The Bill is just one of a number of ways in which the Government are taking action to improve the IP regime. We have brought the unitary patent and Unified Patent Court one step closer, giving businesses the option to protect their inventions in up to 25 countries with a single patent. Furthermore, the Digital Economy Bill, which left the House in December, contains important IP provisions, including reforms to the penalties for copyright infringement.
Of course, improving the IP regime is not limited to legislation. The Intellectual Property Office is continually improving its services and increasing the availability of digital IP tools. We also continue to make considerable progress through international harmonisation of IP laws and practice, as well as IP education, outreach and enforcement activities on a number of fronts.
The Bill is of narrow scope but fits perfectly with the Government’s wider work on the IP regime. It gives effect to recommendations made by the Law Commission following in-depth analysis and extensive consultation. The Law Commission is a statutory independent body, tasked with reviewing the law to ensure that it is modern, fair and fit for purpose. Like other Bills resulting from the Law Commission’s work, the Bill follows a special parliamentary procedure that facilitates uncontroversial but important law reform.
I am grateful to colleagues in the other place who have given the Bill their detailed attention. Their enhanced scrutiny, as required by the special procedure, is greatly appreciated. In particular, the Special Public Bill Committee considered detailed evidence from industry, the legal profession, the IP judiciary and others. I am also thankful to the Law Commission and stakeholders who have worked together and with Government to produce and refine these much-needed reforms. As a consequence of those efforts, the Bill comes before us in very good shape.
I will briefly explain the complex and specialist aspect of our IP framework with which the Bill is concerned, namely unjustified threats—that is, a threat to sue for infringement of an IP right where no infringement has taken place or where the IP right in question is invalid. The considerable financial burden of IP litigation means that many businesses seek to avoid it at all costs. Small businesses in particular are disproportionately affected by the drain that such litigation places on their limited time and resources. The mere threat of being sued for IP infringement can therefore drive customers or retailers away from an entirely legitimate business. As a result, unjustified threats can cause significant commercial damage. To combat that, the threats provisions have existed in some form for more than 100 years. They offer much-needed protection and provide appropriate remedies to those affected by an unjustified threat.
Unfortunately, the existing threats provisions are not as effective as they should be. They are overly complex and have developed in a piecemeal fashion across the different IP rights. The law is inconsistent and difficult to navigate as a result, which is why the Government asked the law commissioners to review this area of law in detail in 2012. The Law Commission made a number of detailed of recommendations, which are reflected in the Bill. It substituted new threats provisions for old within the relevant parent Act for the relevant IP rights: patents, trademarks and both registered and unregistered designs. The main clauses repeat the same substantive law across each of those rights.
There are five main parts to each clause. The first sets out a clear test for whether a particular communication contains a threat. The second sets out which types of threat trigger the threats provisions. The third gives guidance on what can be safely said. The fourth sets out remedies and defences. The fifth introduces an exemption so that threats claims cannot be brought against regulated professional advisers acting under instruction.
I hope that the Committee has found that brief explanation helpful. The provisions have been the subject of a great deal of detailed work, including at the Law Commission stage, with a wide range of stakeholders, including the Law Society, and during the Bill’s scrutiny thus far. The new provisions form just one small part of the wider IP regime that is so important for this country’s prosperity, but they are nevertheless worthy and important reforms that will make a real difference to UK innovators, inventors and designers.
Joseph Johnson
This has been a good debate, during which we have been graced by the presence of my hon. Friend the Member for Rugby on his 60th birthday. Inventors and manufacturers in Rugby will have followed our proceedings with interest, and I am glad that they will have heard members on both sides of the Committee express support for the Bill. I am grateful to them for acknowledging that the Government have taken up the Law Commission’s good work. Getting the threats provisions right is important in supporting our creators, innovators and businesses—large and small—and, as I have said, I am grateful to the hon. Members who have contributed to our brief but useful debate.
Turning to some of the points raised, threats to manufacturers or importers and their equivalents rightly will not trigger threats actions. That will allow rights holders to approach the trade source of a potential infringement. Manufacturers and importers are likely to be able to assess whether a threat to sue is justified. Having invested in the product in question, they will also be more willing to challenge a threat, if required. The provisions therefore encourage rights holders to approach the most appropriate person or business while protecting others, such as retailers, from unfair approaches and unreasonable threats. Making threats to primary actors actionable would stifle the ability of rights holders to enforce their rights. We therefore believe that the Bill strikes the right balance, and there is no evidence that stakeholders want that aspect of it to change.
On remedies, the threats provisions are just one crucial part of the wider toolkit available to those seeking to resolve genuine issues, and can be used alongside a range of alternative dispute resolution measures, such as mediation, to resolve disputes without resorting to litigation. For example, the IPO itself provides a flexible, quick and effective IP mediation service, which helps parties who are in dispute to reach agreement. There is simply no evidence that the sensible current remedies are deficient.
Reform of the threats provisions is long overdue, and this small but well-formed Bill will allow us to deliver valuable change now. It will help businesses to negotiate fairly in IP disputes, provide clarity and bring much-needed consistency to the complex area of IP law. I am pleased to have had this opportunity to discuss these issues, and I commend the Bill to the Committee.
Question put and agreed to.
Intellectual Property (Unjustified Threats) Bill [ Lords ] (First sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 24th January 2017
(7 years, 10 months ago)
Public Bill CommitteesIntellectual Property (Unjustified Threats) Act 2017 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 24 January 2017 - (24 Jan 2017)
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Intellectual Property (Unjustified Threats) Act 2017 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I beg to move amendment 1, in clause 1, page 2, line 9, at end insert—
“(c) commissioning a product for disposal.”
This amendment would ensure the commissioner is treated the same as the manufacturer in the case of infringement. This would make it consistent with the arrangement for trademarks.
It is a pleasure to serve under your chairmanship, Mr Nuttall. In my speech on Second Reading last week, I noted that it is essential that the Bill makes sufficient provisions to protect manufacturers from unjustified threats. The Government, in bringing forward the Bill, made the claim that manufacturers and importers of infringing products do more commercial damage than retailers, stockists and customers. It has also been suggested that manufacturers, having invested in the product, are better placed to determine whether a threat of infringement proceedings is justified.
The amendment would ensure that commissioners and manufacturers are treated on an equal footing and go some way to protecting manufacturers. Such an arrangement already exists in trademark law. Any company that instructs or commissions work that applies a trademark it does not own is treated as a primary infringer and can be written to freely. That is not the case for patents and designs. In such cases, the manufacturer is instead treated as the primary infringer. They can be written to freely, but under the Bill’s provisions the person or company that commissioned the manufacturers to do the work cannot be written to without fear of a threats action.
That is perhaps more troubling when we consider the unequal relationship that often prevails in such cases. More often than not, it is a larger company that commissions work and instigates the infringement of a design or patent, while the company carrying out the work is a smaller manufacturer, perhaps a small or medium-sized enterprise based in one of our constituencies. Many of those smaller manufacturers will not realistically be in a position to insist on indemnities in the contracts with the commissioner. We know how unequal contract negotiations often are between large companies and smaller companies in their supply chain. The manufacturer will get dragged into infringement action, as they can be written to freely, but the real prime mover is protected by the provisions in the Bill. As they stand, the provisions allow infringing commissioners to hide behind manufacturers, who would not be protected. This amendment would prevent such circumstances arising and I urge the Minister to accept it.
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
It is a pleasure to serve in Committee under your chairmanship, Mr Nuttall. I thank the hon. Member for Newcastle upon Tyne Central for her amendment, which gives us a chance to discuss this important IP legislation again in more detail. The existing IP legislation defines clearly those acts that can infringe intellectual property rights. It is essential that the threats provisions are entirely consistent with those definitions of infringement. Otherwise, we would create a real mess for businesses in this area. The amendment would mean that threats made to someone “commissioning” an allegedly infringing product will not give rise to a threats action. The person commissioning would be treated in the same way as a manufacturer or importer. However, commissioning infringing goods is not itself an infringing act in any of the existing statutory definitions. That is an important point.
The amendment would therefore create an anomalous situation in which a threat to sue for infringement could safely be made to someone who is not, under the definitions, an infringer at all. There is no situation in which such a threat could be justified. The amendment would remove protection from people who are not actually infringers. That cannot be right. Treating commissioning as if it were an infringement, just for these purposes, would also bring confusion and inconsistency more widely to the law of infringement.
I want to make it clear that there is no inconsistency with the situation found in trademark law, to which the hon. Member for Newcastle upon Tyne Central referred. The provisions in the Bill relating to trademarks do not allow threats to be made for “commissioning”. The phrase
“causing a person to apply”
simply clarifies what is covered by the existing infringing acts in the Trade Marks Act 1994, in line with established case law. The amendment therefore seeks to address an issue that does not exist. For those reasons I ask the hon. Lady to withdraw her amendment.
Chi Onwurah
I thank the Minister for his clarifications and comments. Can he address my central point, which is that small manufacturers are in an unequal relationship with those commissioning the products to be manufactured, and the provisions in the Bill may put them at greater risk than those who are commissioning the infringing product? Will he consider ways in which small manufacturers can be better protected in the circumstances that I outlined?
Joseph Johnson
I am happy to attempt that. Manufacturers will benefit from the way these provisions prevent distortions in the wider marketplace. No evidence has been presented to the Government that stakeholders want that important aspect of the provisions to change. Manufacturers are already given considerable protection by the way in which the provisions prevent threats being made to others. Given that manufacturers are often the worst affected by unjustified threats made to those further down the supply chain, it is their customers who are scared off by threats of infringement proceedings. That is why the provisions allow anyone aggrieved by the threat to make use of the provisions, not just the recipient.
Chi Onwurah
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Chi Onwurah
I beg to move amendment 2, in clause 1, page 2, line 15, after “do,” insert “or claims to do,”.
This amendment deals with people or companies who hold themselves out as the primary infringer: ie, they claim to be the manufacturer or importer of a product (and therefore can be written to freely) when, in fact, they are not.
One of the virtues of the Bill is that it seeks to simplify and improve the workings of IP law and reduce the number of infringement cases brought before the courts for mistaken or outright false reasons. The amendment would enhance that aspect of the Bill by further reducing the scope for unnecessary litigation.
The amendment would allow people or companies that claim to be the primary infringer—that is, the manufacturer or importer of the product—to be communicated with freely by the rights holder, until it is clear that they are not the rights holder. That is a detailed point, and it may seem to be an obscure change, but it is important, otherwise I would not have tabled the amendment.
Under the Bill, the rights holder would not be able to communicate with a party falsely claiming to be the primary infringer, as that would run the risk of triggering the Bill’s provisions. If the amendment is agreed, the provisions would allow for communication from the rights holder until it is clear that the retailer or stockist is not, in fact, the manufacturer. That would reduce the impact on small and medium-sized enterprises—supporting SMEs is a constant theme of ours—and other organisations, because there would be fewer court actions and more such matters would be dealt with in the right way, which is directly between the participants. As such, I argue that the amendment is entirely in the spirit of the original Bill, and I ask the Government to accept it.
Joseph Johnson
In order to provide much-needed protection to retailers and customers, it is crucial that the IP threats provisions encourage rights holders to communicate with the trade source of an infringement. To facilitate that, the Bill sets out a clear statement of those acts that will not trigger an unjustified threats action.
The amendment would introduce circumstances where threats made to those further down the supply chain, such as retailers, would not give rise to an unjustified threats action. Those are exactly the people who should be protected by these provisions. The amendment would introduce the new concept of “claiming” to manufacture or import a product, and that is an inherently vague concept. It would no doubt be very difficult to prove in court and therefore the risk of satellite litigation on the point is considerable. Introducing the new concept would mean less certainty for businesses. It would likely be a long time before they would have clarity from case law about what constitutes “claiming”, and the additional complexity is unwelcome. The aim of the Bill is to help to clarify this area of law and make it easier to navigate.
Critically, the amendment would undermine protection for retailers and others further down the supply chain who inadvertently use ambiguous language, such as a reference to “our new product”. A retailer might easily imply, even accidentally, that it had made a product. Under the amendment, the retailer could lose all protection from unjustified threats. A rights owner may choose to rely on the public statement and issue a threat. By doing so, the rights owner chooses to risk that the recipient may bring a threats action. However, in the very unusual situation in which someone deliberately set out to entrap the rights holder, such behaviour would no doubt influence how the court would grant any remedies.
I am not convinced that there is an issue here that needs to be solved. If a rights holder is uncertain about whether a retailer is also a manufacturer, it can use a permitted communication to seek clarification. That removes the risk of an unjustified threats action. For those reasons, I ask the hon. Member for Newcastle upon Tyne Central to withdraw her amendment.
Chi Onwurah
I thank the Minister for his comments. I agreed in my speech that the amendment could appear obscure, but the fact is that supply chains are increasingly complex. He talked about the amendment introducing the new concept of claiming to be a manufacturer, but it is not a new concept in practice, given the increasing complexity of global supply chains. It may be a new concept to the Minister.
It is incredibly important that the Bill supports small businesses generally, and in particular our small manufacturers. At the least, it should not put further barriers in the way of their effective commercial working, because it is our small manufacturers that we hope to grow into large manufacturers and create the high-skill, high-wage jobs that we all seek for our future prosperity. I ask the Minister specifically to take a further look at the amendment or to consider different ways of achieving the same objective.
Question put, That the amendment be made.
Chi Onwurah
I beg to move amendment 3, in clause 1, page 2, line 19, at end insert
“or any other product or process having the same features so far as is material to the alleged infringement.”
This amendment would allow communications from the rights holder to the primary infringer to also refer to secondary infringing acts (by the primary infringer), without it constituting a threat.
As I noted earlier, it is a strength of the Bill that it simplifies the legal environment within which businesses operate. Any attempt to make the application of the law less costly and less uncertain is to be praised, particularly in an area, such as this one, that is so commercially sensitive and technical in many of its provisions. It is because of that that certain provisions in the Bill require amending to allow for greater certainty and to ensure that instances of infringement can be dealt with easily and with minimum fuss.
The amendment would allow communications from the rights holder to the primary infringer to also refer to secondary infringing acts by the primary infringer without it constituting a threat. In other words, rights holders would be able to refer to future infringing acts, or infringing acts that are fundamentally similar to the current infringing act. The amendment would enable them to be grouped together in communications.
The issue was raised by the Chartered Institute of Patent Attorneys in response to the Law Commission’s consultation. However, the Bill still does not reflect the CIPA’s concern that it does not allow the rights holder to ask the primary infringer not to infringe in future or not to infringe in a different way—that is, the secondary infringing acts. It leaves the rights holder with very narrow parameters for what they can say in communications to the primary infringer, allowing little room for manoeuvre. That is especially problematic when one again considers the case of small businesses holding rights. You may begin to detect a theme, Mr Nuttall, in terms of the Opposition’s constant concern for the protection of small businesses and in particular small manufacturers. Small businesses would not necessarily be able to afford advice on what communications were permissible, and could find themselves effectively bringing in other infringing communications without knowing it.
Joseph Johnson
It is crucial that the threats provisions allow rights holders to enforce their rights, but also that they encourage rights holders to communicate with the trade source of an infringement—those performing what are known as primary acts. For patents, that would include manufacturers and importers. The provisions will allow a threat to sue for infringement to be made to the manufacturer of a product, for example, a hair dryer. Threats can then also be made to that manufacturer for retailing that same hair dryer. Once the rights holder has found the manufacturer of the product, it is entirely sensible that the rights holder can raise all of the allegedly infringing acts they believe the manufacturer to be carrying out in relation to that product. That encourages sensible negotiation and helps to resolve the dispute.
However, the amendment would allow threats to be made to the same business for retailing similar hair dryers, even though the business in question is—for those products—merely acting as a pure retailer. That would chip away at the principle at the very heart of the threats provisions—that of protection for those further down the supply chain. The amendment would also blur the clear line between what does and does not give rise to a threats action, making it harder for rights holders to approach alleged primary infringers with confidence. In addition, the concept of “the same features so far as is material” is exceedingly vague and will create a great deal of uncertainty for business about whether products are, or are not, materially “the same”. I therefore ask the hon. Member for Newcastle upon Tyne Central to withdraw her amendment.
Chi Onwurah
I am disappointed that the Minister did not give more weight to CIPA’s concerns. His concern about the language being vague in certain provisions does not reflect the excellent work that I am sure could be done by his Department to make the language less vague. Equally, it does not reflect much of the language in existing provisions. However, I do not wish to test the patience—or, indeed, the presence—of the Committee, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clauses 2 to 9 ordered to stand part of the Bill.
New Clause 1
Review of the impact of exiting the European Union on provisions within this Act
“( ) Within 12 months of this Act coming into force, the Secretary of State must prepare and publish a report on the impact of the Government’s plans for exiting the European Union on the provisions within this Act, and must lay a copy of the report before Parliament.” —(Chi Onwurah.)
A probing new clause to assess the impact of exiting the European Union on the provisions within this Act.
Brought up, and read the First time.
Maria Eagle
I agree that anything that reduces the costs of doing business across jurisdictions—with appropriate safeguards, of course—will be welcomed by businesses and companies that seek to do just that. Given that as we leave the European Union we will have to be more outward looking and focused on trade, immediately acting to impose extra burdens on businesses that might be seeking to invest in this country is not a particularly good signal. However, the Minister may well be about to provide us with every ounce of assurance possible and set out in full the Government’s intention with regard to our participation in the court.
Joseph Johnson
I thank the hon. Member for Newcastle upon Tyne Central again for her new clause and for the opportunity to touch on this morning’s court judgment. It was, however, delivered after the start of our proceedings, so I have not had the chance to look at it in full, although I can tell hon. Members that the Secretary of State for Exiting the European Union will make a statement to the House at, I believe, 12.30 this afternoon, which will no doubt provide them with more information about the Government’s response.
Maria Eagle
Will the Minister enlighten us about the Government’s intention towards the unified patent court agreement?
Joseph Johnson
I will happily come on to that in due course. I remind the hon. Lady that the Bill is not part of the ratification process for the unified patent court and we are in danger of straying off topic and beyond the scope of the Bill.
The new clause would require the Secretary of State to report on the impact of the Government’s plans for exiting the European Union on the provisions of the Bill within 12 months of it coming into force. The Law Commission review that led to the Bill was of the existing threat provisions that apply to all patents, trademarks and designs that have force in the UK, including the relevant EU-wide rights. The Bill therefore applies the new threat provisions to EU trademarks and community design rights.
It is important that businesses in the UK are protected against unjustified threats in relation to their activities in the UK, regardless of whether those threats relate to infringement of a UK national intellectual property right or an EU-wide IP right that is in force in the UK. Not to cover EU-wide IP rights in so far as they apply to the UK would leave a large loophole and make the threats regime inconsistent across relevant IP rights.
In answer to the remarks of the hon. Member for Garston and Halewood, there is no question of the UK leaving the European Patent Office and the international patent convention that underpins it. It is not connected to the EU.
The Bill also ensures that the threats regime is compatible with the proposed unitary patent and unified patent court, when they come into effect. The Law Commission did detailed work with legal and business interests on that specific point. For as long as we are members of the EU, the UK will continue to play a full and active role. Ensuring that the IP regime continues to function properly for EU-wide rights is an example of that. However, that position and our decision to proceed with ratification of the UPC should not be seen as pre-empting the UK’s objectives in the forthcoming negotiations with the EU. No decision has been taken on our future involvement in the EU IP framework once we have left. That will be part of the negotiations, which have not yet begun.
It is likely that the negotiations will still be in progress one year on from the point at which the Bill would come into force—the point at which the new clause would require us to report. The Prime Minister has been firm that we will not provide a running commentary on negotiations. Publishing the report required by the new clause could well undermine our ability to negotiate the best deal for Britain in this area.
In her speech on 17 January, the Prime Minster set out our negotiating objectives for Brexit. We seek an equal partnership between an independent, self-governing, global Britain and our friends and allies in the EU. The UK has one of the best IP regimes in the world and our work continues to support and develop that. The UK leaving the EU will not change that. We will continue to deliver high-quality rights-granting services, to lead the world in IP enforcement and to be a positive force in the international IP arena. In light of my remarks, I ask the hon. Member for Newcastle upon Tyne Central to withdraw her new clause.
Chi Onwurah
Let me start by saying that I welcome the Minister’s clarification on us remaining a member of the European Patent Office. At least, I think it was a clarification; it was not entirely clear whether it was a clarification or simply an exposition on the current status.
In the Minister’s response to the questions put and the comments made by my hon. Friend the Member for Garston and Halewood, he did not seem to recognise the respect for Parliament and accountability to Parliament that—I do not want to try the patience of the Chair—today’s judgment has enforced and reflected. He gave that as a reason why he cannot deliver a report on the implications, but his position is highly inconsistent. My hon. Friend characterised it as sitting on the fence, but it is an inconsistent fence. It is almost like sitting on two fences that are one.
At the same time as the Minister said it is clear that we are a member of the European Union until we are no longer a member of the European Union, he also said that that was not to presuppose any of the negotiations. He then effectively refused to give any kind of report on the implications of the negotiations when throughout the world investors who are considering investing in the UK and the manufacturing of particular products will be in a state of uncertainty. As I am sure the Minister and everyone on the Government Benches recognise—we certainly recognise it on the Opposition Benches—uncertainty is the death knell for business. Business needs as much certainty as is possible.
Given that we are in such uncertain times, not to be prepared to offer a little more certainty by giving a report one year out on the implications for patents of such a big change in our legislative framework seems short-sighted. I hope that the Minister has now had time to reflect—and perhaps to look at the judgment on his electronic device—and feels able to consider supporting the new clause, which would create a not unjustified level of sharing of implications and reduce business uncertainty. I am sure we can all agree that that is important, as we move towards leaving the European Union. The Minister does not seem inclined to respond to my appeal, so I will press the new clause to a Division.
Question put, That the clause be read a Second time.
Intellectual Property (Unjustified Threats) Bill [Lords]
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 21st March 2017
(7 years, 9 months ago)
Commons ChamberIntellectual Property (Unjustified Threats) Act 2017 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 21 March 2017 - (21 Mar 2017)
This text is a record of ministerial contributions to a debate held as part of the Intellectual Property (Unjustified Threats) Act 2017 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
This new clause would require the Secretary of State to issue a report on the impact of the Government’s plans for exiting the European Union on the provisions in the Bill within 12 months of it coming into force.
The Bill does not take forward any EU obligations. The IP unjustified threats provisions do not derive from EU law. They are “home grown” provisions that were first enacted for patents back in the 19th century. The important protections provided by the Bill will not in themselves be changed by Brexit. Businesses pushed for clarity and certainty about how they can contact others over IP disputes, and the Bill will deliver that. Our leaving the EU does not alter that. Of course some IP rights are EU-wide, and the Bill will apply properly to those rights. The threats regime will be consistent across all relevant rights that have effect in the UK.
Furthermore, the Bill will ensure that our UK threats regime works appropriately with the proposed unitary patent and unified patent court when they come into effect. The hon. Member for Sefton Central (Bill Esterson) asked about the UPC following our exit from the EU. The options for the UK’s intellectual property regime after our exit, including our relationship with the unified patent court, will be the subject of negotiation, and it would be wrong to set out unilateral positions in advance. None the less, our efforts will be focused on seeking the best deal possible in negotiations with our European partners, and we want that deal to reflect the kind of mature co-operative relationship that close friends and allies enjoy.
As long as we are members of the EU, the UK will continue to play a full and active role, and making sure the IP regime continues to function properly for EU-wide rights is an example. The UK’s involvement in the EU IP framework after exit is not a matter for the Bill; it will be part of the EU exit negotiations, which of course have not yet begun. It is likely that those negotiations will still be in progress at the point at which the new clause would require us to report. Publishing the suggested report would be unnecessary and could well undermine our ability to negotiate the best deal for Britain in this area.
The hon. Gentleman asked about EU-wide IP rights on Brexit. Of course we are already talking to businesses and to other stakeholders about this important issue. There will be time to address it fully and properly during exit negotiations. Naturally, we will want to see the best outcome and one that supports our innovative businesses. He asked also about EU trade marks and designs. We recognise that users will want clarity over the long-term coverage of those rights. We acknowledge the importance of involving users in the consideration of these issues, and we are working with stakeholders at the moment to gather views on how to address their concerns.
The hon. Gentleman asked on a number of occasions about the EU trademark reform package and the directive. On balance, we think that the reform package is a good one, with modernisations that will make the overall system easier and cheaper for businesses to use.
We are committed to getting the right deal for the UK and we will work with Parliament to ensure a smooth and successful exit. The new clause would not help us in any of this work; it is unnecessary and potentially harmful to the UK’s interests. For that reason, I ask the hon. Gentleman to withdraw the new clause.
Bill Esterson
I am glad that the Minister said that he was already having discussions with businesses; that is incredibly important. I urge him to make it clear very publicly, sooner rather than later, exactly what the nature of those discussions are. Businesses are already exceedingly worried about the consequences for intellectual property. I thank him for picking up the points that I made about the relationship between EU patent law and UK patent law. I think that he understands that a great deal of reassurance is needed. I do not agree that we would make life more difficult by having this requirement on Government. In fact, it is a sensible move. I would be surprised and very concerned if we did not see a degree of reporting back during negotiations on these and many other matters. None the less, he has put forward the Government’s view in response to the points that I have raised, so I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Clause 1
Patents
Joseph Johnson
One of the key purposes of the Bill is to simplify an important but complex area of intellectual property law, making it more accessible and easier to use. One way in which it does this is by setting out a clear statement of those acts that a rights holder can safely refer to in a communication, and that will not trigger an unjustified threats action. This helps to encourage rights holders to communicate with the trade source of an alleged infringement. It would include those who manufacture or import patented products or use patented processes, for example. Such acts are known as primary infringements.
Amendments 1 and 3 seek to make it allowable to approach someone who explicitly claims to be a primary infringer. I am not convinced that there is problem that needs to be solved, but, in any event, there are two key points. First, under the reforms as they stand, a rights holder can already communicate with potential infringers of all types, including those identified by amendments 1 and 3. The Bill provides clear guidance on how this can be done. The provisions therefore make it easier for parties, including small and medium-sized enterprises, to communicate and resolve issues without the need for litigation. Secondly, it is perfectly allowable to make a threat to anyone so long as that threat refers only to manufacturing and importing, or other primary acts. Someone making such a threat would not be at risk of being sued, even if the recipient was falsely claiming to do those acts. For these reasons, as well as the additional complexity introduced, I do not accept that amendments 1 and 3 are appropriate.
Moving on to amendment 2, I agree it is important that issues of infringement can be raised early, before real commercial damage is done. For that reason, the Bill already allows threats to be made in relation to future or intended acts of primary infringement, so amendment 2 adds nothing in that regard. Furthermore, the Bill already allows the rights holder to refer to certain secondary acts when communicating with an alleged primary infringer. When someone is manufacturing an allegedly infringing product, the rights holder can also discuss the retailing of that same product. Users wanted this, as it is pragmatic and helps to save time and money, but it would not be right to extend this further and allow threats to be made to that same manufacturer about the retail or stocking of other products that they did not make themselves. That could damage businesses that retail products acquired from a legitimate manufacturer, and would disrupt the ability of that legitimate manufacturer to operate in the marketplace—an outcome that the threats provisions exist to prevent.
Finally, it is highly uncertain for businesses what would be considered to be “fundamentally similar” acts of infringement, as set out in the amendment, and litigation on the meaning would no doubt ensue. If the intention is to capture only similar products, I do not think that is achieved.
These amendments would introduce additional and unwelcome complexity. They would blur the line between who is protected from threats and who can safely be approached. Rather than benefiting rights holders, this could instead make getting legal advice more difficult and costly. For those reasons, I ask the hon. Gentleman to withdraw his amendments.
Bill Esterson
We appear to have rehearsed, more or less word for word, what happened in Committee. I am disappointed by the Minister’s responses, because he does not appear to have picked up on the concern about the imbalance between larger and smaller businesses—a fundamental element of what we think is missing from the Bill as drafted. I would like greater clarity from him, but perhaps that will come as the Bill is implemented. I urge the Government to consider the impact on smaller businesses. On own label, apparently once the rights holder has found out that an own label product is not made by a supermarket, such action would have to cease or it would be covered by the legislation. That was certainly our intention in the amendment.
I hope that our points about the need to protect smaller businesses have been well made. I thank the Minister for his responses, and beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Third Reading
Joseph Johnson
I beg to move, That the Bill be now read the Third time.
Intellectual property is crucial to supporting economic growth and a key part of our industrial strategy. I am therefore pleased that this small but important Bill is completing its passage today. The Bill will ensure that businesses, especially SMEs, are best able to make use of the IP regime. In doing so, it will help to deliver the Government’s manifesto commitment to make the UK the best place in Europe to innovate, patent new ideas, and set up and expand a business. The Bill brings clarity and consistency, making it easier and cheaper to solve infringement issues quickly and without litigation. It clearly defines how information can be exchanged to resolve disputes over IP infringement. It also means that legal advisers will now be better able to help to settle disputes without becoming embroiled themselves.
The reforms contained in the Bill are widely supported by stakeholders, not least because of careful research and consultation by the Law Commission. I thank the Law Commission and the Scottish Law Commission for their hard work and expertise in developing these reforms, and for the excellent support they have given the Bill during its passage. I would like briefly to highlight the value of the Law Commission special parliamentary procedure used in the passage of this Bill. The Bill has been strengthened by, in particular, the detailed scrutiny in the other place afforded by that procedure. I am grateful to hon. Members in this House, particularly those who served on the Committee, for their interest and for giving this Bill due consideration. My thanks also go to the hard-working Bill team and to Intellectual Property Office officials for their exceptional work.
The unjustified threats provisions are a valuable part of the wider IP regime and provide much needed protection. These reforms will ensure that those provisions are fit for purpose and make a real difference to our innovators, designers and businesses. I commend the Bill to the House.