Intellectual Property (Unjustified Threats) Bill [Lords]

(Limited Text - Ministerial Extracts only)

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 21st March 2017 Commons Chamber

[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

--- Later in debate ---

I am afraid that I did not follow some of the Minister’s counter-arguments to the amendment in Committee—for example, that the amendment would make it harder for rights holders to approach alleged primary infringers with confidence. In fact, our intention is precisely to increase confidence, especially among smaller businesses as they attempt to protect their intellectual property. Again, if the Minister will not do this through amendment 2, how will he? If CIPA is wrong, in what way is it wrong? If the language is vague—a point that the Minister made in Committee—why has his Department not suggested clearer language? With all the expertise here today and in the Department, it should be possible for the Minister to obtain the clarity of language to address the concerns we have raised. Did he actually ask for that kind of advice, clarification and language that would have addressed the problems, provided the additional assurance to smaller businesses and helped to alleviate some of these concerns? If not, why not?

[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.