Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018
Baroness Kingsmill Excerpts(5 years, 9 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the Grand Committee debate we had on this instrument on 14 January was extensive and wide-ranging; I am grateful to all noble Lords who took part so rigorously. Following that debate, I wrote a letter to noble Lords who participated, providing details on specific matters raised, which I placed in the Library.
The EU-derived law which provides for the current EEA regional exhaustion regime needs amending to ensure that it continues to function appropriately after exit as retained EU law. This instrument, therefore, provides a temporary solution if we leave the EU without a deal. If Parliament does not agree to this SI, it would expose businesses to considerable uncertainty and the risk of litigation. During the Grand Committee debate, noble Lords asked whether UK businesses and rights holders were put at a disadvantage. This arrangement should not disadvantage UK businesses compared to EU businesses. UK and EU businesses exporting secondary market goods from the UK to the EU may be more restricted, but that restriction would apply equally to all businesses, whether they are based in Brussels or Birmingham, and it depends on where rights are held and which direction the goods are travelling, not on nationality.
At this point, I would like to mention correspondence I received from the Publishers Association. Publishing is a key contributor to the UK economy and the sector considers that this instrument is,
“of immense importance to the UK’s publishing industry, and it is vital that it proceeds into law”,
and,
“helps avoid a potential regulatory cliff-edge for books, offering interim certainty to the industry, while the longer-term exhaustion framework is consulted upon”.
For the benefit of the House, I wanted to expand on some key matters raised in Grand Committee.
Lord Henley
I am not going to give way. I think it would be more convenient if I made my speech, allowing the House to listen to it, and then took questions. I will continue.
In Grand Committee, noble Lords asked about the approach taken to consultation on the drafting of this no-deal instrument. The legislative approach for exhaustion of IP rights in a no-deal scenario was being developed at a time of considerable sensitivity over the ongoing withdrawal agreement negotiations and the shape of the future relationship. This meant that the usual formal consultation on the legislative instrument was not appropriate. The level of consultation was consistent with the approach being taken with respect to no-deal legislation across government. My officials have engaged with businesses across many sectors since the referendum. They have spoken to rights holders, distribution companies, academics and trade associations. This engagement helped establish support for the legislative approach taken on this instrument. It is ongoing engagement that will continue as the work progresses, not just on exhaustion but more widely too.
While this instrument is intended to provide a temporary fix if the UK exits the EU without a deal, the Government are already considering options for what exhaustion regime is best for the UK in the future. Such an important decision on the UK’s future exhaustion regime is not to be rushed. It is not sensible to put a sunset clause on this instrument. We intend to take the necessary time to build a robust evidence base and to consult with businesses and consumers before any major decision is made on the UK’s future exhaustion regime.
I appreciate that noble Lords have asked about the process for assessing the impact of the adjustments made by this instrument to retained EU law, as they have asked about other such instruments. I believe I have addressed this matter in my letter to noble Lords, and I hope that the explanation was helpful.
Finally, on a specific point, noble Lords in Grand Committee raised a question as to whether the law relating to exhaustion of rights would be interpreted in accordance with pre-exit EU case law, most notably the Silhouette case. The answer is yes, it will, in accordance with the provisions of the withdrawal Act. In addition, Regulation 2 of this instrument makes it clear that the effect of domestic retained EU law under Section 4 of the withdrawal Act relating to exhaustion of rights does not change after exit, despite the UK not being an EU member state. Whatever effect it had in the UK before exit will be the same after exit.
To summarise, this instrument is important to support the movement of parallel goods, including essential commodities such as medicines. It is a necessary technical fix for UK laws to prepare for our exit from the EU and to provide legal certainty in a no-deal situation. I understand that stakeholders remain very interested in the Government’s future plans on this matter, and I know that my officials at the Intellectual Property Office are keen to have continued constructive engagement with them. The Government value their input in helping them better understand the views of businesses and consumers. I beg to move.
Baroness Kingsmill
My Lords, I merely want to tell the Minister that I too have been advised by the publishing industry. It is with some reluctance that it has agreed that this is necessary legislation, because of the uncertainty that it would otherwise suffer.
The British publishing industry exports more books than any other country. This piece of legislation is vital for it. While it recognises the importance of this SI going through as a temporary fix, it is nevertheless typical of the kind of rushed legislation that has been necessary because of Brexit. This is another example of a gold-standard industry being put at risk because of the pressure to rush that we are all under.
I emphasise that the correspondence that I have had with the publishing industry has suggested that it is extremely unclear about what will happen and that the uncertainty around the long-term provisions for these particular and very important rights causes it considerable concern. For the record, can the Minister clarify this point?
Lord Clement-Jones (LD)
My Lords, whatever the merits of these SIs, I am pleased that we are now debating them on the Floor of the House. I referred in Committee to what my noble friend Lord Tyler said about the critical importance of effective and timely scrutiny of Brexit-related secondary legislation. We have to do this properly. I noticed that the tag in front of this business is “Business expected to be brief”, but we do still have a few loose ends, even after the Minister’s opening statement.
The problem throughout has been inadequate public consultation and the lack of any sunsetting on these statutory instruments. In his letter of 21 January, the Minister defends the lack of proper public consultation as not being meaningful when,
“no wider policy changes were being taken forward”,
and because it,
“would have risked removing the EU’s incentive to agree to an ambitious future relationship on intellectual property”.
I fail to see the substance of the first point, as these SIs are more than technical, and the logic of the second, as, in my experience, contingency plans do not prejudice negotiations.
As we have discussed, we are unilaterally allowing EU 27 goods already placed on the market there to be exported to the UK, which is good news for parallel importers but not as good for parallel exporters from the UK. It is clear from the Government’s small print that these exporters may well need to seek permission to gain entry into the EU. That remains the case.
The Minister did not respond about what the Government are doing to mitigate their situation, by advice or otherwise. I was pleased that he confirmed that the ruling in the Silhouette case and those that followed will apply post Brexit to this modified exhaustion regime. In his letter and in Regulation 2(2), the Minister prays this in aid. It could still have been dealt with expressly in the language of the statutory instrument.
In his responses, the Minister also failed to totally clarify the work being conducted by the IPO into a future exhaustion regime. I very much agree with the noble Baroness, Lady Kingsmill, about how we know about the Government’s current thinking emerging from the review and research, and about organisations such as the Publishers Association asking for the Government’s assurance that they will avoid an international copyright exhaustion regime being implemented in the longer term. Indeed, they are asking for an effective national exhaustion regime so that the UK’s outstanding creative industries, including the publishing industry, will be properly supported. Is that the intention of a future exhaustion regime?
I do not know whether the noble Lord, Lord Adonis, will speak on this SI, but there are a number of aspects that have not yet been covered on the subject of intellectual property rights—the geographical indications, for instance. I see that there is now a draft statutory instrument on what will happen to design rights in the event of a no-deal Brexit. I look forward to that debate. Then there is the very important aspect of rights of representation by IP advisers, trademark attorneys and the like. I do not recall the Minister talking about that either when he addressed us in Committee.
Finally, I express bafflement at the fate of the draft Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations, which the sifting committee and our own Secondary Legislation Scrutiny Committee considered should be dealt with by the affirmative procedure. I do not think the Minister answered that question. When will the draft SI come before us? There are some loose ends and I hope that in the course of the debate the Minister will be able to tidy them up.
Lord Henley
If there are findings that it is necessary to publish I give an assurance those will be published. If the noble Lord will bear with me, I want to talk about the future and make it clear that the IPO will consult and publish the findings properly so that the noble Lord and others with an interest will know what is going on.
I turn to some of the other points I want to address—I was not about to sit down, because there are other points to be dealt with. The noble Baroness, Lady Kingsmill, asked about long-term certainty for publishers and referred to the letter from the Publishers Association. I repeat what I said in my remarks: the Publishers Association made it very clear that it saw it as vital that these regulations should be on the statute book in the event of no deal.
Baroness Kingsmill
The Publishers Association also made it clear that this was not entirely satisfactory, but that it was an essential interim position that needs to be taken. As it said in the letter, this is not ideal, but something forced on publishers. My point really was that this wonderful industry, which is gold standard, as we all know, has been forced to accept unsatisfactory legislation because it is a last-minute attempt to put a finger in the dyke of the possibility of a no-deal Brexit. The publishers again made it clear in the letter that they need some clarity about the future. That is the point I want the Minister to cover in his answer.
Lord Henley
I do not accept the noble Baroness’s metaphors, but I repeat what was said, and the noble Baroness is quite right to repeat the other parts of the message from the Publishers Association.
I come to the point I was about to deal with: the long-term certainty that the Publishers Association and the noble Baroness are looking for. The regional exhaustion regime currently in place supports frictionless trade in goods within the EEA and is considered to provide the optimal balance between the interests of rights holders and consumers. Consumers in the UK will continue to have access to a wide range of products at more competitive prices. Maintaining the current arrangements avoids the uncertainty of cost for UK businesses and consumers associated with a change of exhaustion regime, while the UK considers the impact of a future change to the regime. The SIs, we have made clear, essentially preserve that status quo, but that allows us time to consider evidence and consult on any future change.
I shall move on to the sunset clause, raised by the noble Lord, Lord Clement-Jones. Again, I believe I dealt with this in my opening remarks, but the instrument is intended to be a temporary measure. The Government are considering options for the future. As I made clear, that will continue with extensive stakeholder engagement and consultation, and we must make sure that we have robust evidence. Until we have dealt with that, we will need this in place in the event of no deal. Therefore it is not necessary to have the sunset clause referred to by the noble Lord and the noble Lord, Lord Adonis. Planned research removes the purpose of the sunset clause and the consultation will, in the end, provide the appropriate solution for the future.
I turn to the noble Lord’s further question, on mitigation for exporters. I make it clear that the arrangement will not disadvantage UK businesses, as opposed to EU businesses, as the effect depends on where businesses hold rights, and not on which country they are based in. A continuation of the status quo will minimise any negative economic impact. For example, it will allow existing import arrangements into the UK to continue, including for businesses that rely on secondary market goods. Businesses wishing to continue to parallel export goods from the UK to the EU will need to check with owners of rights in the EU—which may be UK businesses themselves—whether they need permission to do so. For example, UK businesses owning trademarks in the UK and EEA may choose to limit how their goods are parallel exported from the UK to the EEA, if they wish to exploit market conditions such as consumer preferences and labelling regulations.
Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018
Baroness Kingsmill Excerpts(5 years, 9 months ago)
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Lord Henley
I notice that the noble Lord does not agree, but in line with the usual courtesies of the House, it would have been helpful if he had at least mentioned this to his noble friend the Opposition Chief Whip or even to my noble friend the Government Chief Whip.
Lord Henley
If the noble Baroness will give way and be patient. If it is convenient to the Committee, I think that what I will do is speak to all three sets of regulations and I will then move the first one. It is then open to noble Lords, when I formally move the others, to speak to them. For the moment, I intend to speak to all three—
Baroness Kingsmill
My Lords, this is not the most sensible way to proceed. Distinct legal issues arise in each of these statutory instruments and it would be much more sensible if they were debated separately. Having sat on this Committee in which these instruments are put forward, I recognise that it is sometimes easier in terms of efficiency to take them all together. However, these instruments give rise to serious, distinct and important issues, and they really ought to be debated separately.
Lord Warner (CB)
Can I be clear on what the noble Lord is saying? Is he saying that he will move these three regulations en bloc and make his speech on all three, but he expects the rest of us to wait until he formally moves the individual regulations before we speak to them? That does seem to be a slightly “Fred Karno” way of proceeding.
Lord Henley
My Lords, what we are doing concerns the event the noble Lord is addressing—that is, if there is no deal. If there is no deal, we will need these regulations; if there is a deal, they are irrelevant. It is as simple as that.
Baroness Kingsmill
My Lords, is the clarification which the Minister has so helpfully given clear in the regulations: that they will fall into desuetude in the event of no deal?
Lord Henley
I am making it clear in my speech that these are no-deal regulations. They are described as EU exit regulations; that is the point behind them. In the event of there being no deal, they come into effect.
Baroness Kingsmill
Exit has many meanings. It would be clearer if it said in the regulations that they will fall in a no-deal situation.
Lord Henley
I am making it clear to the Committee that they fall—they have no effect—if there is a deal. The point of them is to deal with the unlikely eventuality of there being no deal—or if there is no exit.
We are looking for a deal. We hope there will be a deal, in which case our proceedings are irrelevant and the regulations will have no effect. If there is no deal, obviously we will need them.
If I may make a little progress, I will continue. I believe that we are recognised for our strong intellectual property regime. We were ranked third in the world by Taylor Wessing in 2016, and our enforcement regime was ranked first by the US Chamber of Commerce in 2017. UK businesses are reliant on IP rights—IP-intensive industries generated more than a quarter of UK employment and 43% of UK GDP in 2013. The IP framework is designed to provide a balance. It should reward creators of IP and encourage innovation, while balancing the needs of other businesses and consumers by managing the scope and duration of, and exceptions to, rights.
The intellectual property framework provides rights holders with some exclusive entitlements, such as the right to control distribution of a protected product. However, there are instances where this right is limited in order to promote the free flow of goods across borders.
The exhaustion of IP rights refers to the loss of the right to control the distribution and resale of the product once it has been placed on the market in the specific territory by or with the permission of the rights holder. The UK is currently part of a regional exhaustion regime which allows the movement of IP-protected goods across borders within the European Economic Area once they have been placed on the market by or with the permission of the rights holder anywhere within the European Economic Area. This regional regime enables a balance between allowing rights holders to recoup the investment in innovation while facilitating the secondary market and free circulation of goods within this area.
The UK laws which currently provide for this regional exhaustion regime need to be amended to ensure that they continue to function appropriately after exit. The statutory instruments will ensure that there will be no change to the position on exhaustion rights in relation to the parallel importation of goods from the EEA to the UK. There may, however, be restrictions on what can be exported from the UK to the EEA on the same parallel basis, but that is a matter for the EU legal system and is not something we can control.
Baroness Kingsmill
From what the Minister just said, it sounds as though British holders of intellectual property could be at a significant disadvantage. Is that in fact the case?
Lord Henley
Obviously, there will be changes once we move out. We are trying to set out what will happen to British businesses here. Obviously, we cannot control what happens in the EEA. There might be disadvantages. That is why we are seeking to get a deal. The regulations relate to what happens if there is no deal.
Baroness Kingsmill
I have been the chairman of a number of companies holding significant intellectual property rights. I am very concerned that there appears not to have been any consultation on these matters. Can the Minister correct me if I am wrong and tell me what consultation there has been? When we are considering regulations that could put British businesses at a major disadvantage, it is very important that consultation should have taken place.
Lord Henley
At this stage, I am not in a position to tell the noble Lord the result of that consultation, or those discussions. What I can say is that we will continue to try to get the right deal. That is the important thing—the noble Lord and I might be at one on that point. These regulations are about making sure that, should there be no deal, we are in a position to deal with that side of things—obviously, in no deal, we cannot deal with the other side. We want to be able to deal with those things that are within our control.
Baroness Kingsmill
My Lords, we are trying to do our job here. The Minister has confirmed that the regulations potentially put British businesses at a disadvantage, because there will a number of situations where they will not be able to export the goods they currently export. In those circumstances, we need to think carefully about these regulations. Some of the results of the consultation should be made available to us. I know that none of the businesses with which I am concerned has been consulted, including small and large. I would be grateful for some tangible evidence of the results of the consultation. This is important to us; British business will be placed at a significant disadvantage.
Lord Warner
I may be able to help the Minister because I spoke to the IPO this morning about the second set of regulations. It is clear that there was no formal consultation with the trade body representing the companies affected by those regulations. If I were being a little unkind, it sounded as though officials got hold whoever they could to have a chat. To be fair to the IPO, it never made any claim that it had had a formal consultation. I give the Committee that information in relation to the second set of regulations because it may have been the pattern applied to all these regulations. Perhaps the Minister could clarify that.
Lord Henley
There is the Prime Minister’s deal, which I very much hope another place will agree to in due course. The noble Lord will be the first to accept that another deal might come forward. My department will be ready for that to make sure that, whatever deal comes about, we can then negotiate—we have the transition period for that—the right deal to ensure that in due course, we have the right regime in place concerning the issues we are discussing.
What we are discussing here today is that no-deal option. As I have made clear to the noble Baroness, Lady Kingsmill, and others, that no-deal option will not necessarily satisfy everyone, and we will not necessarily be able to do everything possible to make sure that businesses have exactly the same regime, as we can control only what happens here. Other things might have to be left undone, if I can put it in those terms.
What we have to do here, in debating these regulations, which relate to a no deal, is to try to make sure that we can offer to business—that is why we are putting them forward—the best possible option in the event of no deal. That is what I am trying to do today and what I will continue to do if the noble Lord—
Baroness Kingsmill
I hate to labour the point, but the Minister did himself say that British businesses will potentially be at a significant disadvantage, and that that is what these regulations are trying to deal with. Does he not think that this ought to be debated in the Chamber—that it should be subject to a wider debate?
Lord Henley
The noble Baroness is putting words into my mouth that I did not utter in saying that I thought British business would be at a significant disadvantage.
Lord Henley
I ask the noble Baroness to refrain from intervening from a sedentary position. What I said is that things will be different, and what we are trying to do is make sure that things will be as good as possible in the event of there being no deal. If there is a deal, I hope we will get the right deal so that we can see continuity for all businesses as far as possible in this area.
If the noble Baroness feels that the subject should be a matter for wider debate, that is what is happening in the Chamber at this very moment on the general subject of Brexit, business and all of that. Here we are dealing with one small point relating to how we ensure, in the event of there being no deal, that the right things are in place. I leave it to the noble Baroness as to whether she wants to go back into the Chamber and give those speeches but, when she does, I hope she will refrain from trying to suggest that I said things that I did not. All I have said is that we want to ensure that we can get things right in the event of there being no deal. That is what we are discussing today.
If I may, I will continue on the question of security of supply. Continuity of existing parallel trade into the UK from other EEA states is important across several sectors, including medicine and food. The maintenance of the current position on exhaustion rights in relation to parallel imports will help to ensure the continuation of supply for such goods as medicines in a situation where there is no deal with the EU.
Lord Henley
I am not sure I can take the noble Baroness and noble Lords any further on this point, other than to remind them what the regulations do. They relate to the no-deal situation and to ensuring a degree of certainty, which all businesses would like, in that eventuality. I leave it at that.
Lord Henley
I have not given way yet. If the noble Baroness will wait for me, I will now give way to her.
Baroness Kingsmill
My point is that the whole situation seems to be pretty hypothetical. We are trying to consider what the regulations should be in the event of a no-deal situation, but we do not think there is going to be a no-deal situation. We are also trying to assess the impact of this hypothetical situation without having adequate consultation with those very businesses on which it is going to have an impact. It seems as if we are in Alice in Wonderland, sitting here discussing hypothetical situations. I recognise that the Minister is in difficulties on this point, and it is very hard to be on the Front Bench when you are having to defend hypothetical situations, but the drift of the matter is that we are really wasting everyone’s time, are we not?
Lord Henley
I do not accept that. What we are trying to do by passing no-deal regulations is to ensure a degree of certainty for the businesses we are talking about. That is why we are dealing with the hypothetical situation, and I am perfectly happy to do that. I am also happy to say that I think it unlikely that there will be no deal, but the noble Baroness and others would think we were being irresponsible if we did not prepare for the eventuality of no deal. That is all we are doing.
I move on to a further question raised by the noble Lord, Lord Clement-Jones, on the exhaustion of rights and whether we should agree to the proposal when British businesses cannot export parallel goods to the EEA. Again, there may be restrictions on the parallel export of goods from the UK to the EEA, and the noble Lord is quite right to point out that that is a consequence of leaving the EU. However, businesses wishing to parallel export goods to the EU will have to check with rights holders whether they need permission so to do. The SI seeks to provide a continuation of the status quo most closely, and would likely therefore have the least economic impact while, as I said earlier, the Government consider the impact of any future change.
I turn to the Silhouette case. We are talking about a ruling from the Court of Justice of the European Union, and it may be that I need to write in greater detail on this subject. That ruling from the CJEU is required to implement a regional exhaustion regime, but there are unclarities—if I may put it that way—as to when the Silhouette case will become retained EU case law under the withdrawal Act. EU case law before exit will continue to apply to the interpretation of EU-derived domestic law after exit under the withdrawal Act. EU case law before exit relating to the effect of this law will, obviously, continue under Section 6(3) of the withdrawal Act. Again, with these SIs, we provide the legal clarity that is needed. However, because anything that comes from the Court of Justice of the European Union frequently requires a little extra clarity, if the noble Lord will bear with me, I would prefer to write in greater detail to him on the Silhouette case in dealing with those points.
Patents (Amendment) (EU Exit) Regulations 2018
Baroness Kingsmill Excerpts(5 years, 9 months ago)
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Lord Henley
My Lords, I quite understand that the noble Lord was in the Chamber and therefore not able to be there at the end. I merely made a statement of fact that he was not there and that therefore I was not able to respond to him. I similarly make the quite straightforward statement that I have spoken on this, for which I hope the noble Lord is grateful, and I will respond in due course to the points made. I hope the noble Lord will understand that the wide-scale engagement he would like, as we discussed on the earlier amendment, was not possible on a draft no-deal regulation of this sort. I can give the assurance, as I gave on the previous order—this is the important thing—that there will be a proper consultation in the future. The noble Lord should bear in mind that at the moment we are making sure there is a degree of certainty for businesses in the eventuality that there is no deal.
Lord Henley
No; there is no need for noble Lords to get up. I will sit down and give way to the noble Baroness or the noble Lord when I am ready, but I am entitled to speak and give way as I wish.
We will consult as appropriate on whatever the future regime might be, deal or no deal. We are trying to get things right in the eventuality of there being no deal. It is quite right—
Lord Henley
Can the noble Baroness wait just a moment? I am still speaking. It is quite right that we make appropriate contingency plans. I now give way to the noble Baroness, then I will no doubt give way to the noble Lord, Lord Warner, who is itching to get to his feet.
Baroness Kingsmill
I was actually trying to be a little helpful. In the notes on this matter, there is a little more detail about the consultation than on the previous one. They say a consultation was taken with “informal discussions”—informal is always questionable—
“with a small group of selected individuals with expertise in the relevant areas, or in patent law generally”.
I read that to suggest that the consultation was with lawyers, as opposed to people directly affected by this. I wonder if the Minister could make that clear. If it is with lawyers, they will be looking at it on the basis of the law as opposed to the impact on businesses. Once the Minister has clarified who and what it was, I could then understand the impact. In paragraph 12, the Government assert that there is,
“no, or no significant, impact on business”.
If there has been a proper consultation, that is fine and perhaps one has to accept that impact. But at present an informal discussion,
“with a small group of selected individuals”,
does not sound to me like the kind of consultation that is going to give anybody the possibility of saying there is,
“no, or no significant, impact on business”.
Perhaps the Minister would care to clarify.
Lord Warner
May I intervene to be helpful to the Minister? He might wish to consider withholding his remarks about consultation until he has heard what I have to say a little later about the consultation process—if we may venerate it with such a description. I think he might want to hear those before he commits himself too far on what consultation has taken place.
Baroness Kingsmill
I take the noble Lord’s point entirely. However, having pointed out the inadequacy of the consultation programme, it also throws into complete disrepute the idea that there was no, or no significant, impact on business or the public sector and they have therefore not bothered to make an impact assessment. When the consultation process has been so manifestly inadequate, it is impossible to say that there has been no impact.
Lord Deben
The noble Baroness makes an important point. I want to follow this line because if the consultation itself does not cover the industry, and those others whom you would expect to be covered, it is not likely that the Grand Committee can reasonably expect to accept the concept that there is no effect or problem. We can only do that if we are sure that the consultation has been widespread, properly chosen and the rest. Will my noble friend explain who was consulted with, why some people who are obviously necessary consultees were not consulted, on what basis that choice was made and why these were informal discussions? This is surely a very important SI and there should have been formal discussions.
Secondly, there is a problem in all these SIs which we have to remind the Minister of each time. It is suggested that we can allow these SIs to go through because they are very unlikely actually to be used, because they are based on the principle of a no-deal exit from the European Union. That may be true, but it does not excuse us from ensuring that the SIs are as good as they could be. They might be used, unless the Minister is going to say that they are not going to be. At the moment, they could be used and we have to apply the same intellectual rigour to these as we would to any other SIs.
Lord Deben
I do not think that I ought to follow the noble Lord down that road because otherwise there will be a complaint that one is somehow not keeping to the fact, but of course what he says is entirely true and I agree with him. However, the point is that we as a Grand Committee must not take any less notice of these SIs on the basis that they might not have to be implemented or indeed even that they probably will not have to be implemented. There are two reasons for that. One is that they could be implemented because that is what we are doing; we are making law. The second reason is the point made by the noble Lord, Lord Warner. In future, even if they were not implemented, in other contexts the fact that we had agreed to them would be used as a mechanism for suggesting that whatever is then being presented is perfectly all right because the Grand Committee of the House of Lords had been through them and they are only repeating them. That is the same kind of argument which says, “We are not actually changing anything”.
That leads me to my third point, which is simply this. If we are unhappy about the nature of the people who were consulted and if we also feel that we ought to know who they were and the circumstances in which the consultation took place, it is also true that we need to question the outcome. It is clear that those who know about it think that this particular SI changes the situation very significantly, but the suggestion is that there are no new obligations or burdens on private, public or third sector bodies and it does not require refamiliarisation—a word which I am fascinated to discover and would ask the Minister to explain what it means in order that I get a measure of it. However, if you get the consultation wrong you then get the outcome wrong and therefore you cannot say that there is no need for an impact assessment. The section on impact assessment is thus also very serious.
I direct the Grand Committee to paragraph 12.2:
“There is no, or no significant, impact on the public sector”.
The fact is that if there is no deal and this has to be implemented, there would be a huge impact on the public sector and that impact would be very expensive.
This is another point that I want to raise with my noble friend. There are no costs in this document. We are not told how much it is going to cost. The way to get around that is to say that it is not going to cost very much so, “we do not have to tell you”. However, one of the falsehoods of the whole Brexit argument is the suggestion that we are somehow going to make money out of it, whereas every time you look at any of these things, you see that the United Kingdom is setting up a system to do what historically has been done effectively on a Europe-wide basis. That all costs money and I want to know, as a Member of this House, how much it will cost. It is not acceptable that because we may not have to do it, we do not have to be told how much it will cost.
Baroness Kingsmill
Perhaps I may further the point that the noble Lord is making. We have now established pretty well that the consultation process was at best flawed but much more likely so limited as not to be taken seriously. From that has come the idea that there is no significant impact, which in turn has led to it being said that no specific action is being proposed to minimise regulatory burdens on small businesses. The weakness of the consultation process at the very beginning has worked its way through to saying, “Bad luck for small businesses”, and indeed, I might say, large businesses.
Lord Deben
That is absolutely true. It all adds up to my last point, which I feel is the most important point of all. The Government keep on talking about no impact, but of course in this SI they cover up the fundamental impact, which is that the benefit that used to be enjoyed by those to whom this applies because we were part of the European Union will be removed. That is a huge impact. When the Government talk about no impact, they are really saying that, as long as you confine your activities to the United Kingdom, there will be a little arrangement which will, roughly speaking, be the same as the arrangement that we had in the United Kingdom when we were part of the European Union. That is what we are saying.
That is an entirely different situation, because it means that we do not have the advantages which we had before. I know that that is an integral part of Brexit, and it is one of the reasons why I oppose Brexit so strongly. It is unacceptable not to measure those impacts. It is unacceptable to produce an SI which suggests that there are no impacts when you are saying that if we exclude the biggest impact of all, there are no impacts. That is, at the very best, misleading.
I say to my noble friend that anyone in this country who reads this impenetrable stuff as carefully as we have all tried to will realise that there are two hidden falsehoods in the whole activity. The first is: let us pass it because it will never be used. The second is: when we talk about impacts, we will refuse to talk about the impacts which really matter, which are the impacts which disadvantage British people and make us less able to handle competitive situations, deal with our patients and work in the way in which we can at the moment. We, the Government, are not prepared to measure that because then the public might say, “My goodness, this does not sound a very good idea”. So they do not tell them the figures, the costs or the disadvantages, because it would undermine their position.
Lord Adonis
My Lords, in my now quite long experience of the House I have found that on most occasions when policies are being tested and explained, amendments are being considered and so on, the difference narrows as debate advances. That difference can be eliminated entirely, sometimes because the explanations given by the Government turn out to meet the concerns, sometimes because the Government themselves move to meet the concerns and sometimes because the concerns are misunderstood. That is the general course. Because our job is to scrutinise there may still be resulting differences, but those differences are narrowed, not expanded.
However, a pattern is now emerging in the consideration by the Grand Committee of these no-deal regulations. In almost every case now, as the debate continues the difference widens, for three reasons. The first is precisely the point that the noble Lord, Lord Deben, has made so eloquently, which is that you are expected to believe, in the words of the White Queen in Alice in Wonderland, six impossible things before breakfast before you even consider these regulations. The first suspension of total disbelief that we are expected to entertain is that, all other things being equal in no deal, these regulations will simply make technical changes to govern the fact that we have left the EU with no deal. The problem is that all other things are not equal. The whole ground has shifted underneath the very activities, and the national interest and the companies, that are at stake.
That could not have been clearer than in the remarks of my noble friend—as I continue to call him; I know he now sits on the Cross Benches but he and I were Ministers together for many years so he will always be my noble friend—Lord Warner. I dare say that my noble friend, whom I hold in extremely high regard, knows this sector better than anyone in the House except possibly my noble friend Lord Darzi. He has huge, detailed knowledge from a long period of time as a Health Minister. My noble friend has reported to the House two issues of extraordinary import. The first is that the impact of the actual changes in these regulations will be profound for the industries concerned and for those who need to use their services. The second is that most of those directly concerned were not consulted at all.
That leads to the second big issue that has now arisen time and again in the Grand Committee: the consultation has been exiguous or non-existent despite the fact that the issues concerned are hugely important. The noble Lord, Lord Deben, who is one of the most forensic debaters in the House, noted to brilliant effect the use of the weasel words in respect of consultation in the Explanatory Memorandum regarding the,
“selected individuals with expertise in the relevant areas”,
who the Intellectual Property Office chose to consult.
Lord Adonis
They turn out to be lawyers. I have nothing against lawyers; my noble friend Lady Kingsmill is a distinguished lawyer. It is fine that lawyers should be consulted, but others should be consulted as well. I do not think it is for the Government to select who should be consulted. We are a democracy where everyone should have that right. Indeed, the Cabinet Office rules on consultation were long laboured over by successive Governments: there should be 12 weeks of consultation on regulations that should be published, and so on. We are told that that cannot happen in the case of these regulations because we do not have 12 weeks. Well, we would if the Government were not engaging in this ludicrous no-deal planning that means that there are not 12 weeks to start with. That argument is entirely circular.
The Explanatory Memorandum looks to me to be worse than my noble friend and the noble Lord have said, on top of these informal discussions with a small group of selected individuals. Incidentally, I may say that the Minister was unable to tell us at the beginning who were they were; he said he was going to tell us when he wound up, so we are still awaiting the names of those selected individuals. They do not appear to have included any of the significant companies and experts that my noble friend Lord Warner knows.
I will repeat this fact because it is of great importance to the Grand Committee: the only person who we know with certainty has been consulted by, and has spoken to, the Intellectual Property Office so far is my noble friend Lord Warner, because he tells us that he phoned them up and gave them his views. There has been no information from the noble Lord, Lord Henley, or from anyone else as to who the others were. We have now a lengthening list of those who were not consulted, but we do not know who was. That is an extraordinary state of affairs for the Committee.
Lord Adonis
My Lords, a situation has arisen where there is a serious difference of view, to put it mildly—
Lord Adonis
A difference of fact, as my noble friend has just said, between the Minister and my noble friend Lord Warner, who has just pointed out to me that paragraphs 1 and 2 of Regulation 55 specifically concern exclusivity. This is the precise issue which he said should have been consulted on and on which the companies and trade associations concerned say they were not consulted. I simply note that, but this issue needs to be explored more fully before these regulations go to the House itself, as the situation at the moment is clearly unsatisfactory. The Minister, who is deeply honourable in these matters, would not wish this dispute of facts to be unresolved.
Lord Henley
My Lords, I am always kind and polite to the noble Lord. I know he is a delicate flower and does not want me to be too hard on him.
I appreciate there are a lot of no-deal regulations and that we are asking a lot of the Joint Committee on Statutory Instruments. The noble Lord has served on that wonderful committee, as have we all, and it does a very good job, as do the other committees that have this duty. We are satisfied that they have enough time and resources. I think the House feels that it too has enough time. This can be discussed by the usual channels. We are having a very useful debate this evening and I am looking forward to continuing that process. It is difficult, but equally it would be much more irresponsible not to be moving regulations or producing them for the eventuality that there was a no deal, because the noble Lord will be aware that as a result of Article 50 and various other Acts of Parliament that have been through both Houses, if we do not reach an agreement by 29 March, we leave the EU without a deal. This order, the previous order and other orders are designed to provide that certainty businesses need, and we will continue to move the appropriate orders.
Lord Henley
Will the noble Baroness let me finish? I will then give way. She must not be quite so enthusiastic.
As is right and proper, we will then move them so that we can be in that prime position.
Baroness Kingsmill
My Lords, it surprises me that the Minister is not concerned by the extent of the statutory instruments still to be debated, because the question must be asked: why on earth are we rushing through them at this late stage? There have been two years in which we could have been prepared; there were two years when the possibility of a no-deal outcome was on the cards. Why on earth are we and the noble Lord’s civil servants being expected to race through with inadequate research and consultation now at such a late stage when there have been two years when these things could have been prepared?
Lord Henley
My Lords, I simply do not accept that point. The fact is that we are doing them now and giving them proper scrutiny, as the noble Baroness, her noble friend and other noble Lords would accept. There will be other opportunities to debate this and other regulations.
Lord Henley
My Lords, I am on my feet, and I will give way to the noble Baroness when I wish. I will now give way.
Baroness Kingsmill
May I just say that we have been at this for getting on for four hours? If we proceed at this pace with the number of statutory instruments that we have still to debate, we will never get through them and there will be a vote before long to say that there will be no no deal. So what is the point of all this? I referred earlier to Alice in Wonderland; it seems even more peculiar.
Lord Henley
My Lords, the noble Baroness is getting on to wider questions. I cannot remember whether it is in Alice in Wonderland or Through the Looking Glass, but I am a mere pawn on the chessboard of life. I believe that we are having appropriate discussion on the order and I think that it is right and proper that, since we have started, we should continue. I look forward so to doing and, as I said, there will possibly be other opportunities as well. I think we should continue with that. Others, who may be the kings, queens and bishops, will then discuss what is the proper procedure, but at the moment, we are considering the Patents (Amendment) (EU Exit) Regulations, which relate only to no deal. We do not want to broaden it out to other things; others can discuss that issue.
Let me return to the debate and the consultation. As I made clear earlier, the IPO sought the views of a group of individual stakeholders—I shall not go into the slightly different words that my noble friend cited from different letters—and consulted them in their personal capacity to identify any issues with the drafting and raise any concerns with the approach. As I made clear, legal experts—there is nothing wrong with lawyers; the noble Baroness, Lady Kingsmill, is one of them, as am I—and business representatives were present. It was a helpful and constructive review of the draft and it was understood that the regs were designed to maintain continuity. I repeat for the sake of the record that at that meeting, as I understand it, there were representatives from the BIA, the ABPI, the IP Federation, the Chartered Institute of Patent Attorneys, the British Generic Manufacturers Association and the agrochemicals industry. If I can add to that list and give further details, I will certainly include that in any letter I write to noble Lords.
On letters, I believe—I am open to correction—that in advance of these regulations I wrote to the noble Lord, Lord Stevenson, and to the noble Lord, Lord Fox, from the Liberal Democrat Benches. I do not know whether I should have taken that wider and written to others. I will consider that with each order I deal with, as appropriate. I also make clear, on the lack of consultation, that we were not preoccupied with the deal. The IPO had sufficient resources to take both deal and no deal in parallel. It was necessary across Government to treat no-deal preparations sensitively when we were in the middle of negotiating a proper deal. From the perspective of business, retaining the regulations means that both the process for applying for an SPC and the scope of the right for which it is granted would be the same after exit as before.
I turn to the post-exit concerns of the noble Lord, Lord Warner. I appreciate that after exit day there may be new drivers for policy change. I think it was the noble Lord who talked about the possible time it may take to get a UK authorisation compared to now and the potential effects. I hear the noble Lord’s concerns, but we should understand the issues when the time comes then properly consider the right policy solution at that point. As I have already said, I would expect that to involve the more usual open and constructive discussions with stakeholders and interests in this area that the IPA usually enjoys. I can assure the noble Lord and others that our intention would be to fully engage with the BIA, the IP Federation and other similar bodies.