Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018

Debate between Lord Adonis and Lord Stevenson of Balmacara

Wednesday 6th February 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am happy to follow the noble Lord. He has made some detailed comments and posed some questions which I hope the Minister will be able to respond to. Having said that, I accept that the Minister’s letter of 21 January—running to eight pages and covering a lot of detail—as well as subsequent meetings have done a lot to clarify some of the issues that were before us when this was first considered in Committee. But good scrutiny leads to further debate and discussion, so it is not inappropriate that we should come back and point out areas that are not as good as perhaps they should be as we pass this important, time-limited piece of legislation. I also agree that the clarification about the Silhouette case, which was a confusing passage of discussion in Committee, has made things much clearer and will be helpful to those involved in that issue.

The Government should take away from this process three main things. First, if there is an SI of the sort of significance represented by the three intellectual property regulations before us today, the fact that consultation need not be carried out is not sufficient to assuage the concerns of those who have had to respond, even as late as yesterday, to these issues. There is a lesson to be learned here about the need for more engagement and a more considered approach to the context of these amendments. I accept the pressure of time and the difficulty of fitting everything in, but the consequence of not consulting according to the style and process that people have become accustomed to, just because this is a special case, has meant that we have not had the best advice that would have been available to us in ordinary circumstances.

Related to that, the question of whether one needs an impact assessment is also important. There is of course a de minimis figure, which was in the Cabinet Office rules. But when one thinks about the impact that these new regulations will have, even for a time-limited period, the Government should be prepared at the very least to bring forward for consideration evidence that the de minimis figure has been met. At the moment, all we get is an assertion; we are left to guess whether the figures that might be construed will work. That is not satisfactory in terms of general process.

Thirdly—this does not apply to the SI before us at the moment but applies to the other two—considerable variations in approach have been taken by the different departments on the EU exit SIs. There should be some overall consideration of this when the time comes to review how, in some areas, the limited licence available to ensure that the statute book is in good order as we leave the EU, if we do, on a no-deal basis, has been interpreted differently in different departments. We heard even today that the Treasury has a completely different approach from that of others on the issues of consultation and preparation of estimates that I have been talking about. The public interest would be better served by a slightly different approach.

[Lord Adonis (Lab)]

My Lords, first, I thank the Minister for his extensive letter to noble Lords responding to the debate in Grand Committee. I have a specific question and will then make some comments on the wider issue of consultation which has bedevilled all our proceedings on these no-deal statutory instruments, because the consultation has been so haphazard and unsatisfactory. My question is in response to the Minister’s opening remarks, when he said that it was “not sensible” to put a sunset clause on the current exhaustion regime. That is a judgment which the Government have made but, since this is clearly a matter of extreme importance to the industry, can he tell us what the view was of stakeholders who were consulted on the issue of the sunset clause? I understand that that issue has bedevilled these proceedings throughout.

On consultation, the Minister’s letter was significant; it accepted that the consultation which had taken place had been in confidence. Having secret consultations which are not open to all relevant people, or all those who wish to take part, particularly from the industries consulted, is contrary to almost all of the principles of public consultation. The Minister’s letter has an extremely convoluted paragraph about how this secret consultation was conducted. It says that the Intellectual Property Office, or IPO,

“identified the relevant representative organisations or businesses it would usually engage with, and who would give a range of views. Because of the confidential nature of the review”—

which was entirely self-imposed by the Government; this did not need to be confidential but could have been an open, public review—

“the IPO then identified and invited 12 individual experts who had previously liaised with the IPO in a role within one (or more) of those relevant organisations”.

The letter then lists the organisations. It continues:

“I believe this is consistent with what I said in my … clarifying remarks about this process during my closing speech; the IPO’s understanding was that these individuals were ‘from’ those organisations but they were, as I clearly said, ‘a group of individual stakeholders’ and the IPO ‘consulted them in their personal capacity’. I therefore also agree with Lord Warner that the organisations themselves were not consulted in the way that would usually happen”.


Reading that twice, one realises the truly extraordinary nature of the consultation which has taken place. The Government have arbitrarily and secretly selected 12 individuals because—to cut to the chase—officials happened to know them and had dealt with them previously. They then chose to consult them, telling Parliament that the consultation process was adequate. However, when pressed, it is clear that these people do not in any respect represent the organisations from which they have come. We are not told who the individuals are and they are not in any way accountable for their advice. We are told that the advice was given individually, but we are not told what it was. When it comes to disputes on major aspects of policy embedded in these regulations, the Government blandly assure us that the decisions they have taken are sensible. In my experience, Governments always think that their decisions are sensible; I have not yet met a Treasury Minister who said that their decisions were not sensible. However, the Government will not even tell us whether the “sensible” decisions they have made reflect the secret consultation that took place before the preparation of the statutory instruments.

Because of the unsatisfactory nature of this whole procedure, we will have to approve this regulation. However, in any normal circumstances, we would not approve a regulation on the basis of a secret consultation with 12 individuals—selected secretly by the Government, whose names we do not know and who are not in any way accountable—when there should be a public consultation. I raise this point not only to highlight the unsatisfactory nature of this, which goes to the heart of all this no-deal planning, but because of the cascade of regulations still to come. Every time your Lordships meet, a plethora of regulations appears before us. In the health Bill, which we debated yesterday —I did not participate, but I read the Bill during the proceedings—there was provision for a whole slew of further regulations, with procedures as yet undecided.

I invite the Minister to respond on this, as I think it is important to get this on the record. Can he give some undertakings that consultation on future regulations laid before your Lordships will be done in an open, transparent way, so that we are not faced again with consultations with secretly selected individuals? As noble Lords will recall, when we were debating one of the instruments, we were told that the individuals were “selected and trusted” respondents—presumably on the grounds that a general public consultation with people who were willing to share their views would not engender trust.

This is not good government. In any circumstances other than this national emergency, I am confident that your Lordships would not agree to process, let alone consent to, regulations on this basis. We need some assurance that, in the time remaining, consultations will be conducted in a proper manner, rather than in the secret, cloak and dagger, totally unaccountable fashion that we have seen in respect to this instrument.

Patents (Amendment) (EU Exit) Regulations 2018

Debate between Lord Adonis and Lord Stevenson of Balmacara

Monday 14th January 2019 Grand Committee

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a good debate that has raised lots of issues. I think the noble Lord, Lord Clement-Jones, is right that there are real questions to be asked here, although I feel that we are experiencing a bit of a split focus here. It is like being part of the film “The Matrix” because there seem to be two different levels of debate going on. There are the particularly narrow questions about the statutory instrument as presented, with which I think there are some substantial difficulties, but there are also the wider issues about why we are doing all this and the way that we are doing it. The noble Lord, Lord Deben, and others have focused on the absurdity of a situation where we are trying to persuade ourselves that, despite our best instincts, despite all the training that we have had here and despite everything that we do every other day of our lives, we are quite happy to sit here and wave this through just because it might not happen. That seems to be Alice in Wonderland rather than “The Matrix”, but perhaps they come together in a curious way which I have yet to experience.

The noble Lord, Lord Clement-Jones, commented on the Unified Patent Court, which is an intriguing area of public policy which has yet to have its full ramifications explained. He is absolutely right that the UK has committed itself to ratifying the UPC and intends to join up. I am sure that the Minister will confirm that when he comes to respond. Of course, with that comes the continuing role of the ECJ, because all judgments of the UPC—although there will be a platform of it operating here in London in property which has already been bought and refurbished in premises on a lavish scale which may not have been seen by the press yet, but I am sure that when they are there will be a bit of a scandal—will be absolutely redolent of the way in which the European continuing engagement will have to operate. That is because so many people hold unified patents and will need to have them defended in ways which are important not only here but in the six other areas where the court will be operating. But that is part of the further discussion and debate along with the consultation issues which I agree need to be bottomed out at some stage, but perhaps not today.

I may just stunt the time taken up by other speakers by looking at the other four SIs which are due to be discussed shortly by the noble Lord, Lord Bates, and others. I am sure that he will have read through and inwardly memorised the rather clever phrasing used by HM Treasury which I recommend to the department as it might wish to use it in the future and thus avoid some of the confusion. It states:

“HM Treasury has not undertaken a consultation on the instrument, but has engaged with relevant stakeholders on its approach to Financial Services legislation under the European Union (Withdrawal) Act 2018, including on this instrument, in order to familiarise them with the legislation ahead of laying … The instrument was also published in draft, along with an explanatory policy note, on 31 October 2018, in order to maximise transparency ahead of laying”.


That is wonderful phrasing and I congratulate the Treasury on having found a way out of an apparently insoluble problem. If it can defeat the noble Lord, Lord Adonis, and his assembled minions, obviously it will be well ahead of the game.

[Lord Adonis]

My Lords, I am grateful to my noble friend for giving way. Does he not think that the best way of maximising transparency, which is a laudable objective that the Grand Committee shares entirely, would be to have an ordinary consultation under the Cabinet Office procedures of 12 weeks where people can make formal responses? The Government then evaluate those responses and publish their response together with all of the consultation responses before the debate in the House rather than what the noble Lord, Lord Henley, is proposing, which is that the consultation should take place after the House has approved the regulations.

Will he further say, in this new Alice in Wonderland world in which we work where consultations take place after Parliament has agreed the regulations on which we are consulting, how he thinks that Parliament is then intended to take account of the consultation? In the world of the noble Lord, Lord Henley, where we consult on the regulations having passed them, if the result of the consultation with the trusted and selected individuals or the selected and trusted individuals shows that there is a need for further substantial revisions to the regulations, what are we supposed to do? What procedure does my noble friend have in mind for how we then rescind these regulations and produce new ones? Does he not think that it would be better if we could come out of Alice in Wonderland and go to the world that applied before Brexit started, where we had good, orderly government and consulted on major changes to legislation before we brought about those changes rather than afterwards?

[Lord Stevenson of Balmacara]

My Lords, I regularly spend most of my day with Alice in Wonderland because I think that it is a wonderful place to be. The noble Lord will be surprised to learn that I agree absolutely with every word he has said. The only difference between us is that I do not think I need to repeat it every time.

Finally, I wish to draw two points to the attention of the Government. The first is that we have to be clear about the damage that will be done to the UK’s pharmaceutical industries along the lines of what the noble Lord, Lord Warner, said. I hope that we will get a letter from the Government confirming or denying some of the points which were made in that exchange. Secondly—this is a minor point but it is worth exploring and asking questions about. In paragraph 4.3 there is rather confused wording about—the extent and territorial application of this SI. Although it applies to the United Kingdom, bits of it, which are not specified, do not apply to the Isle of Man. Activities have been taken up so I would be grateful for a side note because this needs to be responded to today.