Patents (Amendment) (EU Exit) Regulations 2018

Lord Clement-Jones Excerpts

Monday 14th January 2019 Grand Committee

The way it has been done here, the instrument aligns the maximum term for this patent-like right to continue to that which would be applicable in the EEA so that it would all expire at the same time. Was that decision taken to make it simple, in particular because of the decision made about parallel imports, so that you were not having to cross-check whether there were different rights applying at the time of the parallel imports? We have already had a discussion about parallel imports and whether that was a good idea. One comes back to the same situation that we have already visited. I am not sure what the starting point is; I am asking whether it was the decision on parallel imports and whether, if we suggested that perhaps that should be time-limited, even if not in this instrument, we should do something quite quickly to make it so. Would that then adjust what was done by the supplementary protection certificate because it follows that you would? When you come to look at the economic terms, there are lots of things to balance: whether you want a longer term of protection, who is paying for it and what benefits there are to the industry and the country. These are very nuanced and difficult, and there are always protagonists on both sides. Normally, I tend to be one of the protagonists against extensions; you should have to fight hard and justify them. However, that is all the more reason for having a much wider and longer exposure of all these rather difficult issues that one needs to come to grips with. I therefore agree with those noble Lords who have been poking around to see how good the consultation has been because these are serious issues. But, as I said, my question comes back to the fact that it is a bit chicken and egg: was the parallel import decision taken first and did everything else follow from that?

[Lord Clement-Jones (LD)]

My Lords, we have to conclude after the debate so far that this SI is holed below the waterline and the Minister will have some difficulty in preventing it sinking. He will have to write a pretty good letter by the time this comes to the whole House to see that it goes through when it comes to a vote there. The powerful speech made by the noble Lord, Lord Warner, has exposed the business issues involved in this. I was interested to hear what the noble Lord, Lord Adonis, said about the legal technicalities on this, and of course the impeccable logic of the noble Lord, Lord Deben, and the noble Baroness, Lady Kingsmill, on the consultation and the impact assessment is unassailable. The Minister will therefore have a great deal of difficulty in persuading us to approve these regulations, whether here or, eventually, in the House.

I am grateful to my noble friend who is a patent expert. My expertise in intellectual property extends to trademarks and copyright but it is very useful to have her unpacking of some of these issues as well. What particularly concerns me about the substance of the SI is not just that it is in the eventuality of no deal but that it has all the signs of something that was planned to take effect at the end of the transition period if the Prime Minister’s deal was going to take effect. This looks as if it is a longer-term arrangement. I think it was enshrined in the White Paper, or at least the outlines of it were, and that makes it of particular significance to get right. If there is any kind of deal then I suspect that this is what will be put into effect. It therefore has a double significance and is not just a fix for this purpose which has not been consulted over and which is not acceptable to a major trade body. I have dealt with the BioIndustry Association and I have a great deal of time for it and respect for the expertise that it embodies. The fact that there has not been adequate consultation over something that is potentially a long-term solution makes this even more questionable.

[Lord Warner]

I am sorry to interrupt the noble Lord further but I want to give a bit of support to what he is saying. In my remarks I drew attention to the fact that the MHRA, the UK pharmaceutical regulator, actually tried to suggest to the BIA that it should wait for a review in two years’ time. That looks remarkably like the timetable for the end of the transition period, so I want to give some support to the arguments that the noble Lord is making.

[Lord Clement-Jones]

I thank the noble Lord for that intervention because that is exactly the impression that I had got.

To add to the Minister’s woes, I want to go off into a completely different subject that he himself raised at the very beginning: the issue of the Agreement on a Unified Patent Court and the unified patent. The unified patent has come up; the Minister has mentioned it and it was included in the technical note in September. There is a big issue surrounding the Agreement on a Unified Patent Court and the unified patent. If the agreement is ratified by Germany and comes into force ahead of any exit date, the UK will need to work out how to remain a member of the UPC or withdraw from the system, which could have a significant impact on business. Of course, at this stage it is not clear if the agreement will come into effect at all, but if it does and if, as a third-party country, the UK then wants to take part, is it not clear—I have a 39-page legal opinion on this subject—that we, the UK, will have to acknowledge the supremacy of EU law and the ECJ as part of signing up to the UPC agreement? What kind of “taking back control” for Brexiters will that be?

What advice have the Government received on this matter? I heard what the Minister had to say: he made the very positive statement that we were going to sign up. Have the Government had any further observations on the UPC agreement and the unified patent? How do they envisage UK legislation dovetailing with both systems, assuming that it is ratified?

[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.

--- Later in debate ---

[Lord Henley]

The noble Lord is right to point to the importance of the life sciences sector, and I am grateful he did. One should also re-emphasise—I would be grateful if the noble Lord would do so—just how important the life sciences industry is to us and what a great state it is in at the moment. The noble Lord will be aware of the recent stage 2 of the sector deal in life sciences that we published along with that sector. I am sure the noble Lord very much welcomed the fact that a major multinational—one based in Brussels, for that matter—announced at that stage that it was investing a further £1 billion over the next five years in research in the UK. Obviously Brexit is not putting off certain parts of the life sciences industry, and I am sure the noble Lord will welcome that.

I do not share the noble Lord’s view that there is a policy change. The SI maintains precisely the current calculation of the SPC duration, and at present it is calculated from the first marketing authorisation in the EEA, which includes the UK. After exit, without the provisions we have set out in this SI, the duration of an SPC in the UK would be calculated from the first authorisation in the EEA—but that would not include the UK. That would be nonsensical and is exactly the sort of deficiency that Parliament gave Ministers carefully limited powers to fix within the withdrawal Act. We believe we are complying with the powers we have within the withdrawal Act. That is what the SI does. It shows that after exit, SPCs within the UK will continue to be calculated from the first marketing authorisation in the EEA or the UK, and the status quo is maintained.

Finally, I turn to the point made by the noble Lord, Lord Adonis, about the Explanatory Memorandum. He said that there was little impact. If a measure has a net impact to business of less than £5 million then obviously a full impact assessment is not required. The £5 million threshold, as the noble Lord will be aware as a former Minister, is set out in the better regulation framework guidance, and measures below the threshold must be accompanied by a proportionate analysis. The analysis is summarised, as the noble Lord will be well aware, in paragraph 12.3 of the Explanatory Memorandum.

I used the word “finally” but, if noble Lords will bear with me, I will have one or two more “finallys”. I turn to the concerns about the unified patent court. We have set out our proposals for the future relationship with the EU, including exploring continued participation in the UPC and the unitary patent. In the political declaration, the UK and the EU have agreed to co-operate in areas of mutual interest relating to intellectual property, including patents. The future of the UPC and the unitary patent will be a matter for negotiation. It is therefore rather too soon to be setting out the further dovetailing legislation.

The noble Lord, Lord Clement-Jones, also set out the points made by the law firm Bristows. We are aware of the point that Bristows has made. The patents legislation contains a number of references to the comptroller and the court, and all those references will be modified in the event of the UPC coming into force. The patents legislation will fully recognise the jurisdiction of the UPC.

[Lord Clement-Jones]

I apologise to the Minister but actually it was not the Bristows opinion; the 39-page opinion that I mentioned is actually from Brick Court Chambers, and it is very comprehensive. It makes it very clear that if we are to sign up, or to continue with our intention to sign up, we will have to recognise the jurisdiction of the European Court of Justice and there will be no getting out of that. That is what makes this so ironic in the circumstances.

[Lord Henley]

I look forward to reading the opinion that has emanated from Brick Court Chambers in due course. I was responding, I thought, to the points that the noble Lord had made about Bristows.

[Lord Clement-Jones]

That was the noble Lord, Lord Adonis.

[Lord Henley]

I apologise to the noble Lord, Lord Adonis. I will no doubt study, as will my officials, both the Bristows letter and the opinion from Brick Court.