Draft Patents (Amendment) (EU Exit) Regulations 2018 Draft trade marks (Amendment Etc.) (EU Exit) Regulations 2018

Richard Graham Excerpts

Thursday 17th January 2019 General Committees

[Chris Skidmore]

It is a pleasure to serve under your chairmanship, Sir Henry. Intellectual property is a vital part of the UK’s knowledge economy. The Government’s ambition, as part of our industrial strategy, is for the UK to be the most innovative country in the world, with a regulatory environment that supports that goal and encourages business to develop new ideas and technologies. The UK is renowned for having one of the best IP regimes in the world, and that will continue to be the case after our departure from the European Union. We will continue to deliver high-quality rights-granting services, lead best practice in enforcing IP rights, and retain our central involvement in international discussions on the development of a global IP system.

The Intellectual Property Office, which I am looking forward to visiting in Newport tomorrow morning, has been preparing for a range of outcomes to our negotiations with the EU. It is working to ensure that the IP system in the UK continues to function effectively once we have left the EU. The regulations, which were laid before the House on 28 November, form part of that preparation. They are necessary to ensure that the patent and trademark systems continue to function properly if no deal is agreed. In doing so, they give as much certainty and clarity for businesses as possible. The draft instruments use the powers granted by the European Union (Withdrawal) Act 2018 to address deficiencies in retained law that would arise upon exit.

On the Patents (Amendment) (EU Exit) Regulations 2018, the majority of UK patent law is domestic in origin or derives from various international agreements. Only a few specific areas are governed by EU legislation, and it is those that this instrument addresses. It focuses on supplementary protection certificates, which are a special type of IP right that applies to patented pharmaceuticals or agro-chemicals, which have to be authorised before they can be sold on the market. Because extensive testing is required to show that those products are safe for use, the authorisation process can prevent the full term of protection given by the patent from being exploited. SPCs are intended to offset that loss of time by giving an authorised product up to five and a half years’ additional protection after the expiry of the patent. They are provided by EU regulations that will be retained under the withdrawal Act.

SPCs take effect at a national level, so it will not be necessary to convert or replace existing rights on exit, as UK SPCs will continue to be enforced. However, it is still important to ensure that the current system remains functionally the same, so that users have certainty about the scope of their rights and the conditions in which those rights operate. The instrument therefore makes changes to the retained law, so that the SPC system can continue to operate effectively.

[Richard Graham (Gloucester) (Con)]

I have received a letter from the chief patent counsel of Lilly UK, outlining their concerns about the potential erosion of critical intellectual property protection. The life science industry is worried that patients might not be able to continue to access new and innovative medicines. Will the Minister confirm that the UK will remain a hub for world-leading research in the life sciences?

[Chris Skidmore]

Absolutely. That is why these regulations are so important in the event of a no-deal exit. Obviously, under the EU withdrawal deal and the framework for agreeing a deal with the EU, those rights will automatically be protected. Pharmaceutical companies with significant research and development industries—companies such as GlaxoSmithKline, AstraZeneca and Pfizer—use the SPC regime. In 2016, nearly £4 billion was invested in research and development through the pharmaceutical industry.

I want to mention some of the individual drugs that have benefited from an SPC regime being in place. The blockbuster anti-cancer drug Humira was initially developed by Cambridge Antibody Technology in the UK. Cervarix from GSK, a vaccine that protects against cervical cancer, had global sales of £123 million in GSK’s last quarterly statement. My hon. Friend makes an incredibly valid point. We need certainty and stability to ensure that companies are able to continue to develop future products through R&D. Having this stability will ensure that future products can benefit from coming to market, and from the additional five and a half years’ protection that the SPC guarantees.

In particular, the draft instrument confirms that authorisations granted in the UK can continue to be used as the basis for an SPC application, and to determine the duration of an SPC. It also ensures that courts and tribunals competent to decide legal challenges to SPCs in the UK retain that jurisdiction. Other technical adjustments ensure that the SPC system is legally sound immediately after exit, and avoid discontinuity.

This approach of maintaining systems that users are familiar with also applies to other areas of patent law dealt with in this instrument, including the interaction of plant variety rights and the granting of compulsory licences for manufacturing a patented medicine for export to a country with a public health need.

The second statutory instrument before the Committee deals with European trademarks and their continued protection after our exit from the EU. It is currently possible to obtain trademark protection in the UK under the Trade Marks Act 1994, and in the European Union under the European trade mark regulation. The two systems run in parallel, so protection covering the UK may be obtained under either. There is also a great degree of harmonisation between the systems, so the protection provided is essentially the same.

Around 1.3 million EU trademarks are currently enforced, and around 10% are owned by UK businesses. After our exit from the EU, trademarks registered under EU regulation would no longer cover the United Kingdom, as it would cease to be a member state. To avoid any loss of rights, the Government have committed to the continued protection of EU trademark rights in the UK.

This instrument provides those replacement domestic rights on exit day. These created UK rights will be fully independent UK trademarks, which can be challenged, signed, licensed or renewed separately from the original EU trademark. This instrument also provides that these rights retain their original EU filing date and any other relevant dates relating to the original application.

[Richard Graham]

This is very important for three of the greatest trademarks in the United Kingdom: single Gloucester cheese, double Gloucester cheese and the Gloucestershire Old Spot pig. Could the Minister confirm that these trademarks will be protected regardless of whether we leave the European Union with a deal?

[Chris Skidmore]

Absolutely. Trademark protections that are currently in force will continue to be in force, as a result of these regulations. The specific brand names that my hon. Friend talked about are actually what are called agricultural geographical indications—GIs. They fall within the remit of the Department for Environment, Food and Rural Affairs, but we recognise the close relationship between trademarks and GIs, and officials continue to work closely to provide a robust framework across all forms of intellectual property.

The policy on non-agricultural GIs is handled by the Intellectual Property Office. They are protected by the trademark system and therefore will continue to be protected in the UK in the same manner as outlined for trademarks. My hon. Friend, as the MP for Gloucester, cares passionately about protecting the origins of his cheese; having been on this Committee, he can go back to his constituents and tell them that he is doing all he can to protect the trademarking system in the UK, and to ensure stability and continuity for the cheese-making industry—and particularly for his constituents, and for employers in the locality.

The instrument also sets out how applications for EU trademarks that are pending on exit day, of which there are an estimated 85,000, will be handled. Those with pending applications will be able to file a new application with the Intellectual Property Office, claiming the earlier filing date of the EU application, within nine months of exit.

In conclusion, these regulations are a vital part of ensuring the intellectual property system continues to function if the no-deal outcome arises. They are essential for safeguarding rights and to provide maximum certainty and clarity. I commend them to the Committee.