Intellectual Property Bill

DPRR/13-14/10

Intellectual Property Bill

Memorandum by the Department for Business, Innovation and Skills for the Delegated Powers and Regulatory Reform Committee

Introduction

1.This memorandum identifies the provisions for delegated legislation in the Intellectual Property Bill.

In respect of each power sought, the memorandum sets out:

• The context and purpose of the power;
• The justification for seeking the power;
• The extent to which the power is novel, or draws on precedents;
• The justification for the choice of Parliamentary scrutiny procedure proposed for the power sought.

Background

2.Part 1 of the Bill introduces changes to the UK design framework. These result from work which followed the Hargreaves Review of Intellectual Property and Growth, commissioned by the Prime Minister and published in May 2011. This review acknowledged that the system for protecting designs was difficult for business to understand and to use effectively. Consequently, the Intellectual Property Office (IPO) started a programme of work to establish whether and, if so, how to improve the system. In September 2011, it published a call for evidence and associated online survey. Responses to those, as well as the results of IPO funded research, fed into an assessment of the need to reform the designs framework, which the IPO published in December 2011. This was followed in July 2012 by a consultation with proposals to amend the system. The clauses in relation to design have the following purposes:

• To amend and –where appropriate -simplify the existing legislative framework;
• To provide an alternative avenue for appeals against a decision of the registrar, by means of an “Appointed Person”;
• To provide for an opinions service, similar to that in operation for patents.

3.The IPO launched the patents opinions service in October 2005 to help businesses resolve patent disputes by providing a quick and affordable assessment relating to the validity or infringement of patents. A consultation issued in June 2012 proposed to expand the opinions service to extend the questions on which a patent opinion may be sought, to expand the service to offer opinions as to whether a Supplementary Protection Certificate is invalid or infringed and to confer power on the IPO to initiate revocation action against a patent that an opinion concludes is invalid. Part 2 of the Bill contains provisions that make a number of technical amendments to the provisions of the Patent Act 1977. In addition Part 2 makes provision for the extension of the current patents opinion service to cover additional matters to those which it currently applies and the implementation into UK law of the provisions of the Agreement on a Unified Patent Court made in Brussels on 19th February 2013

4.Part 3 of the Bill introduces a requirement on the Secretary of State to report to Parliament on the activities of the Patent Office, on an annual basis. It also includes provision in relation to recognition of foreign copyright works and performances.

5.The Department for Business, Innovation and Skills has considered the use of powers in the Bill as set out below and is satisfied that they are necessary and justified.

PART 1: DESIGN

Clause 8: Accession to the Hague Agreement

Power conferred on: Secretary of State

Power exercised by: Order

Parliamentary procedure: Negative resolution procedure

Context and purpose

6.Clause 8 inserts new section 15ZA into the Registered Designs Act 1949. This enables the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs, adopted by the Diplomatic Conference on 2 July 1999, to be given effect in the law of the UK,by order of the Secretary of State.The UK is not currently a signatory to the Geneva Act.The Hague system enables the owner of an industrial design to get protection in a number of countries by filing a single application with the International Bureau of the World Intellectual Property Organisation.

Justification

7.The order may in particular make provision relating to specified matters such as communication of information to the International Bureau and payment of fees, as well as amendments to the 1949 Act. The use of secondary legislation should enable the Secretary of State to make such provision as he thinks fit for giving effect in the UK to the provisions of the Geneva Act of the Hague Convention.

Procedure justification

8.Although the power enables the amendment of primary legislation, the negative resolution procedure was considered appropriate.Accession to the Hague Agreement will offer stakeholders an alternative means of protection to their intellectual property right rather than compelling them to do something. It is envisaged that any changes to the law will be technical in nature, for example, providing for the making of applications for international registrations at the IPO. Further, this provision is similar to section 54 of the Trade Marks Act 1994, which gives effect to the Madrid Protocol - an analogous international agreement for trade marks – that is also subject to the negative resolution procedure.

Clause 9: Power to make rules relating to the inspection of documents kept at the IPO in connection with a registered design

Power exercised by: Rules

Parliamentary procedure: Negative

Context and purpose

9.The current system for inspecting documents held at the IPO is slow, bureaucratic and out of step with modern business practice so this clausemakes provision for a more accessible and streamlined process to enable businesses and individuals to view and receive relevant information from a registered designs file via an online database. Clause 9(5) insertssubsections (6) and (7)into section 22 of the Registered Designs Act 1949, which provide for the cases or circumstances in which documents held at the Patent Office in connection with a registered design may notbe inspected, to be prescribed in secondary legislation (rules).It also provides that such rules may confer a discretion on the registrar.

Justification

10.There are two reasons for providing for a power to make provision by rules rather than through primary legislation. First, the use of secondary legislation allows for the rules to set out in sufficient detail the cases or circumstances in which documents held at the IPO in connection with a registered design may not be inspected. Restrictions inherent in the primary legislative programme make it difficult to achieve this level of detail on the face of the Bill.

11.Secondly, using rules allows these provisions to be future-proofed, in that they may be amended in future without the need to amend primary legislation.

Procedure justification

12.Given the detailed and administrative nature of the rules, it is considered that the negative procedure is appropriate.

Clause 11: Design opinions service

Power conferred on: Secretary of State

Power exercised by: Regulations

Parliamentary procedure: Negative resolution procedure

Context and purpose

13.This clause inserts new section 28A into the Registered Designs Act 1949 and new section 249A into the Copyright, Designs and Patents Act 1988 and enables the Secretary of State to make provision, by regulations, for a design opinions service. The opinions service, which will be similar to the existing patent opinions service,is intended to provide an informal, expeditious and cost effective aid to pursuing litigation: it will help businesses decide whether there is a case to answer before pursuing any dispute more formally through the courts. The regulations will set out the operation and details of the service, including the scope of the service, cases where the registrar does not have to furnish an opinion, fees for using the service and the appeals procedure.

Justification

14.In order to allow greater flexibility, it is sensible to provide that the detailed provision in relation to the Opinions Service should be set out in regulations, rather than on the face of the Bill. Restrictions inherent in the primary legislative programme make it difficult to achieve this level of detail on the face of the Bill.

Procedure justification

15.The making of regulations is to be subject to the negative parliamentary procedure, whichis considered to be an appropriate level of scrutiny for such provision.

Clause 12: Use of directions by the registrar

Power conferred on: Registrar of Designs/Secretary of State

Power exercised by: Directions published in the prescribed manner

Parliamentary procedure: The giving of directions: none;

Publication in the prescribed manner: negative resolution procedure

Context and purpose

16.This clause allows the registrar to issue directions: (a) in relation to hours of business and excluded days, rather than these matters being governed by secondary legislation; and (b) in relation to the content and layout of forms. Similar to patents and trade marks, the manner in which such directions are to be published are to be prescribed by rules (Rules are made by the Secretary of State – see sections 36 and 37 of the Registered Designs Act 1949. These are subject to negative resolution procedure) This is to ensure that the public continue to be well informed of changes to the IPO’s hours and days of business and the details of the forms, with ample notice. In practice, there will be a rule in the relevant secondary legislation for registered designs, setting out a requirement to publish on the IPO website and the official journal.

Justification

17.It is appropriate that such detail be set out in secondary legislation, rather than on the face of primary legislation. Restrictions inherent in the primary legislative programme make it difficult to achieve this level of detail on the face of the Bill.

Procedure justification

18.Rules made under section 36 of the Registered Designs Act 1949 are subject to the negative parliamentary procedure (see section 37(4)). This is considered an appropriate level of scrutiny for such provision.

19.By way of precedent, section 80 of the Trade Marks Act 1994 enables the registrar to give directions specifying hours of business and business days of the Patent Office for the purpose of carrying on business under the Act. In relation to forms, there is similar provision set out in section 123(2A) of the Patents Act 1977, which states that the comptroller may set out in directions any forms which is required by rules and any such directions are to be published in the prescribed manner.

PART 2: PATENTS

Clause 15: Patent opinions service

Power conferred on: Secretary of State

Power exercised by: Rules

Parliamentary procedure: Negative resolution procedure

Context and purpose

20.Section 74A currently provides that a person may request the comptroller to issue an opinion in two cases; (1) whether a particular act constitutes an infringement of the patent or (2) whether the invention is not patentable because it is not new or it does not involve an inventive step (corresponding to the conditions in section 1(1)(a) and (b) of the Patents Act).Clause 15amends current section 74A of the Patents Act 1977, so that the Intellectual Property Office may issue an opinion “on a prescribed matter” in relation to patents, rather than being restricted to the two circumstances set out above.Thus it is intended that opinions may additionally be issued on the grounds for patentability in paragraphs (c) and (d) of section 1(1)and the grounds specified in paragraphs (c) to (e) of section 72(1) (which confers a power on the court or the comptroller to revoke a patent on certain grounds).

Justification

21.Whilst this policy could be delivered by amending section 74A(1) to refer to each of those grounds, in order to provide greater flexibility for the future, Clause 15confers a power on the Comptroller to issue opinions on such matters as may be prescribed in the Patents Rules. Section 123 of the Patents Act contains a general power for the Secretary of State to make rules for regulating the business of the Patent Office in relation to patents.In the first instance it is envisaged that Rules made in pursuance of this power would specify the grounds currently identified in section 74A(1) and include the additional grounds specified above. In addition Clause 15(3) applies the provisions relating to patent opinions to Supplementary Protection Certificates.

Procedure justification and precedent

22.Rules made under section 123 of the Patents Act are subject to the negative parliamentary procedure (see Section 124(2)). This is considered an appropriate level of scrutiny for this delegated power.

Clause 16: Unified Patent Court

Power conferred on: Secretary of State

Power exercised by: Order

Parliamentary procedure: Affirmative resolution procedure

Context and purpose

23.The Agreement for the Unified Patent Court was signed on the 19th February 2013. The Agreement together with EU Regulations 1257/2012 and 1260/2012 will, when they enter into force, create the possibility of applying through the European Patent Office (a non-EU body established in Munich) for a single patent (a patent with unitary effect) which is enforceable throughout the territory of those Member States which are participating in the scheme. The Agreement creates a trans-national court structure which exercises jurisdiction over the patent with unitary effect. This new patent system will run in parallel with national patent systems. It is also possible to apply to the European Patent Office for a bundle of national patents in countries specified in the patent application. Ultimately the court agreement provides for jurisdiction over these patents to be transferred to the Unified Patent Court.

Justification

24.The power is limited to implementing the Agreement in the United Kingdom and aligning the law relating to UK national patents to the provisions in the Agreement, for example those provisions that deal with infringement. Much of the detail is of a kind that is more appropriately dealt with in secondary legislation, such as the making of consequential amendments to UK legislation.

Procedure justification and precedent

25.Given that there may be amendments to primary legislation, the power is subject to the affirmative resolution procedure.

Clause 18 and paragraph6 of the Schedule: European Patent (UK): payment of renewal fee following restoration

Power conferred on: Secretary of State

Power exercised by: Rules

Parliamentary procedure: Negative

Context and purpose

26.Clause 18 and paragraph 6 of the Schedule make provision for the payment of fees in relation to European Patents where the patent is revoked and subsequently restored. The clause allows the Secretary of State to prescribe by Rules the period within which the payment of such fees must be made

Justification

27.The period for the making of payments of fees in the circumstances described is a matter of detail that is best left to secondary legislation.

Procedure justification and precedent

28.This is an extension of the existing powers to make rules in relation to patents conferred by section 123 of the Patents Act 1977

PART 3: MISCELLANEOUS

Clause 21: Recognition of foreign copyright works and performances

Power conferred on: HM the Queen

Power exercised by: Order in Council

Parliamentary procedure: Negative resolution procedure

Context and purpose

29.Clause 21(4) of the Bill substitutes a new section 159 into the Copyright, Designs and Patents Act 1988, which includes a power to make provision by Order in Council, in relation to the application of Part I of the 1988 Act, to countries to which it does not extend. The purpose of this provision is to make the statutory scheme less complex, in particular the secondary legislation made under section 208, which is not easy to follow.

30.Linked to this, Clause 21(6) amends section 206 of the 1988 Act so that provision may be made by Order in Council restricting the application of Part 2 to a country which qualifies by virtue of membership of the Rome Convention. This is to cover the possibility that declarations have been made by that country restricting the application of its obligations under the Rome Convention or under the WIPO Performances and Phonograms Treaty. In addition the power also enables Part 2 to be extended to any country notwithstanding that it is not a party to the Rome Convention.

Justification

31.There is an existing power to make provision by Order in Council in the current section 159, so it is appropriate that the new section 159 should contain the same power.

Procedure justification and precedent

32.The negative procedure is appropriate here, mirroring (for section 159) the current position. It is considered that this is the appropriate level of Parliamentary scrutiny, given the limited, uncontroversial nature of the changes to which such Orders in Council relate. Existing section 159 provides a precedent for such a power.

Clause 21(8): Power to amend in consequence of changes to international law

Power conferred on: Secretary of State

Power exercised by: Order

Parliamentary procedure: Affirmative

Context and purpose

33.Clause 21(8) inserts new section 212A into the Copyright, Designs and Patents Act 1988, which provides for a power to make amendments by Order, so that part 2 may be amended in the event that there are changes to the underlying international law in the area of performance rights– for example, in the event that the Rome Convention is replaced by some other international agreement.

Justification

34.The power is being taken in order to ensure that there is scope to amend primary legislation, to reflect the changes brought about in international law in relation to performance rights.

Procedure justification

35.This power is subject to the affirmative resolution procedure in view of the fact that it allows amendments to be made to primary legislation, as is fitting for a Henry VIII power.

PART 4: GENERAL

Clause 22: Power to make consequential provision

Power conferred on: Secretary of State

Power exercised by: Order

Parliamentary procedure: Affirmative where the order changes primary legislation, otherwise negative

Context and purpose

36.Clause 22confers a power on the Secretary of State by order to make provision in consequence of this Bill, which may include amending, repealing, revoking or modifying any enactment, as well as transitional, transitory or saving provision in connection with the commencement of provision made by the order. In addition the Clause enables transitional, transitory or saving provision to be made.

37.The clause makes it clear that “enactment” includes legislation made Northern Ireland and by the Scottish Parliament and the National Assembly for Wales.

Justification

38.This power to make consequential provision is provided in order to ensure that any consequential amendment which has not yet been identified as being required and amendments to secondary legislation, may be made as necessary. This power is confined to provisions that are consequent on provisions in the Bill.

Procedure justification

39.The Parliamentary procedure to be followed, depends on the content of the order. If the order amends or repeals any provision of primary legislation, it may not be made unless a draft has been laid before and approved by each House of Parliament, as is fitting for a Henry VIII power. If the order does not amend or repeal primary legislation, the negative resolution procedure applies, which is considered appropriate given that such an order would be giving effect to the detailed consequences of organisational changes expressly provided for in primary legislation.