Intellectual Property (Unjustified Threats) Bill [Lords] — House of Commons, 2017-03-21
Topic: Domestic Commerce
William Roffen Esterson (Labour, Centre-left): I beg to move, That the clause be read a Second time Intellectual property makes a significant contribution to the UK economy each year. In 2014, UK firms invested an estimated £133 billion in knowledge assets, compared with £121 billion in tangible assets. As the Intellectual Property Office notes, UK investment in intangible assets that are protected by intellectual property rose from £47 billion in 2000 to £70 billion in 2014, and is estimated to represent 4.2% of total GDP. What is more, the UK system of regulating intellectual property is considered to be one of the best: it was rated No. 3 by business in the 2016 Taylor Wessing global IP index in respect of obtaining, exploiting and enforcing the main types of intellectual property rights. It is clear that intellectual property is of great importance to the UK economy, so the impact of leaving the European Union on IP and the provisions in the Bill is vital to the economy. It is of great interest to businesses, which value certainty, and it is crucial to potential investors in businesses in the United Kingdom The Bill will apply to patents, trademarks and designs. The Minister stated in Committee, and in a written answer on 20 October last year, that the European Patent Office was established by international treaty and that our participation in its work will be unaffected by our leaving the EU. The suggestion is that patents will be relatively untouched by Brexit; it is to be hoped that the Minister’s confidence is not misplaced. Several IP rights that derive from EU regulations will no longer apply to the UK, and the impact of Brexit is far from clear at this stage. As the Chartered Institute of Patent Attorneys recently commented: "The continued validity of these rights in the UK is uncertain. Transitional agreements may be negotiated to allow time for rights holders to convert these into national rights or to file separate national rights... The government has remained silent on whether or not it intends to implement the new Trade Mark Directive into UK domestic law." The Minister signalled in Committee the Government’s intention to ratify the unified patent court agreement by the end of April. The court will deal with disputes relating to European patents and help the business that the Bill seeks to assist by removing the threat of unjustified litigation—a point made by my hon. Friend the Member for Garston and Halewood (Maria Eagle) in Committee. Will we still be members of the court after we leave the EU? The court is part of the effort to reduce costs across jurisdictions and make it easier to do business. As we prepare to leave the EU, the last thing we need is additional costs on businesses, so clarity is needed about our membership of the court. The Minister said in Committee that decisions had not yet been taken, so will he provide an update and confirm that he understands just how important it is that we minimise costs across jurisdictions, including those relating to intellectual property rights? What is his view on our potential membership of the patent court after we leave the EU The CIPA said: "For the UK to continue participating after Brexit, there would need to be a new international agreement with the participating Member States and the UK to provide compatibility with EU law... If the UK does not remain a member of the UPC…there will be a need for further transitional provisions to protect any rights acquired or cases in progress at the time the UK leaves. It is still unclear whether UK European Patent Attorneys will be able to represent parties in the different Divisions of the UPC after Brexit." It went on to say: "CIPA has a strong preference for the UK to participate in the UP and UPC system, if a solid legal basis for this can be agreed." Given the UK’s leading position in patents and patent law, it makes sense to do all we can to maintain our position and to ensure that confidence in our position remains as high as possible. It is important that we avoid taking a step backwards on IP law and losing the potential benefits that the development of single European patent protection will bring. The economic and competitive advantages of such protection are clear enough. The alternative of having a separate UK system, with the likely need for rights holders to apply for UK and EU protection separately, will mean additional burdens for UK businesses and for our economy, compared with the UK remaining a central part of the European-wide patent system As my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) said in Committee, it is vital that the Minister takes all steps to ensure that patent law and IP law more generally do not take a retrograde step following Brexit. IP is how innovation is rewarded; it is fundamental to ensure our ability to deliver a high-pay economy and prosperity, and to Britain’s promise that the next generation is better off than the previous one. Since 2010, we have seen living standards fall while the economy as a whole has grown. The people of this country cannot afford to miss opportunities, including this one. The alternative of a race to the bottom, a low-wage economy and our competing as some kind of tax dodger’s paradise off the coast of continental Europe will not deliver better living standards Intellectual property is one of many ways in which we must build on our success as a country and not allow decline. How intellectual property rights are protected, and how they are seen to be protected during the Brexit negotiations, will be crucial to delivering and enhancing business and investor confidence and to getting the best possible outcome from the negotiations. The Prime Minister may not wish to give a running commentary, but she and her Ministers need to reassure businesses, their staff and the whole country that everything is being done to secure our future. That is why I tabled the new clause to call for the Government to review the impact of Brexit on the IP provisions in the Bill. A report after a year would not only help to bring sovereignty back to Parliament—something we heard a great deal about during the referendum debates—but help UK businesses and foreign investors to understand the post-Brexit intellectual property world with respect to the provisions in the Bill. The protections being harmonised in the Bill are important to help to protect our businesses, ensure a fair market and encourage entrepreneurs and inventors, and especially to ensure opportunity for smaller businesses. Nevertheless, those businesses, entrepreneurs and inventors all want to know, as far as possible, what the arrangements and relationships with the EU will be like post-Brexit The law firm Charles Russell Speechlys says: "Discussions are taking place regarding the post-Brexit options for IP. National IP rights are unlikely to be affected post-Brexit. Pan-European IP rights will be affected. Trade marks and designs are likely to be the IP rights most affected but it will impact on other IP rights as well On leaving the EU, the UK will no longer automatically be covered by EU trade marks. An orderly transitional period is expected with the potential to split existing EUTMs into UK national and EUTMs post-Brexit (subject to negotiation and relevant supporting legislation). Trade mark owners will need to reinstate lapsed UK marks which have been subsumed into EUTMs by seniority but it is not yet clear how that will work."