I do not know to what extent you, Mr Speaker, would permit the debate to range across the entire Hargreaves agenda. We have introduced a small but perfectly formed Bill that delivers part of that agenda, but it is an important part that will help the design industry, in particular. I will try to focus my remarks on what is actually in the Bill. The Government, as a whole, have already implemented some of Hargreaves and there is more to come. However, given that this is the Second Reading of an important Bill, particularly for the design industry, I hope that the right hon. Gentleman will understand that I will try to focus on that.
The crucial change set out in the Bill—the introduction for the first time of criminal sanctions for infringement of design rights—is not intended to have a chilling effect on innovation or legitimate and competitive risk taking in business. The offence has been carefully drafted to ensure that innocent infringement is not caught. In addition, it will be measured to the high criminal standard of proof of “beyond reasonable doubt”.
That measure sparked much debate in the other place, and our colleagues there made a number of changes to the clause to improve and tighten the sanction. The Government proposed an amendment to ensure that incidental use of a copied design would not be criminalised. Following discussions with industry, an additional amendment was made to provide a defence for those having a reasonable belief of non-infringement. That additional defence was welcomed by the Opposition and industry representatives. We have continued to talk with businesses big and small. Some still have concerns about the scope and clarity of the new offence. We are continuing our discussions with them—this relates to the earlier intervention by my hon. Friend the Member for North Wiltshire (Mr Gray)—and I hope to say more about it in Committee.
Our colleagues in the other place have sent us a much improved Bill. We have continued to improve it since it left the other place as other concerns have arisen. The intellectual property Minister, his officials and I have continued to engage with a number of interested parties, such as representatives of the pharmaceutical, aerospace and IT industries, on their concerns. That included discussions on the detailed wording of the qualification criteria for unregistered design rights. We have listened carefully, and I am pleased to announce that I will be tabling an amendment to the clause in Committee in the light of businesses’ concerns that it is unduly broad. It will ensure that the principle of reciprocity between countries is maintained. I am grateful to the IP Federation for raising the issue so effectively.
The Bill also makes a number of small but important changes to the definitions and legal framework protecting UK designs. They all recognise the need, identified by Hargreaves, to simplify and clarify the designs system. The measures include changing the standard position
for ownership to make the designer the default owner of a design, rather than the commissioner. Such changes bring UK and EU design laws into harmony and provide a more logical and simplified system for designers and design users.
In addition, the Bill provides protections from infringement for businesses and individuals using designs in specific circumstances. For example, allowing use of an unregistered design for teaching purposes, such as carpentry in a school, is a sensible measure. So too is the provision of a defence for third parties when, in good faith and without copying, they have made preparations to use a design before a similar design is registered. This and other measures in the first half of the Bill provide more certainty for business and are aimed at modernising and improving the design framework.
The Government’s consultation on designs sought views on the introduction of a non-binding opinions service along the same lines as that currently available for patents, and the majority of respondents supported that. As well as this, the Bill will therefore extend the patent opinions service. That means that the Intellectual Property Office will provide a wider range of expert, but non-binding, opinions on IP in disputes. The existing opinions service provides a low cost means of resolving such disputes, in many cases without a need to seek redress in the courts. Almost 70% of respondents to an IPO review who had used the service considered that it should be extended to other areas of IP. Over 65% wished to see it extended to registered designs and 40% wished to see it extended to the UK unregistered design right. Many of these users are small and medium-sized enterprises that could not afford the high costs of civil litigation. We are therefore pleased that the Bill is going to extend the non-binding opinions service.
The Bill also makes important changes to the patents framework. In particular, innovative businesses in the UK have been waiting for over 40 years for a single European patent system. Creating a business-friendly patent regime for Europe is an important element of the Government’s growth strategy. My right hon. Friend the Prime Minister was instrumental in the negotiations on the unitary patent and the unified patent court. I am therefore very pleased that the Bill gives us the power to implement the pan-European court structure that will underpin the long-awaited unitary European patent system. [Interruption.] I was overcome with emotion at the triumph of the Prime Minister’s negotiating skills on this. The unitary patent could save UK businesses up to £20,000 per patent in translation costs alone—a saving of enormous benefit. Former Supreme Court justice Lord Walker of Gestingthorpe described the unitary patent as
“a remarkably bold step forward, on which successive Governments are to be congratulated, because it has been a very long haul indeed.”
Establishment of the court will further enhance the UK’s reputation as a centre of excellence for commercial dispute resolution, especially in the field of life science patent litigation.
The Hargreaves review stressed the importance of intellectual property for innovation and growth. It argued, however, that policy development in this area had not always been sufficiently directed towards those objectives because of an incomplete evidence base and strong lobbying activity. Innovative businesses grow twice as
fast in jobs and in sales as businesses that fail to innovate. The Government therefore want to ensure that the IPO has a sharpened focus on innovation and growth. The Bill requires a report to be submitted to Parliament on how the activities of the IPO contribute to this goal. The report will also increase transparency and allow a wider range of interested parties to scrutinise the work of the IPO.