Section 14 - Costs and expenses in infringement proceedings etc

     89.     Section 106 requires the court, when making an award of costs (or in Scotland expenses) in certain proceedings under the 1977 Act, to have regard to all the relevant circumstances, including the financial position of the parties. In the existing section 106, that requirement is imposed only in relation to proceedings under section 40 (compensation of employees for certain inventions: see paragraphs 61 - 65 above).

     90.     Section 14 amends section 106 to extend the range of proceedings in which the courts are required to take into account the financial position of the parties, as a relevant factor in deciding on an award of costs.

     91.     Subsections (2) and (3) amend the existing section 106(1), and insert a new section 106(1A) setting out the range of proceedings to which section 106 applies. In addition to proceedings under section 40, section 106 now extends to all patent disputes in which infringement is at issue. These are, namely: infringement proceedings (under section 61 or 69); proceedings for a declaration or declarator of non-infringement under section 71; and proceedings for groundless threats under section 70. It is to be noted that the validity of the patent may be put in issue in such proceedings (for instance as a defence to a claim for infringement under section 61). In such a case, section 106 applies also to any award of costs relating to the issue of validity raised in those proceedings. In contrast, it does not extend to any proceedings, such as those under section 72, which do not involve any issue of infringement (but only involve an issue of validity).

     92.     Section 106 does not, of course, prevent any other relevant circumstances from being taken into account by the court in exercising its discretion as to costs. This is consistent with the general duty to have regard to all the circumstances of the case (including, for example, the conduct of the parties) in awarding costs in civil proceedings which arises, in England and Wales, under rule 44.3 of the Civil Procedure Rules. However, in the case of proceedings covered by section 106, the financial position of the parties is deemed to be one of those relevant circumstances.

     93.     Subsection (4) is a transitional provision which ensures that these amendments to section 106 apply only to proceedings which are launched on or after the date on which the amendments come into effect.

Section 15 - Security for costs

94.     This section substitutes a new section 107(4) of the 1977 Act which makes new provision in respect of the comptroller's power to award security for costs (or expenses in Scotland). Although the new power is expressed in more general terms than the existing one, it is made subject to "prescribed conditions" being met. In prescribing those conditions, it is intended to impose similar conditions to those applicable to the courts, in England and Wales, under rule 25.13 of the Civil Procedure Rules. In particular this will mean that due account can be taken of the ability to enforce judgments in other jurisdictions under the Brussels and Lugano Conventions, and under Council Regulation (EC) No.44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The condition related to residing or carrying on business in the United Kingdom is removed from section 107(4), as is the specific list of proceedings in which security for costs can be sought.

Section 16 - Amendments, repeals and revocations

Schedule 2 paragraph 6

     95.     Paragraph 6 amends section 16 of the 1977 Act. This section requires the comptroller to publish a patent application, and (in conjunction with section 118) allows the public to see all the relevant papers on the file of a patent application. The amendment made by paragraph 6 enables rules to be made setting out the circumstances in which an inventor's name and address can be withheld from the publicly-available patent application file. Rules may also be made setting out the circumstances in which an inventor's name may be withheld from the front page of the specification of a published patent application (the 'A-specification').

Schedule 2 paragraphs 7 and 23

96.     The RRO will insert new provisions into the 1977 Act to provide for the reinstatement (section 20B) or resuscitation (section 117A) of patent applications in certain circumstances. The provisions protect third parties from being sued for infringement if they have, in good faith, started to use the invention between termination or withdrawal of the patent application and its subsequent reinstatement or resuscitation. Paragraphs 7 and 23 ensure that the Crown is not liable for payment to the patent proprietor if the Crown has, in good faith, started to use the invention between the patent application being terminated and reinstated (under section 20B) or between the patent application being withdrawn and resuscitated (under section 117A).

Schedule 2 paragraph 8

     97.     The effect of paragraph 8 is to update some terminology in section 22 of the 1977 Act, and to address an anomaly caused by removal of duties from the United Kingdom Atomic Energy Authority. Section 22 concerns information in patent applications which might be prejudicial to the defence of the realm or the safety of the public.

98.     Sub-paragraphs (2) and (3) substitute the words "national security" for "defence of the realm" in the existing heading of section 22, in section 22(1) and in paragraphs (a), (c) and (d) of existing section 22(5). This update of the terminology ensures that the comptroller can make directions in any circumstance where there is a need to protect the national security interests of the United Kingdom.

     99.     Sub-paragraph (4) amends existing section 22(6), essentially to maintain the existing requirements, but to remove references to the United Kingdom Atomic Energy Authority (UKAEA), which no longer has particular responsibility regarding patent applications relating to atomic energy. The existing provision permits the Secretary of State to seek a report from the UKAEA in order to decide whether publication or communication restrictions should continue to apply to sensitive information. Sub-paragraph (4) replaces references to the UKAEA in section 22(6) with references to a government body with responsibility for the production or use of atomic energy or research.

Schedule 2 paragraph 9

     100.     This paragraph adds a new subsection (4) to section 24. When a patent is granted, existing section 24(3) requires the comptroller to publish the patent as granted, and (amongst other things) also to publish the inventor's name. The new section 24(4) makes clear that the comptroller will no longer be required to publish the inventor's name, where the inventor has waived his right to be mentioned.

Schedule 2 paragraph 11

     101.     This paragraph makes a minor amendment to section 41(10), which concerns the enforcement in Scotland of an order, made under section 40, for compensation for an employee-inventor. The wording of section 41(10) is thereby brought into conformity with the existing wording in sections 93(b) and 107(3). It is also made consistent with the wording of new section 61(7)(b), as provided in section 11.

Schedule 2 paragraphs 14, 16, 17 and 28

     102.     Paragraphs 14, 16 and 17 replace the obsolete word "plaintiff", which appears in the existing sections 61, 63 and 70, with the modern term "claimant" now used in civil proceedings in England and Wales. The new section 70(2) and (2A), provided by section 12, introduces the term "claimant" into the 1977 Act for the first time, and these paragraphs make corresponding amendments to ensure consistency. The Scottish term "pursuer" is left unchanged. Paragraph 28 takes account of the fact that, in Northern Ireland, the term "plaintiff" is still current. It amends section 131 (which deals with the interpretation of the 1977 Act in Northern Ireland) in order to make clear that "claimant" includes "plaintiff" when the Act is applied in Northern Ireland.

Schedule 2 paragraph 15

     103.     This paragraph makes a minor amendment in order to correct the reference in section 62(2) to the period which is specified in section 25(4).

Schedule 2 paragraph 18

104.     This paragraph clarifies the position in relation to revocation of a patent by the patent proprietor. It makes explicit that the reference to "any person" applying for revocation in section 72(1) does include the proprietor of the patent in question. The proprietor would have to show that the patent should be revoked on one or more of the grounds set out in section 72(1). The amended provision operates in conjunction with the amendment to section 36(3) made by section 9, which makes clear that, unless co-owners agree that it should be possible, one co-owner may not seek revocation of the patent against the wishes of the others.

Schedule 2 paragraph 19

105.     This paragraph amends section 75 in order to allow a patent proprietor to propose amendments during the course of any proceedings in which it is possible for the validity of his patent to be put in issue. Therefore it is no longer necessary for validity actually to have been put in issue before the proprietor can apply to amend under section 75.

106.     This paragraph removes uncertainty in the situation, which arose in Norling v Eez-Away [1997] RPC 160, where a proprietor who is involved in proceedings in which validity could be, but has not actually been, put in issue seeks to amend his patent under either section 75 or section 27. The proceedings in which validity may be put in issue are set out in section 74(1): infringement proceedings, proceedings concerning groundless threats, proceedings to obtain a declaration of non-infringement, revocation proceedings and disputes over Crown use.

Schedule 2 paragraph 24 and paragraph 26, sub-paragraph (3)

107.     Paragraph 24 amends section 120 in order to give the comptroller the power to give directions regarding certain procedural matters. In consequence of the amendments made by paragraph 24, the Patent Office's hours of business and excluded days (in relation to patents matters) are no longer prescribed by rules made by the Secretary of State. Instead, the comptroller can specify these matters in directions. This includes the ability to give different directions for different classes of business; for example, varying the hours of business which apply to the filing of patent applications. However, the manner in which such directions are to be published will be prescribed by rules. It is the intention that such directions will be published by means of electronic notices, in official journals, and on the Patent Office website.

108.     Paragraph 26(3) inserts a new subsection (2A) in section 123. This enables the comptroller to specify in directions the content and layout of the Patents Forms, so that the forms need no longer be prescribed by rules. Again, it is intended that the comptroller will be required by rules to publish such directions by means of electronic notices, in official journals and on the Office's website. Rules will continue to require the use of forms when prosecuting a patent application, and when dealing with the Office in other matters.

Schedule 2 paragraphs 25(a) and 25(b)

109.     These paragraphs amend section 121 in order to clarify the position with regard to the laying before Parliament of the comptroller's annual report. The effect of article 6 of the Patent Office Trading Fund Order 1991 (SI 1991 No.1796) is that the requirement of section 121 is satisfied if a report for each financial year is laid on or before 30th November of the following financial year. This requirement is now on the face of the 1977 Act, and article 6 is revoked by section 16(3).

Schedule 2 paragraph 26, sub-paragraph (2)

     110.     This sub-paragraph modifies one of the existing powers to make rules in section 123(2) of the 1977 Act. Section 123(2)(i), as amended by paragraph 26(2), allows rules to set out the way in which an inventor may be identified in respect of a patent or patent application. The new section 123(2)(i) also enables rules to be made subjecting the waiver of the inventor's rights to be mentioned (in section 13(1) of the 1977 Act) to acceptance by the comptroller.

Schedule 2 paragraph 26, sub-paragraph (4)

111.     Paragraph 26(4) repeals section 123(4) and (5) of the 1977 Act. The effect is that the Treasury's consent is no longer required for the making by the Secretary of State of rules prescribing Patent Office fees or for the determination by the Secretary of State of the remuneration of advisers appointed to assist the comptroller in proceedings under the 1977 Act. Rules prescribing fees will continue to be made by the Secretary of State and be subject to annulment in accordance with a resolution of either House of Parliament.

Section 17 - Commencement etc

     112.     Subsection (1) of this section allows the provisions of the Act to be brought into force by commencement orders. However, subsection (2) ensures that the provisions in Schedule 2 which relate to the RRO come into force automatically on the commencement of the RRO itself.

     113.     Subsection (3) allows a commencement order to bring a provision into force on different days for different purposes, and subsection (4) permits an order to make (a) supplementary, incidental or consequential provision, or (b) transitory, transitional or saving provision.

     114.     Subsection (5) ensures that an order which contains any supplementary, incidental or consequential provision is subject to the negative procedure - but an order which contains only transitory, transitional or saving provision is not subject to such a procedure. Subsection (6) makes clear that the provision made under subsection (4) may amend or repeal any existing primary or secondary legislation. However, subsection (7) ensures that an order which adds to, replaces or omits any part of an Act must be subject to the affirmative procedure.

Section 18 - Short title and extent

     115.     This section ensures that the Patents Act 2004 has the same territorial extent as the Patents Act 1977. As made clear in paragraph 14 above, this means that the 2004 Act extends to the whole of the United Kingdom and, subject to any modifications made by Order in Council, it will also extend to the Isle of Man.

COMMENCEMENT

116.     The provisions of this Act will come into force in accordance with the provisions of one or more commencement orders made by the Secretary of State. The aim is to bring the provisions which align the 1977 Act with EPC 2000 into force at the same time as the coming into force of that Convention. The provisions relating to the RRO will come into force with the commencement of the RRO.

HANSARD REFERENCES

     117.     The following table sets out the dates and Hansard references for each stage of this Act's passage through Parliament.

Royal Assent - 22nd July 2004     House of Lords Hansard     Vol. 664 Col. 333

                         House of Commons Hansard     Vol. 424 Col. 514

     ANNEX TO EXPLANATORY NOTES

     PATENTS ACT 2004:

     AMENDMENTS TO THE PATENTS ACT 1977

     Section 1 - Patentable inventions

(1) A patent may be granted only for an invention in respect of which the following conditions are satisfied, that is to say -

     (a) the invention is new;

     (b) it involves an inventive step;

     (c) it is capable of industrial application;

(d) the grant of a patent for it is not excluded by subsections (2) and (3) or section 4A below;

and references in this Act to a patentable invention shall be construed accordingly.

[ Subsections (2) to (5) are unchanged ]

     Section 2 - Novelty

     (6) In the case of an invention consisting of a substance or composition for use in a method of treatment of the human or animal body by surgery or therapy or of diagnosis practised on the human or animal body, the fact that the substance or composition forms part of the state of the art shall not prevent the invention from being taken to be new if the use of the substance or composition in any such method does not form part of the state of the art.

     Section 4 - Industrial application

     (1) Subject to subsection (2) below, An invention shall be taken to be capable of industrial application if it can be made or used in any kind of industry, including agriculture.

     (2) An invention of a method of treatment of the human or animal body by surgery or therapy or of diagnosis practised on the human or animal body shall not be taken to be capable of industrial application.

     (3) Subsection (2) above shall not prevent a product consisting of a substance or composition being treated as capable of industrial application merely because it is invented for use in any such method.

     Section 4A - Methods of treatment or diagnosis

     (1) A patent shall not be granted for the invention of -

     (a) a method of treatment of the human or animal body by surgery or therapy, or

     (b) a method of diagnosis practised on the human or animal body.

     (2) Subsection (1) above does not apply to an invention consisting of a substance or composition for use in any such method.

     (3) In the case of an invention consisting of a substance or composition for use in any such method, the fact that the substance or composition forms part of the state of the art shall not prevent the invention from being taken to be new if the use of the substance or composition in any such method does not form part of the state of the art.

     (4) In the case of an invention consisting of a substance or composition for a specific use in any such method, the fact that the substance or composition forms part of the state of the art shall not prevent the invention from being taken to be new if that specific use does not form part of the state of the art.

     Section 8 - Determination before grant of questions about entitlement to patents, etc

     (3) Where a question is referred to the comptroller under subsection (1)(a) above and -

     (a) the comptroller orders an application for a patent for the invention to which the question relates to be so amended;

     (b) any such application is refused under subsection 2(c) above before the comptroller has disposed of the reference (whether the reference was made before or after the publication of the application); or

     (c) any such application is refused under any other provision of this Act or is withdrawn before the comptroller has disposed of the reference, but after the publication of the application (whether the application is refused or withdrawn before or after its publication)

     the comptroller may order that any person by whom the reference was made may within the prescribed period make a new application for a patent for the whole or part of any matter comprised in the earlier application or, as the case may be, for all or any of the matter excluded from the earlier application, subject in either case to section 76 below, and in either case that, if such a new application is made, it shall be treated as having been filed on the date of filing the earlier application.

     Section 11 - Effect of transfer of application under section 8 or 10

     (3A)     If, before registration of a reference under section 8 above resulting in the making of an order under subsection (3) of that section, the condition in subsection (3)(a) or (b) above is met, the original applicant or any of the applicants or the licensee shall, on making a request within the prescribed period to the new applicant, be entitled to be granted a licence (but not an exclusive licence) to continue working or, as the case may be, to work the invention so far as it is the subject of the new application.

     (4) Any such licence A licence under subsection (3) or (3A) above shall be granted for a reasonable period and on reasonable terms.

     (5) Where an order is made as mentioned in subsection (2) or (3A) above, the person in whose name the application is to proceed or, as the case may be, who makes the new application or any person claiming that he is entitled to be granted any such licence may refer to the comptroller the question whether the latter is so entitled and whether any such period is or terms are reasonable, and the comptroller shall determine the question and may, if he considers it appropriate, order the grant of such a licence.

     Section 12 - Determination of questions about entitlement to foreign and convention patents, etc

     (6) In the following cases, that is to say -

     (a) where an application for a European patent (UK) is refused or withdrawn, or the designation of the United Kingdom in the application is withdrawn whether before or after publication of the application but before a question relating to the right to the patent has been referred to the comptroller under subsection (1) above or before proceedings relating to that right have begun before the relevant convention court;

     (b) where an application has been made for a European patent (UK) and on a reference under subsection (1) above or any such proceedings as are mentioned in paragraph (a) above the comptroller, the court or the relevant convention court determines by a final decision (whether before or after publication of the application) that a person other than the applicant has the right to the patent, but that person requests the European Patent Office that the application for the patent should be refused; or

     (c) where an international application for a patent (UK) is withdrawn, or the designation of the United Kingdom in the application is withdrawn, whether before or after the making of any reference under subsection (1) above but after or the publication of the application;

     the comptroller may order that any person (other than the applicant) appearing to him to be entitled to be granted a patent under this Act may within the prescribed period make an application for such a patent for the whole or part of any matter comprised in the earlier application (subject, however, to section 76 below) and that if the application for a patent under this Act is filed, it shall be treated as having been filed on the date of filing the earlier application.

Section 16 - Publication of application

(1) Subject to section 22 below and to any prescribed restrictions, where an application has a date of filing, then, as soon as possible after the end of the prescribed period, the comptroller shall, unless the application is withdrawn or refused before preparations for its publication have been completed by the Patent Office, publish it as filed (including not only the original claims but also any amendments of those claims and new claims subsisting immediately before the completion of those preparations) and he may, if so requested by the applicant, publish it as aforesaid during that period, and in either event shall advertise the fact and date of its publication in the journal.

[ Subsection (2) is unchanged ]

     Section 20B - Effect of reinstatement of applications

     (to be inserted by the RRO)

     (6A) The above provisions apply in relation to the use of a patented invention for the services of the Crown as they apply in relation to infringement of the rights conferred by publication of the application for a patent (or, as the case may be, infringement of the patent).

     "Patented invention" has the same meaning as in section 55 below.