Michael Ahern (Cork East, Fianna Fail)

I move amendment No. 7:

In page 11, to delete lines 25 to 27 and substitute the following:

"the person shall have the right to continue to do the act concerned or, as the case may be, to do that act, notwithstanding the reinstatement of the application and the grant of the patent."

These amendments, while appearing complex and significant, do not involve any change in policy from the Bill as considered in committee. They arise from recent legal advice from the Attorney General's office that the provision in section 37(7)(b) of the Patents Act 1992, which gives power to the Minister to prescribe in rules the protection for third parties, who may have begun to use the invention the subject of a patent in the intervening period between its lapse and restoration, may be too wide. The advice is that the protection for such third parties should be set out in the Act itself rather than in rules under the Act.

The protection for the intervening rights of third parties is currently set out in Rule 38 of the Patent Rules 1992. This protection is very important. Without such protection, third parties would be open to infringement proceedings if they continued to use the invention following the restoration of the patent. The protection provided by Rule 38 allows a third party, acting in good faith, who began to do certain acts which would constitute infringement of the patent or application, had it been in force, or made serious preparations to do such acts, to continue to do such acts after restoration, provided such acts were commenced before the publication of notice that the proprietor or applicant was seeking to restore the patent or application.

The protection afforded does not allow a third party a right to grant a licence to any other person but does allow the person to authorise business partners to do the act. The right to do the act can also be assigned or transmitted on death, or dissolution in the case of a company, to any person who acquires that part of the business in the course of which the act was done or preparations had been made to do it. Where the product is disposed by the third party to another, that other person and any person claiming through that other person can deal with it as if it had been disposed of by the proprietor of the patent.

The protection for the intervening rights of third parties acting in good faith arises in a number of other sections of the Patents Act, namely, sections 119, 120 and 121, where there are provisions in section 119(5) and 120(5) to provide protection for such persons in cases where a European patent designating the State is revoked and subsequently restored, or the applicant for a European patent re-establishes his rights after his application had been refused or deemed withdrawn.

Section 121(4) provides protection for third parties acting in good faith who begin to do an act while relying on an inaccurate translation of a European patent. If the translation is subsequently corrected, that person can continue to act even if it constitutes infringement under the corrected translation. The formula of words used to provide the protection in each case is "as if an order had been made under section 37(7)".

Section 9, reinstatement of application, section 27, effect of restoring a withdrawn application, and section 30, restoration where a translation is not filed under section 119(6) of the principal Act of the Bill as considered in committee, also contain provisions for third-party protection following the reinstatement or restoration of applications or a patent in the circumstances set out in the respective sections. Again, the protection is conferred by a cross-reference to "as if an order had been made under section 37(7)".

Hence, it will be necessary to amend each of these sections to set out the protection currently contained in rule 38 of the patent rules. This is the purpose of amendments Nos. 7, 8, 12 and 16 to 20, inclusive. For reasons of transparency, the Parliamentary Counsel has set out the protection in full in each section affected apart from amendment No. 18, which relates to section 119, where a cross-reference to section 37 (8) (c) to (11) was possible.

Amendment No. 19 also makes a minor amendment to section 120(5) to clarify that the protection for third parties applies where the act of the third party would constitute an infringement of the rights conferred by publication of the application, since it is the publication of an application which confers provisional protection on an applicant to prevent others from using his invention.

Amendments Nos. 9 and 11 are textual amendments consequent on amendments Nos. 8 and 12. The effect of amendment No. 10 is to delete subsection (7)(b) of section 37 of the Act. The text was amended in section 10 of the Bill as considered on Committee Stage but not with regard to the power to prescribe protection. The protection for third parties where a patent has been restored is now set out in subsections (8)(c) to (11) of section 37 inserted by amendment No. 12. The text that is now set out as section 37(7) in amendment No. 10 comprises the existing text of section 37(7) of the 1992 Act without the text in subsection (7)(b).

With regard to amendment No. 16, which replaces section 27 of the Bill as considered on Committee Stage, it has proved necessary for the Parliamentary Counsel to include it in the redrafting process to facilitate the addition of new subsections (2) to (5), which provide the third party protection. The section which was considered on Committee Stage is now included as subsection (1) and is unchanged apart from the deletion of "the person shall have the same protection as if an order had been made under Section 37(7)" in paragraph (iii) and its replacement by a reference to "the person shall have the rights conferred by the new subsection (2)".

With regard to amendment No. 25, it is necessary to insert changed commencement provisions consequential on changes relating to those sections affected by the new third-party protection provisions. It effectively includes rule 38.

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