Lords consideration of the Intellectual Property (Amendment etc.) (EU Exit) Regulations 2020 - Sep 14

Moved by

Lord Callanan

That the Grand Committee do consider the Intellectual Property (Amendment etc.) (EU Exit) Regulations 2020.

The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)

My Lords, this instrument, which was laid before the House on 13 July 2020, seeks to ensure that the UK’s intellectual property system functions effectively at the end of the transition period. Intellectual property plays a vital role in the UK economy. IP supports creativity, ingenuity and innovation and provides incentives for research and development. It is no surprise that the UK is a global leader in innovation.

Earlier this month, the World Intellectual Property Organization placed us as the fourth most innovative country in the world. UK research and development is at the forefront of the efforts to combat coronavirus, as seen by the progress made by the Oxford Vaccine Group and AstraZeneca, but that does not mean we should rest on our laurels. The instrument before us today ensures that we have a firm footing to look forward and take advantage of the opportunities available to us as a sovereign, independent nation to bolster our strength as a science superpower.

Last year, as noble Lords may recall, a number of statutory instruments on intellectual property were brought before the House. I shall refer to these instruments as the “original legislation”. These instruments ensured that retained EU law on IP operated correctly and that IP protection in the UK would be safeguarded if the UK left the EU without an agreement. However, as we know, that situation did not occur. The UK left the EU on 31 January, and the transition period provided by the withdrawal agreement means that EU law continues to apply in the UK until 31 December this year. Hence EU-wide IP rights have continued to apply automatically in the UK during this period.

The agreement obliges the UK to ensure the preservation of intellectual property rights which have effect in this country by virtue of our membership of the EU. Of course, this is a task which the original legislation had already taken up. We were always going to ensure that valuable IP rights were not lost, but we must now ensure that we do so in the context of the withdrawal agreement and the transition period.

The instrument before the Committee today therefore has three objectives. First, it will update the original legislation so that it reflects the application of EU law until the end of the transition period, fixing some small errors identified during the process of updating it. Secondly, it will ensure that any new EU law which has come into force since that original legislation works as retained domestic law. Thirdly, it will implement any obligations on the UK in the withdrawal agreement, where these differ from our approach in the original legislation.

The instrument is designed to amend the original legislation before it would come into force at the end of the transition period, which I acknowledge may make the drafting somewhat complex. Nevertheless, the aim remains the same: to ensure that the intellectual property system continues to function and that the valuable rights it provides remain in place. I shall focus on two of the more detailed areas in the instrument: the granting of equivalent UK rights in respect of EU trademarks and designs and new EU law on supplementary protection certificates.

In relation to trademarks and designs, the original legislation ensured that an equivalent UK right would be created for any EU trademark or design in force on exit day. This instrument moves the creation date of the new rights to the end of the transition period because, as I mentioned earlier, EU IP rights continue to apply in the UK until that date. This means that as many as 200,000 additional rights granted between exit day and the end of the transition period will be safely protected in the UK.

In addition, where legal action is being taken to challenge an EU right and a decision is still pending at the end of the transition period, the withdrawal agreement requires us to apply the outcome to the equivalent UK right once the decision has been made. The instrument sets out the process for dealing with the outcome of any such decision. It means that third parties will not be put to the expense of having to launch a separate action to challenge the equivalent UK right.

Turning to supplementary protection certificates, or SPCs, these provide an additional period of protection for patented medicines and pesticides, which must be approved for use before they can be placed on the market. These are highly valuable rights for the life sciences sector, which has consistently been the largest investor in research and development in the UK, investing more than £4.5 billion in 2018. The SPC system works as a balance between supporting innovation in new drugs and ensuring that those drugs become available cheaply, through generic competition, in good time. This enables the NHS to benefit from both.

The SPC system derives from EU law. The original legislation ensured that the system would function in the same way before and after exit day, preserving the pre-existing balance and avoiding changes which might affect when drugs enter the UK market. Last year, some adjustments were made to EU SPC law. Regulation (EU) 2019/933 created what is known as the “manufacturing waiver”. This allows third parties to make SPC-protected medicines in certain specific circumstances while the SPC is in force, without requiring the permission of the SPC holder. This instrument therefore accounts for this new law and ensures that it functions properly in a UK context. It keeps the circumstances in which the waiver can be used the same. This was the clear view of the stakeholders we consulted in a public call for views last year. Again, this preserves the current careful balance of interests in the existing SPC system.

There are also a small number of provisions in this instrument relating to copyright, database rights and the principle of exhaustion of rights. Changes in these areas are technical updates to the original legislation to reflect the existence of the transition period.

In conclusion, these regulations finalise the work carried out last year, providing certainty for holders of IP rights and users of the IP system at the end of the transition period. I commend these regulations to the Committee, and I beg to move.

6.24 pm

Lord Berkeley of Knighton (CB) [V]

My Lords, I recognise that this is largely a technical instrument but it has considerable ramifications for the creative industries, so I hope the Minister will be indulgent about my ability to comprehend the finer details as I declare my interest as a composer rather than as a lawyer.

If I have understood it correctly, the central issue here is whether UK IP lawyers can represent rights holders before the IPO. I believe there is some contradiction between the EU and the British Government on this matter, with the EU saying that they cannot and our Government saying that they can. Perhaps the Minister will be kind enough to clarify that. Secondly, if there is no deal, that would see the UK’s IP legal community face greater competition than their counterparts, potentially weakening them. This clearly impacts on, or might impact on, the main issue for trademark holders, composers, writers, designers and others in the creative industries in relation to leaving the EU—their copyrights and ensuring that the high level of protection in directives is upheld.

Copyright, as the Minister said, is vital to maintaining the success of the creative industries in this country and, indeed, what they garner for the Exchequer. On a broader canvas, there is some good news. The Mechanical Copyright Protection Society—MCPS—is actively pursuing licensing in China. Last Friday’s Japanese trade deal with the UK has been heralded as going further in terms of copyright protection than the EU relationship, so I would be interested to know in exactly what way. Similarly, the Government have said that they no longer plan to implement the copyright directive agreed in the EU last year in the light of Brexit. How do they plan to ensure that services such as YouTube pay the fairer share to music creators which would otherwise have been afforded by the directive?

In 2015, the UK music industry won a landmark case against the UK Government, given their failure to award compensation for the use of music without permission on the grounds that it violated EU law. How can the UK music industry be certain that departure from the EU will not mean that copyright standards and protections will not be weakened if the standing of their legal representatives is undermined? Spotify and YouTube are welcome in many ways, but they discourage the sale of hard music. Why would you buy a £15 CD if you can access a pirated copy on the internet? If the Committee will forgive me giving a personal example, a couple of years ago I had a new piece at the Proms and to my astonishment it was available on YouTube within hours. It was certainly flattering, but very worrying because why would anyone want to record it commercially given its availability in the EU and around the world?

Our IP lawyers need strength to their elbows, not weakening of their grip. These are crucial issues for creators, so I look forward to some reassurance from the Minister.

6.28 pm

Lord Naseby (Con)

My Lords, I thank the Minister for presenting a very complicated area very well. By way of background, I think it is only right to mention that I used be an adviser to two pharmaceutical companies, Upjohn, a US company, and Reckitt and Coleman Pharmaceuticals. I was also involved with Fisons. I was a director of a major advertising agency and most of my clients would have been covered by this area, which is, as the Minister said, vital to UK industry and commerce, so the document we have in front of us is very important.

I shall go through the Explanatory Memorandum paragraph by paragraph if I may. There are a number of questions. I do not expect the Minister to have the answers immediately to hand, but I would be grateful, if he feels it appropriate, if he will drop me a line afterwards. Paragraph 2.4 states

“which have been protected at an international level.”

Does that refer to the world intellectual property organisation? If not, who is it?

Later the paragraph refers to

“new database rights to UK nationals”.

I am always a little concerned about our overseas territories—I declare an interest here in that I have family working in the Cayman Islands, which are part of the overseas territories; they are UK nationals and have a very close relationship with the UK. Does this SI affect our overseas territories? Are they covered by it or is that for later?

Under the heading “What will it now do?”, paragraph 2.9 says

“certain decisions taken by EU bodies or courts on the validity of such rights are recognised in the UK.”

I am not entirely clear whether there is a time limit on that.

Paragraph 3.1 says

“This instrument corrects several drafting errors”.

Well done to the people who found them. Have any more been found since the SI was printed? It would not be unusual if there had been.

Paragraph 7.5 says:

“As far as possible, the approach remains to ensure that the law which currently applies in the UK will continue”.

Does the department have any particular worries about that statement? If it does, they should be brought forward and perhaps we should take action to try to remove them.

I confess, having read paragraphs 7.8 and 7.9 several times now, that I—as someone who is reasonably good at reading and understanding legislation—find them a little confusing. When it is transposed into directions for interested parties, could someone have a go at an Explanatory Memorandum that is slightly less confusing?

To paragraph 7.14, I say hooray and well done. It says:

“This also provides legal certainty”,

and that is vital.

Are paragraphs 7.18, 7.19 and 7.20 saying that these continue without having to apply through the World Intellectual Property Organization? If not, I need some explanation why.

On paragraph 7.21, I am so pleased about the work done on design courts and unregistered designs. It is very important to the creative industry.

Paragraph 7.22 says:

“There is an exception where the grounds for revocation/invalidity would not apply if considered under UK law.”

That needs clarification; I can see some of the major companies asking themselves what exactly is being talked about there.

Paragraph 7.25 says,

“for up to five years”.

Was any consideration given by the UK Government to whether that should be lengthened? The Minister said at the beginning that we are essentially an innovative country. We are on the frontiers of all these technologies, and here we are, going on our own beyond the EU. It seems to me that maybe we will miss a trick if we stick to five years. We want to encourage more and more UK research, as the Minister said in his opening statement.

Paragraph 7.30 talks about UK export wording. This paragraph is very important. Have the chambers of commerce all been informed? They are probably, alongside the specialist groups such as the ABPI and the chemical industries, et cetera, the people who will be getting questions from relevant companies. I just hope somebody has briefed them. Consultation is talked about under paragraph 10; the ABPI and agrochemical companies are important, and I am sure there are others.

I turn to paragraph 10.3. Do I understand that this is all ready to go in terms of the forms that will be required and so on or are we still waiting on that? One of the criticisms that has been made by a number of trade associations is that while they understand the principle of what is happening when we leave on 1 January, they have yet to see any of the forms associated with it, so how can they prepare for it? I note under paragraph 10.4 that in reality they had only 22 days in which to respond, and that was during a holiday period, so one wonders whether that was enough time. Paragraph 10.5 states:

“Responses generally approved of the drafting of the legislation.”

The question arises: what did they not approve of and is that important to British industry? Finally, under monitoring and review, basically in my judgment: when will this be done and how regularly will it happen?

6.36 pm

Lord Clement-Jones (LD) [V]

My Lords, I, too, thank the Minister for his introduction and I am grateful to the noble Lord, Lord Naseby, for raising points on the Explanatory Memorandum because it means that I will not have to go through it in the rather useful way that he has done.

In preparation for this debate, it was rather dispiriting to look back on the long debates we had in January, February and March last year, sometimes in both Grand Committee and the Chamber, on the original five intellectual property EU exit statutory instruments that are subject to amendment by this single draft SI. Much of the debate then centred on the lack of adequate consultation and impact assessments, the latter of which we still do not have. In the meantime, we have the provisions of Articles 54 to 61 of the withdrawal agreement and the consequent note of 29 January from the IPO on intellectual property and the transition period. It is admirably clear about what provisions are being put into place and is very helpful in understanding the outcome of this amending SI, but sadly it is not as clear about what is not being put in place and we are giving up.

As regards the creation of an equivalent EU trademark at the end of the transition period, the note makes it clear that businesses, organisations or individuals that have applications for an EU trademark which are ongoing at the end of the transition period will have a period of nine months from the end of the transition period to apply in the UK for the same protection. The position is similar for registered Community designs and unregistered designs. So far, so straightforward, but on international registrations designating the EU, the IPO note states:

“During the transition period, international registrations for trademarks and designs protected via the Madrid and Hague systems which designate the EU will continue to extend to the UK … We are continuing to work with the World Intellectual Property Organization (WIPO) on the mechanism to ensure continued protection.”

Can the Minister give some further detail of the progress of this work? As regards rights of representation, the IPO goes on to say:

“During the transition period, UK legal representatives will continue to have the right to represent clients before the EU Intellectual Property Office (EUIPO).”

However, it goes on to say,

“The WA also states that the UK will not amend address for service rules for the comparable UK rights for a period of three years after the end of the transition period.”

This is what has given rise to huge concern among IP professionals. It is totally asymmetrical. What induced the Government to give this away? This is the loosest and most damaging of loose ends and, as I am sure the Minister is aware, trademark-intensive industries contribute £650 billion to the UK’s gross domestic product every year, providing an estimated one in five of all jobs. This will give EEA trademark attorneys a significant advantage over their UK colleagues and is likely seriously to damage the UK trademark protection industry, which is a world leader, and will be highly detrimental to UK firms and the jobs they support.

UK professional firms will be, by and large, restricted to UK-only matters with no mutual rights in Europe. While larger firms may choose to deploy satellite offices in the EEA to carry out EU work in the future, not all UK firms can afford such arrangements. UK trademark professionals will lose rights of representation before the EUIPO. There will, in consequence, be a loss of representation on IP portfolios and incoming IP work from a number of major countries and a major risk to professional livelihoods. EEA firms are being handed a completely unfair and anti-competitive advantage. The UK is not “taking back control” of its hugely valuable IP system—it is handing it over to European firms for nothing.

After significant pressure, the IPO woke up to the issue earlier this year. I was told by the noble Lord, Lord Callanan in June—in answer to a Written Questions tabled in May—that officials at the IPO were having ongoing conversations with representative bodies over how best to address this matter once the transition period ends. The Government finally got round to publishing the consultation on changing the address for service rule on 27 July. The outcome of the consultation is not yet public.

Can the Minister give an advance idea of what the conclusion will be? As the address for service provision is incorporated in the withdrawal agreement, what flexibility do the Government have? What action can be taken? Does the weakness in the UK Government’s approach to negotiations mean that there is no level playing field in prospect for three years? Is there a constructive way of resolving the matter that does not depend on breaching the agreement, as seems to be the Government’s favourite method of proceeding in other respects?

As regards patents, the IPO note goes on to talk about the European patent system, which is unaffected by Brexit. What impact will the withdrawal from the unified patent court agreement without consultation or debate in July have on the UK’s innovators and protection of intellectual property after the transition period? The Minister may have read the important warnings from the noble Earl, Lord Devon, on this subject in the Second Reading debate on the Medicines and Medical Devices Bill. What is the rationale for the withdrawal and how will it improve our intellectual property protection in the UK post Brexit? Of course, I welcome the extension of SPC system provided in the SI and described by the Minister.

Then we come to the area of the exhaustion of rights As the IPO note states in the withdrawal agreement, the EU and UK have agreed that IP rights exhausted in the EU and the UK before the end of the transition period will remain exhausted in both areas. However, what happens after the transition date as regards the legal exhaustion regime. The note provides a link only to brief guidance on parallel imports. Is the regime to be adopted still under consideration? I hope the Minister can give more detail.

On copyright, the note says:

“Continued reciprocal protection for copyright works between the UK and the EU is assured by the international treaties on copyright. This is independent of our relationship with the EU so is not addressed in the Withdrawal Agreement.”

It fails to mention the very valuable intellectual property rights—some of which were referred to by the noble Lord, Lord Berkeley—which are being foregone by the UK’s refusal to adopt the new copyright in the single market directive. There is no agreement on portability for consumers, no enhanced duties for digital platforms in use of copyright material, no improved rights for authors and performers and no enhanced rights for publishers. I entirely agree with the noble Lord, Lord Berkeley, as to the consequences. On top of that, the EU orphan works directive will no longer apply to libraries, archives and museums and the position of our collecting societies is weakened. Broadcasting from the UK will also be more difficult. What happened to the Minister’s boast to me on 2 March that the UK has

“one of the strongest copyright protection frameworks in the world,”?—[Official Report, 2/3/20; col. 389.]

Finally, there is a very large elephant in the room. There is currently no deal with the EU. Will we need to come back and amend these regulations yet again for the situation post transition? I hope the Minister is crystal clear in responding on that aspect in particular.

6.44 pm

Lord Stevenson of Balmacara (Lab) [V]

My Lords, it has been a good, if brief, debate and has raised lots of important issues that I am sure we will be addressing over the months to come as matters progress. Like the noble Lord, Lord Clement-Jones, I am grateful to the other speakers for raising issues that, perhaps, we do not need to go back into, given that we are looking forward to the Minister’s responses to the broader points made by the noble Lord, Lord Berkeley. How welcome it is to have a creative presence in our discussions—not that we are not creative, but I mean creative with a capital C. I am also grateful for the comments on the detailed Explanatory Memorandum notes because we do not need to go through them in detail. I think the answers will be relevant to the questions I would have asked as well.

Like the noble Lord, Lord Clement-Jones, I recall the earlier debates surrounding the initial SIs on these matters. I do not want to go into too much detail on this point but I am still left with the view, which I think he referred to, that we seem to be offering quite a lot to European colleagues and former partners, both as regards the rights that they would enjoy up to and including the transition period and potentially beyond, but also in subsequent legal actions and representation issues. The asymmetry was not accidental but deliberate, and my challenge then, which I do not think I got a full response to, was that this whole approach being taken by the department seemed in some senses based on a misunderstanding. That is, if an attractive offer was made to the EU member states on all the intellectual property issues that we have been discussing this evening, we would land a better agreement after the transition period; in other words, the withdrawal agreement would be transmitted into a chapter within the free trade agreement which would be broadly as generous to us as it was to our European colleagues. That does not look quite so easy now. Certainly—plenty of discussions are going on in another place this evening—we may well not be in the same position later this week as we are today. That said, I still wonder whether the Minister could take on this issue and explain why he thinks that this set of arrangements, which in a sense are not touched by this SI because they merely reinforce what was done earlier in the year, are not really out of scope with where I think he wants to be, which is making sure that the British intellectual property industry is standing on its own two feet, able to defend its rights and its practices anywhere in the world, and to obtain the benefits from that.

I have now ranted a little about the broad arrangements, but as regards the particularities of this that we would like answers to, the points made by the noble Lord, Lord Berkeley, are important. Is there an issue here about how representation in Europe will be managed in the future that will affect adversely our creatives? If there is any concern about that, the Minister should make that clear, and if not, he should be equally clear about that.

The noble Lord, Lord Clement-Jones, made a point about consultation and the lack of an impact assessment. Again, we see very limited consultation and no detailed work on the financial implications of the decisions. It may not matter on the narrow issue relating to this SI, but I hope that this is not a precedent for future work. These industries are important to us, they are extremely valuable to our economy, and they deserve to be consulted. If I may make a general point, one of the problems with the Intellectual Property Office is that it has come from a place where it was a passive recipient and documenter of activity in intellectual property, and it has yet to establish itself as the foremost champion of those who work in the creative industries, which is what they need. I would be grateful if the Minister could comment on that.

I would also like more detail on the broader issues touched on by the noble Lord, Lord Clement-Jones, at the end of his peroration. We have been through this in Oral Questions, but I do not think I have had a full and consistent response from the Minister. The copyright directive, which will come into force shortly in Europe and should fit within the withdrawal agreement area, is important for all the reasons that the noble Lord, Lord Clement-Jones, gave us. Consumers would actively benefit from portability, but that has gone. The question about whether the lack of activity in the copyright directive regarding what have previously been protected bodies, such as the major social media companies, which are able to argue that they are not publishers of other work, would have been attacked by the recommendations in the copyright directive on matters such as child protection. Are we not concerned about that, and if we are, how will that be resolved? We never seem to see legislation coming on online harms. Unless that deals with that effectively, we will be missing a huge trick.

The noble Lord, Lord Clement-Jones, also mentioned important issues to do with orphan works. I, too, think it would be a pity if we cannot get some of the value out of that that was in the copyright directive. It may be politically astute for the Government to say that it is nothing to do with this, but I hope the Minister will reassure us that the important issues raised by the copyright directive will not be ignored simply because of political expediency.

6.50 pm

Lord Callanan (Con)

I thank all noble Lords for their valuable contributions to this debate on this important subject. This instrument is vital to ensuring that the IP system is effective and operable from 1 January 2021. Failing to address these issues would put valuable rights at risk and force businesses to go to the expense of litigation to clarify what can and cannot be done.

Innovation and creativity have never been more important or more valuable. This Government have pledged to increase UK investment in R&D, with the goal being to reach 2.4% of GDP by 2027. The fact that we have the world’s most intensive science and technology clusters in Oxford and Cambridge—as determined by the World Intellectual Property Organization—shows the strength of UK science and innovation. Our R&D road map puts science and technology at the forefront of our economic and social recovery. Intellectual property is a crucial part of that effort, so that great research and ideas can be turned into great businesses.

The UK IP system is consistently rated as one of the best in the world, and the UK IPO is widely regarded for its expertise and international influence. To continue to be world-leading, we must be at the forefront of understanding how advances in technology affect the IP framework. Last week at London Tech Week, the IP Minister, Amanda Solloway MP, launched a call for views on the implications of artificial intelligence for the IP system, exploring how the framework may need to evolve with IP being created or infringed by AI.

We must keep leading on international discussions on these issues and more so that the global IP system works effectively for British businesses and those businesses have confidence that they can enforce their rights when they need to do so. International harmonisation is key to ensuring an approach to IP that benefits all nations, and we must continue to deliver high- quality rights granting services here in the UK so that the same confidence and effectiveness apply to our home market.

The noble Lords, Lord Berkeley of Knighton, Lord Clement-Jones and Lord Stevenson, all asked about IP lawyer representation rights. I do not think there is any disagreement between the Government and users about what the law means, but there is an ongoing matter concerning representation rights in the EU for UK IP attorneys and reciprocal rights here. The Government have taken on board the concerns raised by UK attorneys about their loss of rights of representation at the EUIPO and the unfairness they say will result in the UK. The IPO recently finished an online call for views on this issue and unsurprisingly received more than 1,000 responses. We are considering whether to reciprocate by requiring a UK-only correspondence address before the IPO, which would address the concerns noble Lords have raised. The withdrawal agreement does not affect this, other than in relation to the EU rights given equivalence in the UK under that withdrawal agreement.

Turning to the noble Lord’s remarks on copyright, which the noble Lord, Lord Clement-Jones, also asked about, the UK and all EU member states are party to the international treaties on copyright. They give rights holders cross-border protections for all their creative works. This will not change at the end of the transition period. On the future of EU copyright legislation, also raised by the noble Lord, Lord Stevenson, the UK has now left the European Union. The transition period will end on 31 December 2020, as I have said. This means the UK is not required to implement the copyright directive, and the Government have no plans to do so. Any change to UK copyright legislation would come only after detailed consideration and assessment, including consultations with all of the relevant stakeholders.

On the Japanese-UK FTA, the noble Lord also asked about new protections for the UK creative industries. British businesses can now be confident that their brands and innovations will be protected. We have gone beyond the EU on provisions that tackle online infringement of IP rights such as film and music piracy. I cannot comment in more detail until the text is formally laid before the House, but I am grateful for the detailed comments made by my noble friend Lord Naseby on the Explanatory Memorandum.

My noble friend asked about international registrations. This does indeed refer to protections that are applied for through the World Intellectual Property Organization. He asked about decisions taken by EU bodies. Those relate only to decisions that are pending at the end of the transition period, although of course it can take several years for such cases to finally conclude. On the cancellation actions, in most cases the relevance of a decision under UK law will be clear. An example is an EU right that is invalidated because of an earlier national right in an EU member state. Guidance will be produced on what types of grounds may not apply.

I was asked about the duration of supplementary protection certificates. The key to the SPC system is the balance between encouraging innovation in new medicines and ensuring that drugs become available to patients cheaply through generic competition in good time. In that way, the NHS benefits from how long the SPC lasts, which forms part of that balance. How the landscape for medicines develops in the future will determine whether any further changes are needed.

My noble friend asked whether we are ready to go. The IPO is working hard and we are confident that it will be ready to administer the incoming IP rights effectively and correctly. There will be extensive further guidance for users on the updated official forms and other processes over the coming weeks and months. This will include written information, webinars and other materials. As I say, we will publish clear guidance. My noble friend will receive a copy and we will explain how the law is going to change in December and what preparations businesses may need to make. We will update the guidance to reflect the content of this instrument once it has been approved by Parliament. There will be many other outreach activities and we will make sure that any changes to IPO practices are notified in advance.

The noble Lord, Lord Clement-Jones, asked about discussions with the WIPO and protections for international registrations. The Government have worked with the WIPO to see whether we could retain international rights within its system. Through this work we have established that the safest approach for rights holders was to provide them with UK rights, and this is what we have done. He also asked about the Unified Patent Court. In view of the UK’s withdrawal from the European Union, the UK no longer wishes to be a party to the Unified Patent Court system. Participating in a court that applies EU law and is bound by the CJEU would, in our view, be inconsistent with the Government’s aim of becoming an independent, self-governing nation.

The noble Lord also raised the exhaustion of IP rights. This is a complex and indeed contentious area. Under the arrangements we have made, there will be no change to the existing exhaustion of intellectual property rules affecting the import of goods into the UK from EEA countries. However, there may be new restrictions on the parallel export of goods from the UK to the EEA. Businesses undertaking such activities may need to check with the appropriate rights holders to see whether permission is needed. The Government are considering options for a future exhaustion regime and we will consult again with the relevant stakeholders before any decision is made.

The noble Lord, Lord Stevenson of Balmacara, asked about the negotiations on the free trade agreement with the EU. We are seeking an IP chapter that will secure mutual assurances to provide high standards of protection for IP rights which both the UK and the EU already have. I do not recognise his characterisation of the role of the IPO. It is renowned for and will continue to provide high-quality rights, granting services to support businesses in understanding IP and to take an active role in shaping the global IP environment. It remains a world-leading and highly influential IPO that plays its part fully in the UK’s high ranking in the Global Innovation Index.

In conclusion, this instrument will ensure the smooth functioning of the IP system as we exit the transition period. It will provide certainty and security for businesses which can be confident that their valuable rights will continue to be protected here in the UK. I commend the order to the Committee.

Motion agreed.