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Friday, 14 May 1915

Senator DE LARGIE (Western Australia) . - Those of us who have been with Senator Keating members of the Senate for some years are aware that he has made a special study of patents legislation, and from time to time has dealt with the question of patents in a very able manner. "With his legal knowledge of the subject the honorable senator can more easily discuss it than a lay member of the Senate could expect to do. Still, I feel that many of Senator Keating's remarks this morning, while doubtless quite appropriate to the consideration of a Patents Bill introduced in ordinary circumstances, are not as appropriate in the discussion of the Bill now before us. There are international rights and observances in connexion with patents that are not recognised with respect to Tariff, commercial, or other industrial legislation. In dealing with a measure of this kind we have first of all to recog nise that we are at war with a country whose patents have played a most important part in its progress and prosperity. Not only have the patent laws helped to foster the prosperity of Germany, but probably no other legislation has contributed so largely to German advancement. In the circumstances, it is a great mistake to consider a measure of this kind as though we were not at war, and as if the commerce of the various nations were going on in the usual even way. We have to consider the war conditions under which we are living, and which have urged us to bring forward emergency legislation of this kind. I need scarcely say that I am an enthusiastic supporter of this kind of legislation, but I consider that this Bill is far from perfect. When such legislation is introduced it should not be a mere pretence to do something which will end in our doing nothing. I feel compelled to say that the legislation we have passed in this connexion so far has been mere make-believe. I am sorry to have to criticise in this manner Bills which have been introduced by the Government I support, but the truth must be told. The fact that no use has been made of the legislation which we have already passed obliges me to say that if when it becomes law this measure is to be allowed to remain inoperative in the same way, it will not be worth the paper it is printed on. Certain outrages have been committed by Germans, and we are anxious to get level with them.

Senator Gardiner - I am not anxious to come to their level.

Senator DE LARGIE - I do not think that the honorable senator could possibly come down to their level, and I did not suggest anything of the kind. We are all anxious to hit backwhen we have been attacked, without proving ourselves to be as degenerate as the Germans. I hope that we shall be able to do something of that kind under legislation of this sort. We have already given the Government power to take action in regard to enemy patents, and so far nothing has been done. Unless they make up their minds to be a little more in earnest in future than they have shown themselves to be in the past, they might as well shut up shop and pass no more of this emergency legislation. Apart from this view of the matter, we are all anxious to have as much work done in this country as possible. We know that the Free Traders have sunk their principles and hauled down their flag, until to-day it can 'be said that throughout Australia Ave are all Protectionists.

Senator Grant - We are all highrevenue Tariffists.

Senator DE LARGIE - Yes, we put up the duties as high as we can.

Senator Grant - So as to save the land-owners from taxation. We protect the land-owners.

Senator DE LARGIE - I can assure my very ardent land-taxing friend that that is certainly not my object.

Senator Grant - That is the effect of the honorable senator's work.

The DEPUTY PRESIDENT. - Order! At the present time we are discussing a Bill to amend the Patents Act, and it' seems to me that the questions of Free Trade and Protection and land taxation are not relevant to such a Bill, and Imust therefore ask honorable senators not to discuss those subjects.

Senator DE LARGIE - This is a Bill to give protection to Australian manufacturers who may desire to use German patents, and therefore the remarks I have made in connexion with it are entirely relevant to the subject.

The DEPUTY PRESIDENT. - References were being made to land taxation.

Senator DE LARGIE - Senator Grantis so ardent a land taxer, and is so ready on all occasions to bring forward his favorite topic, that perhaps we should deal delicately with him. If we are to do nothing to interfere with patents belonging to the subjects of the countries with which we are at war, our industries will be placed at a very great disadvantage. If there is one patent which more than another has come under consideration during the discussion of this measure, it is that for what is known as the thermit welding process - a process for the welding of steel and iron, which is used to a very great extent in the construction of tramways. We have had, and have at the present time, a considerable amount of tramway construction going on in Australia. The patent to which I refer is the only effective patent in existence, although it represents by no means the only invention connected with the business, and if the thermit welding process is not used, the effect must be to put a stop to a very great deal of work which was going on before the war started. If we concentrate our attention upon this matter we shall better understand the real reason for the introduction of this Bill. We are all anxious to see use made of every German patent in Australia, for the benefit of our own industries. But I am sorry to say that the right to use this thermit welding patent has been safeguarded by the Government in a manner that is scarcely credible. Up to the present time all the protection which the Commonwealth can give to it has been given to it.

Senator Gardiner - To whom?

Senator DE LARGIE - To the German patentees.

Senator Gardiner - I will take the trouble to answer the honorable senator, and I will show that he is quite mistaken. I know that, he means well, but he is mistaken.

Senator DE LARGIE - I thank the Vice-President of the Executive Council for his acknowledgment that I mean well, but I can assure him that I know exactly of what I am speaking. I know well,in addition to meaning well.

Senator Gardiner - I will show the honorable senator that he does not know what he is saying when he declares that the German patentees have been protected. As a matter of fact, the patent has been suspended, and is now the property of the Commonwealth.

Senator DE LARGIE - If the VicePresident of the Executive Council can throw any light upon this matter, I shall be glad. My information is that, from the time the patent was suspended, no use whatever has been made of it in Australia. It is quite true that a certain Government official has been granted a licence to use it; but that officer has no. work upon which it. can be utilized, and; consequently, no use has been made of it. Yet private individuals have been refused alicence to use it.

Senator Gardiner - The officer to whom a licence has been issued represents the Commonwealth.

Senator DE LARGIE - He has made no use of it, and yet applications for a licence by private persons who desired to make use of it have been refused. That is my charge against the Government; and ifthe Vice-President of the Executive Council can answer it, I shall he very pleased. If no more use is to be made of this patent by the Government than has already been made of it, the war will have concluded before it can be utilized to our advantage. Time is a very essential factor in this question, because as soon as the war terminates, this legislation will cease, and the patentees will then be able to take action in our civil Courts. The moment peace is proclaimed this measure will become so much waste paper. Before going further, I would like to directattention to an amendment which has been made in the Bill in the other Chamber. The effect of the adoption of that amendment will be to prolong the delay of which I am complaining. To my mind, it is a very foolish amendment, inasmuch as it will permit of the continuance of that sort of litigation which is now occupying the attention of a civil Court in Adelaide, where the action of a German in trading with the enemy has been challenged. Whilst such legislation may prove profitable to the lawyers, the litigation it provokes is certainly not edifying to the country. I hold that if, under sub-clause 2 of clause 4 of this Bill, the holder of any patent is. empowered to go into Court and defend his patent right, there will be no end to litigation. The result of such legislation may be delay, until it is impossible to take action owing to the termination of the war. If the object of this legislation is defeated, it will be due to the amendment to which I have directed attention more than to anything else. I trust that the Government will see their way to restore the Bill to its original form. I am afraid that the Attorney-General exhibited too much readiness to listen to the critics of the measure in another place, instead of boldly standing by its provisions. Regarding the thermit welding process of which I have spoken, I question if the Government hadauthority to do what they have done. Under the Act which we passed last session, any person was empowered to apply for the suspension of an enemy patent. At least two gentlemen who are well known in the Commonwealth made application for the suspension of the patent relating to the thermit welding process. I refer to Mr. Teesdale Smith and Mr. HenryChinn, both of whom are interested in tramway construction. Mr. Chinn has been working on an invention of his own, with a similar object in view, for quite a considerable time, but, because of some lack of originality, he failed to obtain a patent for it. The raw material for his invention is produced in Australia; whereas the raw material for the thermit welding process has to be imported from Germany. A German named Goldschmidt is the principal in the Thermit Limited, Sydney, and another German is the manager. As a matter of fact, ninetenths of the shares in the company are held by Germans. Strange to say, this patent has been dealt with in Australia in rather a peculiar way. Probably it is within the recollection of honorable senators that when certain charges were made against Mr. Chinn in another place, it was alleged, amongst other things, that he had infringed a particular patent. The patent in question was the German thermit welding process patent. When those charges were investigated by Mr. Justice Hodges, who was appointed a Royal Commission for the purpose by the then Fisher Government, it was found that there was no substance in this particular allegation. Mr. Justice Hodges reported that Mr. Chinn was quite justified in his action, having done nothingwhich he was not entitled to do under the law. It will be seen, therefore, that this thermit welding process has something of a history. After the Act of last year was passed, Mr. Teesdale Smith and Mr. Chinn applied for a voidance of the thermit welding process patent. That patent was suspended ;but, instead of the applicants being granted a licence to use it, a licence was issued to a person who was not an applicant at all - I refer to the Engineer-in-Chief of the Commonwealth railways. Had the Governmentintended to make use of that licence for the public benefit, there might have been some justification for their action in straining the law, as they undoubtedly did.

Senator Gardiner - The Government have not refused private persons the right to use the patent.

Senator DE LARGIE - Would the Vice-President of the Executive Council have private persons incur the risk of using a patent without legal sanction, and after they have been refused a licence? If the Government desired to use the patent themselves, why did they not do so? In Sydney a licence to use a German patent was granted to a private citizen named Tonks. Yet the issue of a similar licence to. Mr. Teesdale Smith and Mr. Henry Chinn was refused. I cannot understand the reason for this differential treatment.

Senator Gardiner - A licence to use this particular patent was not given to Mr. Tonks. Another patent was involved in his case.

Senator DE LARGIE - I know that. The same consideration should have been shown to Mr. Teesdale Smith and to Mr. Chinn as to Mr. Tonks, who was successful in his application for another patent. I know that at the time Mr. Smith and Mr. Chinn applied for the avoidance of the thermit-welding patent they both had works on hand in connexion with which this patent could have been used. Mr. Teesdale Smith had a tramway contract running from Malvern down through Glenhuntly past my door, and consequently he could have used the German patent there, but a licence was refused. I know, also, that Mr. Chinn had several contracts waiting, and it was most unsatisfactory that his application should have been refused. Altogether, he has been harshly dealt with by the Government, for he was thrown out of employment on the transcontinental railway and has had no means of obtaining employment since then. The fact that he was refused a licence for this thermit-welding process does not redound to the credit of the Government or of the Attorney-General, and, in view of the fact that Mr. Tonks was given a licence for a German patent, I cannot understand why Mr. Chinn was refused.

Senator Gardiner - Quite a number of other people have applied for licences. It is not a personal matter.

Senator DE LARGIE - I hope that we will do something in connexion with German patents, and that the Government mean business; but, judging from the remarks of the Attorney-General in another place, I am afraid that this is not the case. We find that Mr. Hughes, when speaking on the second reading of the Bill in another place, seemed to be anxious to safeguard these German patents, for he said -

The right of action for infringement was gone. But it has not gone permanently.

That is to say, if we can interpret the remarks of the Attorney-General correctly, it would be possible to take civil action at the close of the war against any person who used a patent. The AttorneyGeneral added -

It has gone only during the war, or during the period of suspension or avoidance of the patent. After the war, patentees will be able to call to account any person, who, without their permission and without licence from the Crown, has infringed their patent.

I think that the Vice-President of the Executive Council will see that, had Mr. Chinn or any other private person infringed a patent by using it without a licence, he would, under this Bill, have laid himself open to litigation as soon as the war was over. That is not the way to encourage enterprise in any shape or form, because people will think twice before they make use of patents, in view of a probable penalty being inflicted upon them at the close of the war.

Senator Keating - That is not in consequence of any law that we are passing, lt is the established practice amongst the nations.

Senator DE LARGIE - I am sorry w© are not making an effort to preclude the possibility of action in the future for infringement of an enemy patent.

Senator Keating - Would the honorable senator confiscate these patents altogether ?

Senator DE LARGIE - Yes, I would ; and I would make no apology for it at all while we are at war; besides, " a licence " is only another name for " confiscation."

Senator Keating - But not even Germany is doing that.

Senator DE LARGIE - We are not in a position to say what Germany is doing, but we can imagine what is the attitude of that country towards British interests.

Senator Keating - Great Britain has not confiscated a single enemy patent.

Senator DE LARGIE - That is no reason why it should not be done in Australia. I question very much whether the honorable senator can say what Germany has done, or is doing, with regard to British interests.

Senator O'Keefe - Germans appear to have more regard for private property than for human life.

Senator DE LARGIE - Yes, that is the position as disclosed by recent reports. It is a farce to talk about not confiscating German property in the face of all that is happening. I want to refer honorable senators to another statement made by the Attorney-General regarding this Bill-

It thus safeguards, to some extent, the rights of patentees as well as those of licensees. Whatever be determined as to the distribution of royalties collected under the amending Act of 1914, the patentee whose patent has been suspended or avoided is placed by this Bill in a better position to recover after the war whatever he may be entitled to.

This statement shows, then, that by this Bill we are actually placing patentees in a better position than they were in before the war. For instance, if any honorable senator applied for and got a licence to use the thermit process, according to the Attorney-General the German company would at the close of the war have a legitimate ground for action for infringement of the patent, and would be in a better position under this Bill than it would have been formerly.

Senator Senior - What encouragement is there, then, for a licensee to take up a matter of this kind? None whatever.

Senator DE LARGIE - The Bill is simply a make-believe; it is a pretence that we intend to do something when we actually intend to do nothing.

Senator Senior - Worse than nothing.

Senator DE LARGIE - It is evident that nothing will be done under the Bill. The right to use a German patent was given in the Act passed last year. Although the thermit-welding patent was suspended under the Act of 1914, nothing has been done.

Senator Gardiner - I will prove to the honorable senator that he is mistaken in this matter.

Senator DE LARGIE - Well, I will hold my opinion until the Minister disproves it. I say absolutely that nothing has been done in connexion with the thermitwelding patent since it was placed in the hands of the Engineer-in-Chief.

Senator Gardiner - That is a different statement.

Senator DE LARGIE - I am afraid the honorable senator is not as conversant with the matter as I am, or he would not have made that interjection. I repeat that nothing has been done with the patent up to the present.

Senator Gardiner - The patent has been avoided. Is not that something? It was given to a Commonwealth officer in the interests of the Commonwealth.

Senator DE LARGIE - Well, what has he done with it? It has been of no earthly use whatever so far, because it has not been used. I do not blame the Engineer-in-Chief, I blame the AttorneyGeneral for having given the licence to "a person who has no use for it.

Senator Gardiner - It has not been given to any person at all; it has been kept by the Commonwealth.

Senator DE LARGIE - It would have been just as well if the Government had wrapped it up in lavender for all the use it has been to the Commonwealth; and I repeat that this Bill does not mean business.

Senator Senior - It seems totally unnecessary.

Senator DE LARGIE - As a matter of fact, under the Act passed last year a private person might risk using an enemy patent without any penalty in the way of a fine, but, under this Bill, not only will the infringer be responsible to the patentee after the war, but at the present time the Government might come down and fine him £500 for daring to use the process.

Senator Senior - He cannot use it without a licence from the Government.

Senator DE LARGIE - But, under the Act passed last year, there was no penalty provided, so that by this measure we are safeguarding the German patentee to a greater extent than was the case under existing legislation.

Senator Bakhap - Does the honorable senator want enemy patents avoided altogether ?

Senator DE LARGIE - Yes; I want to see a law passed so that persons may use those patents for the benefit of the country without any risk to themselves. Referring again to the applications by Mr. Teesdale Smith and Mr. Chinn to suspend the thermit patent, I might remind the Senate that, after the first or second day of the hearing, Mr. Teesdale Smith withdrew, and Mr. Chinn went on. He fought the case at considerable expense to himself, and, in the end, he was refused the licence. My information concerning this thermit-welding process has been obtained from the best authority, and I am interested to know what the Vice-President of the Executive Council, who is in charge of this Bill, will have to say in answer to my statements. Notwithstanding hissuccessful action against the German patent, Mr. Chinn obtainednot the slightest benefit, because he was refused the licence.

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