§ Mr. Bendall
asked the Secretary of State for Trade and Industry when the Monopolies and Mergers Commission Report on the Ford Motor Company Ltd. is to be published; and if he will make a statement.
§ Mr. Fletcher
The report is published today.
On 11 May 1984, the Director General of Fair Trading referred to the Commission under section 5 of the Competition Act 1980 Ford's policy and practice of not granting to any person (other than to persons supplying body parts to Ford) a licence to manufacture or sell in the United Kingdom any replacement body part where Ford claims to be entitled to prohibit such manufacture or sale by virtue of the copyright subsisting in the drawings or designs of body parts.241W
The commission concluded that Ford's practice was anti-competitive in that it had the effect of preventing competition in the supply in the United Kingdom of replacement body panels or part panels for Ford cars and vans. They also concluded that the practice was clearly adverse to the public interest, because it eliminated competition from independent manufacturers which had had a beneficial effect on prices and on innovation.
The commission considered that the public interest in competition, Ford's interest in obtaining an adequate return on its investment and the public interest in allowing a reward for innovation and investment could all be met if, for body panels, the period of protection under the Registered Designs Act 1949, were to be limited to five years. It recommended also that a corresponding amendment be made to section 10 of the Copyright Act 1956 and that under that Act the period of protection for body panels not registrable under the Registered Designs Act should be reduced to a period not exceeding five years. However, they recognised that a more general reform of the legislation, applying more widely than body panels, could also remedy the adverse effects which they had identified.
The commission recognised that changes of the law would take time. They suggested that in the intervening period the preservation of competition in the supply of replacement body parts for Ford vehicles could depend upon Ford's readiness to respect the public interest as they had defined it, and to modify its position accordingly.
I accept the findings of this report, which is an important contribution to the debate over the relationship between the laws governing intellectual property rights, and those governing competition. The Government are reviewing the law of copyright and industrial design protection in the light of consultations on the Green Paper on "Copyright, Design and Performers Protection" (Cmnd. 8302) and the Green Paper on "Intellectual Property Rights and Innovation" (Cmnd. 9117). We shall take account of the report's recommendations in respect of body panels in our consideration of wider legislative reform.
Meanwhile, in the light of the report's findings, I am asking the Director General of Fair Trading to open discussions with the company with a view to securing appropriate undertakings.