Select Committee on Defence Minutes of Evidence



Examination of witnesses (Questions 160 - 179)

WEDNESDAY 28 FEBRUARY 2001

BARONESS SYMONS OF VERNHAM DEAN, SIR JOHN CHISHOLM, MR BILL CLIFFORD and MR TERENCE JAGGER

Mr Cohen

  160. That is where the big money is.
  (Sir John Chisholm)—are essentially things like patents.

  161. Yes.
  (Sir John Chisholm) Okay. Now we have got some 4,000 patents and they are all in the public domain, or at least nearly all of them are in the public domain. Certainly, if it would be useful, a list could be provided.
  (Baroness Symons of Vernham Dean) What I think we can do is to try to give—how can I put it—an indication of how it has been done, the sort of criteria applied. It is the process that you are concerned about, not the actual individual bits.

Mr Brazier

  162. Absolutely.
  (Baroness Symons of Vernham Dean) Perhaps if we can do that that will help.

  Mr Cohen: I will settle for that.

Chairman

  163. It seems the acronym should be GRASP not RASP.
  (Baroness Symons of Vernham Dean) You are good at these, are you not, Chairman?

  Chairman: GRASP as much away from Sir John as you possibly can.

Mr Brazier

  164. I have to say, the IPR thing will be very, very pivotal to outside industry seeing the process it is in being fair minded.
  (Baroness Symons of Vernham Dean) I am happy to try to expose more of the process that has been gone through but I am extremely reluctant to send you loads of bumph.

  165. Could I just move on to the American angle on this. Have the American authorities expressed their satisfaction with the allocation of IPR between the two organisations? Have they taken an interest in it? I imagine they have.
  (Baroness Symons of Vernham Dean) The Americans have taken a very close interest in all this and we discussed this the last time I appeared before the Committee. This has been discussed at what I might describe as "political level", my level, right the way into the roots of the organisation. Terence has done a great deal of it. I have been to the United States to see our friends in the Pentagon and elsewhere who have had very great concerns about what has happened, legitimately and quite rightly and properly. They have been to this country and we have been through it with them on a number of occasions. The previous administration issued a very helpful statement on this when Mr Rudi De Leon was the Deputy Secretary. With the current administration we have not had the chance of discussing it at a political level simply because people have not yet been appointed to the jobs concerned.

  166. You have answered the last of my three questions. Let me come to the middle one. If I understand you correctly, you are saying they have been very heavily involved in the IPR aspect.
  (Baroness Symons of Vernham Dean) I think Terence can give you further details because he has dealt with that.

  (Mr Jagger) Yes. To broaden it, both on IT separation and intellectual property, the US Government nominated independent officials of their own, one of them based in London. They liaised with us very closely. They have been down to Farnborough and had presentations from the team doing separation more than once. They have an open invitation to have updates on that process and they will, like industry I should add, have sight of the report of the independent auditors of the process. Those auditors are skilled in this particular area. They have expressed to me considerable satisfaction with both our willingness to involve them and with what they have seen so far. 167. Lastly, a more general question on the US involvement. I am still puzzled as to how we get over the fundamental hurdle that American Government owned organisations are not, as I understand it, allowed to—perhaps I misunderstand it—collaborate on an unequal basis with outside contractors which New DERA will be. This tremendously valuable, fruitful relationship that we have across the Atlantic with DARPA, I am simply puzzled as to how it can continue?
  (Baroness Symons of Vernham Dean) The Americans have give us, I hope you have a copy of the statement that we had from Mr De Leon saying that they were happy that it was business as usual. "Welcome the proposal. Believe it is constructive and workable. There are detailed issues to be resolved but I am confident they can be addressed satisfactorily". This is dated July last year and a lot of that detailed work has gone on since then. "Look forward to working closely with the UK and maintaining our strong collaborative research links". We have had no hint from them, for all the fears that were expressed by others about a whole range of collaborative issues, including the most sensitive ones in relation to defence, where there would be any diminution of the collaborative effort between us.

  168. The problem for us as a Committee—and I will pass on because we are running out of time—and the problem we all face is we have sat in rooms in the Pentagon and heard people at working level, very senior parts of the working level, and in one case at political level too, expressing—admittedly when we were looking at the old arrangement but nonetheless expressing in very general terms—the most severe concerns, in one case in really extraordinarily strong language.
  (Baroness Symons of Vernham Dean) Yes, but, Mr Brazier, that is one of the reasons why we did not progress. As I said, in Mr De Leon's statement he says "We did have some concerns about the previous proposals".

  169. Some concerns, they were completely up in arms.
  (Baroness Symons of Vernham Dean) Those are the words he uses, and those were the previous proposals. I think it is a little unfortunate to visit the problems of the previous proposals on the current proposals because he is saying very clearly in the statement that he is happy with the current proposals. There are still things to work out, as I said, we have been doing that. Mr Jagger has been able to tell you that this has happened at a very detailed level. We have had people looking at the presentation of how it is done in Farnborough and they have had very considerable access to the way in which the detail has been worked out and have expressed themselves confident.

Chairman

  170. Will they treat Sir John's bit of the carve up differently from what is retained?
  (Baroness Symons of Vernham Dean) Yes. Of course, as I said in my initial reiteration of what was being held back in Retained DERA, DSTL as we must now remember to call it, part of that was because of the international collaboration. Yes, indeed, one of the points that was raised with me when I first came into this particular job and the original proposals were still on the table was that the Government to Government relationship was what absolutely had to be safeguarded. That is what has been safeguarded and, of course, there will be a different relationship with DSTL to New DERA.

  171. Have you any idea when the new appointments, the Dr Etter replacement or anybody above her level, are going to be in situ to give their approval as to whether they agree with the assessment finally given by the last administration?
  (Baroness Symons of Vernham Dean) I do not know. Those appointments are all coming through, as I am sure you know, Chairman. They do sometimes take quite a long time.

  172. Months.
  (Baroness Symons of Vernham Dean) They do take quite a long time.

  173. Things will proceed and then at some stage they will say afterwards they agree.
  (Baroness Symons of Vernham Dean) We have no reason to believe that there are any problems about this. I was in Washington myself at the time of the inauguration. I saw members of the transition team just before the inauguration. Nobody raised any problems with me about it and I am sure if they did have problems that they would move very, very quickly to tell us about them. Terence, we have not had anything other than business as usual in progressing the project?
  (Mr Jagger) No, that is right. We have had continuing official contact with the continuity team and we have been progressing all discussions about the TTCP arrangements, for example, individual projects, and they have gone pretty well.

Mr Brazier

  174. Just one last thing on that. On the Government to Government side, obviously we heard what you say, although I have to say I find it astonishing, even with the change of scheme, how far the view seems to have moved. There is one other angle on it which is that the Government in America, of course, is much more hemmed in by the courts than you are over here. There is nothing in principle to stop contractors in America who feel the relationship between a particular scientific element of the American scientific establishment and New DERA is disadvantaging them from taking their problems straight to court. A lot of the law in this area is actually backed by criminal sanctions not just civil ones, just to make that point. I remember wading through the Hart Scott Rodino[1] amendment and all the rest of the anti-trust stuff, there are very significant legal problems behind the American Government's stand.
  (Mr Jagger) The Government to Government relationship will be 100% with DSTL. DSTL, and indeed people like the Defence Procurement Agency, if they wish, contract out work to other people in support of those arrangements, new DERA among them. That is something which is not only widespread in the United States, it happens to a much greater degree in the United States than it does here. There should be no difficulty.

  175. Forgive me, we have actually then got slightly further into the onion then because what you are effectively saying is there cannot then be the kind of direct relationship between DARPA and teams in Sir John's New DERA that there used to be. There cannot be that direct relationship any longer, it all has to be indirect. Sir John is nodding, that is the basis of what you have just said.
  (Mr Jagger) DARPA lets contracts on a wide range of organisations and if it wishes to let a contract on New DERA in the future it will be able to. The Government to Government relationship will all be through DSTL.
  (Baroness Symons of Vernham Dean) That has been part of the whole point of modifying the plans that we had. There were a wide range of different views about them. Part of it was in order to safeguard Government to Government, not solely with the United States, there are other Government to Government relationships as well which are enormously important to safeguard.

Chairman

  176. The other countries in this special intelligence loop—Australia, New Zealand—they are reasonably happy as well?
  (Baroness Symons of Vernham Dean) I have discussed it with my colleagues in Australia. I was in Australia only a couple of weeks ago, there were no outstanding problems that they raised with me then.

Mr Cann

  177. Just a couple of simple ones, I think.
  (Baroness Symons of Vernham Dean) Unlikely.

  178. The New DERA will not be involved in manufacturing but the MoD says "systems integrator". How do you separate manufacturing from being a system integrator when most manufacturing nowadays is systems integration?
  (Sir John Chisholm) I do agree that manufacturing is one of these things that is getting to be you know it when you see it. New DERA will not, it will be a rather foolish thing to enter into, it will not be making aeroplanes or ships or tanks or anything that looks anything like that. What we have in New DERA is a very considerable systems engineering capability. I distinguish between systems engineering and systems integration.

  179. I am a layman and I do not understand that.
  (Sir John Chisholm) Well, systems engineering is an intellectual activity to do with providing advice and understanding how systems work as a totality and helping those who are involved in the building of systems to help them understand how the totality of what needs to be assembled can best be done. That is something which we are very skilled at, we have lots of people who are very skilled at doing that and we will continue to do that, principally for the Ministry of Defence. That is an activity which we will continue to be involved in.


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