Intellectual Property Bill [HL]
Baroness Anelay of St Johns
My Lords, this is a procedural Motion that is commonly put and it falls to the Chief Whip to do so. I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Intellectual Property Bill, has consented to place her prerogative, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Clause 13 : Offence of unauthorised copying etc. of design in course of business
Amendment 1
(a) ”
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, on Report we had further detailed debates about the introduction of criminal sanctions for the deliberate copying of a registered design. Noble Lords raised various issues intended to refine and improve the way the sanction operates. The noble Lord, Lord Stevenson, while opposing the principle of the criminal sanction, nevertheless sought to ensure that certain activities clearly fell outside the sanction. He said:
“However, should the proposal be approved, we think that the Bill should also contain a defence for any person who reasonably believed that they were not infringing”.—[Official Report, 23/7/13; col. 1181.]
To that end, both he and the noble Lord, Lord Young of Norwood Green, proposed an amendment on Report which sought to address this issue.
Over the past few weeks, my officials and I have had a number of detailed discussions with stakeholders, including members of the International Chamber of Commerce, the IP Federation and the Chartered Institute of Patent Attorneys about the scope and operation of the proposed criminal sanction. I have listened very carefully to their concerns and to the concerns voiced by Members of this House. I am pleased to bring forward this amendment, which the Government believe goes to the heart of the concerns raised.
As noble Lords will be aware, it has always been the Government’s clear aim that the offence should be directed to blatant and intentional copying of a design that belongs to another. In this regard, the Government remain concerned to ensure that the offence is properly focused on wrongful business behaviour and so minimises any potential chilling effect on businesses which operate legitimately.
It is important that those who have acted diligently and decently, doing their best not to infringe the rights of others, should not have cause to cease innovating lawfully, simply for fear of falling foul of the offence. Consequently this amendment introduces to the existing defence of non-infringement a further defence of reasonable belief that the design in question was not infringed. This defence is dependent on facts within the defendant's own knowledge: his state of mind, the reasons why he held the belief in question and materials he can furnish to support that belief. It will help to ensure that the courts are able to reach a just and fair outcome in such cases.
Lord Stevenson of Balmacara
My Lords, the arguments for and against criminal sanctions for designs have been extensively aired over our discussions on this Bill. Proponents feel that current civil enforcement is expensive for small innovators and that current civil sanctions are not dissuasive to large infringers. Opponents are concerned that unexamined IP rights are a dangerous basis for taking criminal sanctions and that there is a risk of stifling competition in useful products.
We understand the Government’s aim in this Bill. As the Minister said, we were anxious to see if we could move towards a common position. However, we are still concerned about whether it is appropriate and proportionate, whether it would really deter those pirates and counterfeiters whose behaviour the public would consider criminal and whether it may turn out to have a stifling effect on innovation and competition.
One concern, which we have expressed previously, is that the proposed provision could turn into a tool to be used by unscrupulous companies to the detriment of UK designers. It is reasonably inexpensive to register a design, especially as there is no effective examination involved. An unscrupulous company could apply to register designs it copied from a UK designer, then threaten that designer with criminal sanctions for producing his or her own designs. The prospect of defending a criminal action might be enough to make the designer give in. What sort of fairness does that speak to?
As the Minister says, the Government’s intention is that blatant, deliberate copying of designs for commercial gain, safe in the knowledge that many of the victims will be unlikely to have the resources to respond, is an act worthy of punishment, and they believe that the UK needs a coherent approach to the protection of intellectual property rights. On the other hand, the measure is opposed by the IP Federation, the Intellectual Property Bar Association, the City of London Law Society, the Chartered Institute of Patent Attorneys and a number of IP lawyers and specialists. I put it to the Minister that it may not turn out to be a brilliant career move for the IP Minister to cross swords, as he has done, with Sir James Dyson and, indeed, the Ministry of Defence on this point.
As Roger Burt, president of the Chartered Institute of Patent Attorneys, says,
“the Intellectual Property Bill could result in people being charged with criminal offences and locked up for up to 10 years, just for producing a design that looks ‘substantially’ like an existing design”.
We tried to find a compromise position with the Government on this point. We wanted the Government to raise the bar for criminality so that criminal penalties could be considered only in cases, using the words used by the Minister, of “blatant, deliberate copying of designs, for commercial gain”, but we failed. However, we are glad that the Minister listened to one part of our argument, which is that the legislation as drafted might open a Pandora’s box of unintended consequences, potentially discouraging the very kind of legitimate, competitive risk-taking that policy makers have been keen to encourage as a driver of growth.
We therefore welcome the government amendments tabled today, which propose a defence for anyone who reasonably or in good faith believes that their actions were non-infringing. We will continue to oppose the introduction of criminal sanctions for registered design infringement as a matter of principle. However, we are pleased that there will now at least be a defence for any person who reasonably believes that they are not infringing. The objective test of reasonableness should cover situations such as where someone has taken legal advice on the issue, or where an opinion of non-infringement is secured from the IPO opinion service.
They should also extend more broadly to cover competent self-analysis and explanation by a defendant as to why he or she believed that an informed user would perceive the product as creating a different overall impression to the registered design. This is an important amendment and we are happy to support it.
Lord Clement-Jones
My Lords, as the Minister knows, I have always been a supporter Clause 13. I know that many small designers will be delighted to see it contained in the Bill and I hope that it survives its passage through the Commons.
Although I did not feel that the clause needed a huge amount of amendment or that it will be the blunt instrument that some people have predicted, if the addition of the amendment makes it more acceptable, it must be welcomed. I welcome the fine tuning that the Minister has carried out.
In welcoming the amendment, and given the restrictions on speeches at Third Reading, I want to thank the Minister for the accessible and receptive approach that he has taken throughout the Bill. I hope that as the Bill goes through the Commons the further discussions that he has promised on lookalikes—and, in particular, on the comparative advertising issues which may be applicable to lookalikes—and on the kind of penalties that might be appropriate to digital copyright infringement will bear fruit.
Lord Howarth of Newport
My Lords, I echo the noble Lord, Lord Clement-Jones, to the extent that he has welcomed the Minister’s constructive response to some of the issues raised by my noble friends on the Front Bench and myself in Committee and on Report on the matter of the criminal offence. More broadly, perhaps I may I express my appreciation of the Minister’s scrupulousness and fair mindedness in the way he has responded to a range of issues raised by noble Lords throughout the various proceedings on the Bill. I thank him for that.
Viscount Younger of Leckie
My Lords, I am grateful for the contributions to this short debate on the government amendment of the noble Lords, Lord Stevenson and Lord Howarth, and my noble friend Lord Clement-Jones. I should say to the noble Lord, Lord Stevenson, that I have long since realised that as intellectual property Minister I cannot please everyone all of the time. I am certainly aware of the opposition from certain quarters, including CIPA, to the criminal sanction aspect of the Bill.
I would like to take this opportunity to thank, in particular, the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, who have put their names to the amendment, for their collegiate and constructive approach. I also extend my thanks to those Members on all sides of the House who have taken part in the debates on the Bill. I am grateful for the detailed consideration that they have included in this process, both inside and outside the Chamber. The House has engaged in its role of proper scrutiny, improvement and revision and the Bill which is being sent to the other place is greatly improved. I would also like to put on record my thanks to my Bill team and other officials for their expertise and support throughout this process.
The amendment clarifies the scope of the criminal offence further and provides greater security and confidence to the UK’s designers. I commend it to the House.
(b) reasonably believed that the person did not do so”