Baroness Buscombe
Baroness Buscombe (Con)
My Lords, I am pleased that we have convened this short debate regarding copyright exceptions. This is an important opportunity to focus upon a few key issues that remain of real concern to the creative industries, notwithstanding many meetings between the IPO, Ministers and stakeholders—I understand in the region of 250 all together—together with impact assessments and the sharing of early drafts of the statutory instruments.
The Government’s aim must be right—to increase the value of copyright while supporting our creators and our freedom of speech. This package of reforms is intended to enable non-commercial, pioneering research, private study and teaching in schools and define the parameters within which we, as consumers, can use what we have paid for. It is not directly concerned with business-to-business licensing; it is, however, about making it easier for businesses to provide new technologies without being held liable for how consumers might use their products. While these reforms do not expressly concern business-to-business licensing, the whole business community is potentially affected.
My focus is on testing whether the legislation will do what is intended, as opposed to allowing unintended consequences to flow from imprecise drafting or a failure to future-proof innovation that could harm rights holders. That is quite a challenge in itself. While there has been extensive debate around exceptions, there remain areas where rights holders continue to question whether applying an exception is the most expedient way forward.
I begin with concerns regarding text and data mining. Given the speed of technological advancement and innovation, some have suggested that the exception route is rendered unsuited to protect rights holders and suggest that, instead, digital market-based solutions to some of the emerging issues around text and data mining would be better addressed through improvements to licensing and technological standards. The Government recognise that copyright needs to meet current and future technological challenges. Is this achievable with the use of exceptions? For example, while an exception may remove a publisher’s exclusive right to prevent copying for the purposes of text and data mining, a researcher’s ability to engage in the activity across different publisher platforms is dependent upon there being an alignment of technological and contractual standards and practices.
Another area of concern is provisions for contract override. I would welcome reassurance from my noble friend the Minister on this point: while the override on one level makes absolute sense, I can see a real conflict where a contract runs the risk of including two contradictory statements of what is and is not acceptable. For example, while the purpose of the contract override is to ensure that contracts would be rendered unenforceable if they restricted or prevented a relevant exception, it is also the Government’s stated policy that publishers should be able to maintain the ability to impose conditions of access prior to the mining of works. In practice, surely this means that the publisher can restrict the scope of an exception, in which case, with the addition of a contract override, the whole contract becomes unenforceable. Clarity and reassurance on this point would be extremely helpful. Perhaps my noble friend the Minister could explain why the proposed contract override provisions have not hitherto been subject to their own separate consultation, discussion or economic impact assessment.
A further complication here relates to European law. I refer in particular to the enforceability of technical protection measures as set out in Article 6 of the copyright directive and Section 296ZA of the Copyright Act. Copyright holders are permitted to restrict or prevent certain acts through the use of technical protection measures if certain criteria are met, in which case how does this work with contract override?
Some definitions require clarity. For example, can my noble friend explain what is the difference between “for the purposes of instruction”, “non-commercial use” and “non-commercial research”? In addition, the term “lawful access” could be interpreted according to how the user might wish to access the content. What is genuinely “non-commercial”? In other words, the exception must not be used as an excuse to avoid obtaining a licence. Will those in academia interpret this in the same way as rights holders who need to earn their living?
Private exceptions further highlight the difficulty of definitions. Private exceptions should be narrowly defined so that third-party aggregators cannot choose to commercially exploit creative content and also to ensure that the ability to license value-added services is not compromised.
From a legal standpoint, I can see that there is a world of difference between stating that a private exception is to be used only in parodying a work, rather than having an exception for any work that is used in the process of a parody. It may seem a subtle distinction but, if it is not made clear, a commercial production company could, for example, use copyright footage for free, purely with the aim of reducing production overheads of TV programmes and with no recompense for the original creator. In essence, parody must be carefully defined so that it cannot be used as an excuse to avoid licensing.
The meaning of the word “pastiche” also needs to be clearly defined. Current definitions, such as that of the OED, which refers to a,
“medley of various ingredients; a hotchpotch, farrago, jumble”,
leave the door wide open to interpretation depending upon one’s perspective and desired use of that intellectual property.
The moral rights of a creator need to be protected. Many will know of the recent case of the Beastie Boys, which is pertinent as advertisers of a toy are using one of their songs, despite the band having a blanket ban on the use of their music in advertisements.
It is critical that we all know what is meant by these terms. I appreciate that it is the task of parliamentary counsel to tackle these very nuanced points, and I urge them, with very great respect, to take on board just how important it is to get this right. Leaving it to the courts to define the scope is somewhat defeatist. I really want to assist my noble friend the Minister in providing certainty and clarity in the first place. In essence, it is the drafting of the proposed exceptions that has to be tight and right.
There are other concerns affecting different parts of the creative industries. For example, will the Government reconsider the education exception, even at this late stage, so that it does not negatively impact the business models of publishers of sheet music, who were previously protected by the requirement that the exception should not cover reprographic copying?
Copyright awareness is key. Consumer and rights holder confusion has to be minimised to ensure that this legislation works in practice. Education is of paramount importance, and I note that the Government are focusing on this now through the IP awareness campaign, launched on 23 October, with multiple activities in the pipeline over the next six months to promote awareness and the importance of respecting copyright. I hope and assume that these activities will not only explain the importance of copyright protections but focus on how they are applied. Therefore, can the Minister expand on plans to develop awareness, including from an international perspective? Consumers, academics and commercial enterprises, be the latter a sole trader or a large established user of content for commercial gain, must know what they can and, more importantly, cannot do with works that they have already paid for.
In addition, IPO enforcement activity, including important reform of the Intellectual Property Enterprise Court to bring about more expedient and cost-efficient access to justice, is a critical component of IPO responsibility. Clearly, the Government have a strong focus on this, although minimising the potential for distortive and harmful practices by third parties is the aim here; litigation as a result of these regulations should remain a very last resort. That brings me to my final point.
It would be very helpful if my noble friend could set out an approximate timetable for the next steps through to the introduction of these regulations next year. There is also the question of bundling the statutory instruments. I understand that that lies within the competence of parliamentary counsel, who have the unenviable task of finalising the drafting. All those potentially affected by this legislation, including the academic community, will need to prepare for its introduction.
In conclusion, the Government agreed with Hargreaves that the copyright system had not kept pace with the digital revolution and, in particular, that the current framework means that a great many intuitively acceptable activities are illegal or uncertain because they involve an element of copying. The process of copying is at the heart of many technologies being used by consumers, teachers, academics and researchers in pursuit of entirely legitimate aims. These exceptions must therefore ensure that, in seeking to legitimise private use, imprecise drafting does not inadvertently or vicariously enable third parties—or indeed the consumers themselves—to commercially exploit and undermine the copyright system. I go back to my first point: this package of reforms is about creating value from copyright works. I very much hope that the Minister will be able to achieve this laudable aim.
Baroness Warwick of Undercliffe (Lab)
My Lords, when we consider our copyright regime, it is important that we do not do so in isolation. We should also consider the reasons why we have a system of copyright in the first place. If a system no longer serves those purposes, it ought to be reformed. So what are the purposes of copyright? I believe there is a general consensus that its aim should be to create a fair balance between those who create material and those who use it in order to allow this material to be used and to incentivise the creation of new material, to the benefit of society as a whole. A system with too little protection can result in a lack of incentives to create and invest in new material. However, there can also be too much protection—or perhaps, more accurately, inappropriate protection—that places barriers in the way of those who want to make reasonable use of copyrighted material and the information it contains.
Where these protections place restrictions on the use of material for the purposes of education and research, upon which the creation of valuable new material in the future relies, we need to be doubly sure that these restrictions are proportionate and fair. Of course, nobody here today needs persuading of the vital role played by education and research in economic growth, although those wanting a refresh could read the transcript of today’s debate that just finished half an hour ago in the main Chamber. Having said that, I will focus my comments on examples where the scope of current copyright exceptions is placing restrictions on education and research, and where I believe that modernisation will both stimulate the creation of valuable future material and benefit the economy.
The copyright exceptions that are currently on the statute books were largely written in the 1980s. Since then, there has been a revolution in the way in which we work, learn, study, research and communicate. In particular, the exceptions relating to education are out of step with how students learn in today’s universities, colleges and schools. For example, there is a helpful-looking exception that means copying works for the purposes of instruction does not infringe copyright. Unfortunately, it also specifies that this cannot be done through any reprographic process—that is, by photocopier or any digital reproduction such as a PowerPoint presentation or an electronic whiteboard. It is a law written for the age of blackboards, still operating in the age of the iPad. It was never the aim or purpose of this part of copyright legislation to prevent the use of modern technology in our schools and universities, but that has been the result.
The Government’s intention to reform this exception is very welcome. They intend to do this by bringing forward a general “fair dealing” exception. This will allow the law to catch up with current practice. Because it is technology-neutral, it also means that the law will be flexible enough to deal with tomorrow’s teaching methods. However, the Government are also maintaining a far more limited exception for reprographic copying for cases that are beyond “fair dealing” of the work. This is fair, but I would be grateful if the Minister could make clear that the exception for instruction that the Government intend to bring forward will not exclude all copying by reprographic means.
Another area where the current copyright laws are out of date as a result of technological advance is that of so-called “text and data mining”. This is a process whereby large volumes of material are automatically read in order that overarching trends can be identified in a highly efficient manner. Assuming the researcher has the necessary licences to access this material, the process is in theory entirely legal. After all, it is not facts about the world that are protected by copyright, but the way in which they are expressed. However, because this method of research involves the automatic creation of a transitory copy of works, specific licences are currently required. This is not the case in other countries such as the USA, where text and data mining is considered fair use of a copyrighted work; so in this country, the current lack of an exception for text and data mining is holding back research. Given the economic importance of the UK’s research sector, it is also holding back economic growth. I should be grateful if the Minister would confirm when he expects an exception for these purposes to be in place.
After my brief contribution, I conclude by saying that we should never allow the protection and enforcement of intellectual property rights to be our only consideration in these debates. If our copyright regime is to benefit our society and our economy, we need to make sure that it does not place unnecessary barriers in the way of education and research. The Government’s plans to reform copyright exceptions are welcome steps towards removing these unnecessary barriers.
Lord Clement-Jones (LD)
My Lords, I welcome this opportunity for the Committee to consider the proposed copyright exceptions before they are introduced, and thank my noble friend Lady Buscombe for securing it. My noble friend the Minister is only too well aware that the creative industries sector is very exercised by the potential negative impact that some aspects of these draft exceptions could have.
As I said last July during the passage of the IP Bill, copyright exceptions should be adopted only in response to both well defined public policy objectives and market failure. In this regard, what advice have the Government received that their proposed exceptions meet the requirements of the Berne convention and the three-step test?
The proposals take no account of developments in licensing both during and after the Hargreaves process. Digital market-based solutions are being found through a combination of improvements to licensing and technology, not least through the copyright hub. My noble friend Lady Buscombe asked about impact assessments. Does the Minister still stand by the statement on page 3 of Modernising Copyright, the Government’s response to the consultation on copyright exceptions published this time last year, that,
“these measures could contribute over £500m to the UK economy over 10 years on a conservative view, with likely additional benefits of around £290m each year”.?
In its recent report on supporting the creative economy, the Culture, Media and Sport Committee was highly sceptical of these impact assessments. It said,
“We are not persuaded that the introduction of new copyright exceptions will bring the benefits claimed and believe that generally the existing law works well”.
Dr George Baker of University College London recently carried out an analysis for the MPA and concluded that,
“the evidence relied upon is being misinterpreted by the Government”.
Have new economic impact assessments been conducted, or the current ones revised, to take account of the many developments in the licensing markets?
The draft data analysis exception is a particular example of this. Most recently, the International Association of Scientific, Technical and Medical Publishers produced a commitment by publishers to enable text and data mining for non-commercial scientific research. Likewise, as regards consumers, a private copying exception should not apply where a commercially available alternative exists. Nowhere is that clearer than in the audiovisual sector. Products such as iTunes and UltraViolet allow legal and secure access to that content through the cloud among six family members for up to 12 personal devices, thereby enabling format-shifting. At the same time, a multitude of new digital audiovisual services has occurred under the existing legal framework.
It could not be clearer that there is no market failure that needs addressing here. The same is true for the quotation exception, where publishers are already addressing the market via large-scale and low-cost licensing technologies. Far from incentivising the market to continue innovating in the interests of the consumer, it may well be that the exceptions proposed will undermine the thriving market for new and innovative digital content services.
As regards business-to-business or institutions, each of the exceptions include a provision that would render unenforceable contracts which seek to restrict or prevent the relevant exception. Another new and untested concept in UK copyright law, this has not received nearly enough examination and consultation. From conversations I have had with industry representatives, it is clear that at no point has any substantial discussion been held. Even though the attendees of various forums were led to believe that separate sessions would be held on this issue, this did not transpire. Given their importance to all the proposed SIs, why have the proposed contract override provisions not been subject to a separate consultation and discussion? Override of contract is not required by the copyright directive. Indeed, Article 9 states that the directive should be without prejudice to the law of contract. It is unclear how the proposed provisions sit alongside these or why it is felt to be necessary. There is also the question, which I hope the Minister will answer, of why wording already in place within Section 50 of the CDPA cannot be used to address the apparent concern.
The IPO has failed to set out a compelling case for why the provisions are required and exactly what problems they solve. Rather than encourage innovation, these provisions will encourage challenge and breach of existing licensing terms put in place for users of copyright works. The Publishers Association makes the important point that British creators will now be put at a significant competitive disadvantage as investors turn away from the UK and invest in content made in other jurisdictions. Has the Minister undertaken any analysis of the impact of this on the UK’s competitive position? The proposed exceptions potentially run into conflict with the ability of rights holders to ensure the enforceability of technical protection measures. It is unclear from the current drafting how this will interact with the proposed provisions on contract override. The most probable outcome is consumer, business and rights holder confusion.
These are all substantial objections. In the ordinary way these fundamental amendments to sections of the CDPA would be dealt with by discussion in a normal parliamentary process, in both Houses, with amendments being debated. Why is such a fundamental change to the application of UK contract and copyright law being made by secondary legislation?
Finally, on the broad objections to the exceptions, it seems that some exceptions may not even comply with EU law. The private copying exception, as currently proposed, would not provide any compensation to rights holders for harm that private copying might inflict on them. How confident are the Government that this will survive legal challenge? Why have the Government chosen to ignore the ruling in the Padawan case, which makes it clear that member states must, when introducing a private copying exception, include a mechanism for calculating compensation, even if the subsequent calculation is that that compensation is zero? How does the private copying exception square with the fact that the software directive excludes private copying from the scope of permissible exceptions?
I have dealt with the very broad objections. There are a host of drafting objections to the individual exceptions that I am unable to cover today but many of them have been dealt with by my noble friend Lady Buscombe. ITV rightly points out that this whole exercise is fraught with the risk of unintended consequences. Have the Government really thought things through properly?
Lord Berkeley of Knighton (CB)
My Lords, I am very grateful to the noble Baroness, Lady Buscombe, for initiating this important and timely debate. Personally, and speaking as a composer, I am always touched and flattered that people want to listen to my music and even to copy it. Sadly, though, I and my colleagues and the people who play, publish and record our music cannot live on flattery. If we were shopkeepers, it would be like allowing the public to come into our shop and help themselves to items without paying. Whenever we point this out, we are told that new methods will be adopted to recompense us. Historically, change has inevitably led to a cut in income. The creative industries are projected to be worth around £36 billion to the UK economy. They have withstood our recent economic problems and are well placed to contribute to UK growth. I regret that this contribution could be threatened by some of the less well thought out proposals to modernise copyright exceptions that we are considering today.
I would like to focus my remarks on two of the proposed exceptions and demonstrate how they could have a detrimental impact on our music industry. The UK music industry is one of only three net exporters of music content in the world. We are world leaders in the number of licensed digital services, providing fans and consumers with many ways to enjoy music. Intellectual property is the framework that underpins success for the music industry and copyright is the currency of that framework. Copyright provides businesses with an incentive to invest in music and allows musicians and composers to derive an income from their creativity.
However, it is a fact that some 78% of the sector earn less than £20,000 a year. It is very hard for young musicians and composers to get a foothold in the industry. Any loss of income from losing the right to be compensated for the copying of one’s work will be incrementally more damaging in today’s environment for musicians and composers and makes such careers less feasible. Research conducted by music industry body UK Music concluded that consumers ascribe between 32% and 53% of the value of an MP3 player to its ability to copy music. Yet music rights holders never see any of this value, as the exception and compensations are not in place here.
The Government justify their intention not to provide compensation under this exception on two grounds. First, they argue that rights holders are pricing in the ability to private copy at the point of sale. That argument is, however, undermined by the Intellectual Property Office’s own research produced to support that policy. In the case of music, the research said:
“We did not find any evidence in support of a widely-held view that stores are including in their price the permission to copy.”
Similarly, the Commons Culture, Media and Sport Committee recently concluded that it does not share the Government’s acceptance that a facility for private copying is factored into the purchase either of music or devices that store, play or copy it.
The second argument the Government put forward is that there will be no harm as the exception is narrow. Will the Government tell us just how narrow this exception is compared with other countries with an exception? Prompted by a question from Kerry McCarthy MP in the other place in October 2013, the Government provided evidence published in 2007 on different exceptions across the world. From this information it appears that only Poland and the Czech Republic have wider exceptions than the Government’s draft. Other countries have exceptions that are just as narrow as the one proposed in the UK, yet they are all accompanied by compensatory schemes. Do the Government have any up-to-date information that they can share with the Committee? How will we be compensated?
There does need to be a change in the law to reflect what consumers are doing with music that they have legitimately purchased for their own personal use. However, to progress with this policy, the Government have to take two steps. First, there needs to be a specific provision for a compensatory scheme. Secondly, the exception should be redrafted in such a way that it is narrower, applying only to the copying of a physical copy and not interfering with the licensing of the potentially valuable cloud services market. To proceed with the exception as currently understood would be a grave mistake. It would undermine the system across Europe and exclude us from being involved in the reform of the levy system there.
The second and final exception I want to discuss concerns the important subject of education. For publishers of sheet music, “fair dealing” is a vague term unlikely to be understood by consumers, the vast majority of whom are self-employed music teachers and students. This term will cause massive uncertainty. Music publishers have neither the financial resources nor the inclination to take individual music teachers or students to court to have this clarified. The Government should reconsider this exception in light of the detrimental impact it could have on this culturally significant business. What safeguards do the Government propose to put in place to protect providers of specialist material who are dependent on teachers purchasing it?
In conclusion, we have a music industry to be proud of. It generates significant revenues, provides jobs, invests in talent and exports globally. When industries are as successful as this one is, it is easy to take them for granted. However, I firmly believe that this industry deserves to be respected and congratulated, just like all the others that succeed. The negative impacts for the music industry that I have outlined need to be addressed before the exceptions are introduced into law.
Lord Stoneham of Droxford (LD)
My Lords, I congratulate my noble friend Lady Buscombe on initiating this debate and welcome the Government’s ongoing initiative to modernise and try to simplify our copyright provisions. We clearly need to update the law in line with technological developments. There is some evidence that we have been falling behind our competitors and have not made much progress, as we should have done, since the European copyright directive was introduced more than 10 years ago. It is yet another area where the European Union dimension illustrates that we can achieve little on our own as one country. We have to develop our practice in line with other nations to protect our businesses and to counter the power of international companies which seek to ignore and override national legislation and, indeed, taxation policies.
It is a big responsibility to protect our own creative sector. There is huge potential to benefit from our very competitive creative arts sector. The European digital music market alone has grown from €200 million in 2004 to €1.2 billion in 2012. The existing copyright framework and efforts within the European Union to improve cross-border access to licensed content on a pan-European basis have enabled this to be possible and for UK music creators and companies to be a fundamental part of this successful development. However, on 10 October 2013, Maria Martin-Prat, head of the copyright unit in the European Commission internal market directorate-general, warned that if we get the copyright framework wrong, we risk undermining the economy.
There are a number of reasons for reform. First, we have to ensure respect for copyright, which modern copyright legislation must do, reflecting the application of modern technology and consumer expectation. It clearly makes sense, as the noble Baroness, Lady Warwick, said, to allow a teacher to use a quotation on an interactive whiteboard or to allow a museum to copy a photograph or film digitally to preserve it.
Secondly, we need to give consumers choice. We should value and encourage the consumer who obtains content legally and should break down barriers to competition, which discourage market delivery and choice. A greater freedom of choice for consumers to use appropriate technology must be encouraged. While clear and fair costs should be appropriate, we should discourage excessive charging or levies.
Thirdly, we need to keep the UK competitive. Improving copyright law must fundamentally improve the health of UK technology and creative arts businesses. Allowing copying for personal use will make it easier for businesses to provide new technology without being held liable for how consumers use their products. Allowing limited use of copyright material for parody will widen the resources for programmers and broadcasters, further enriching our cultural output. I sense that the Government have the right formula on parody as they seem to have the support of our principal broadcasters, which want greater freedom to use material for parody, while they have an interest in protecting their own content and archives.
Fourthly, we should be pioneering research. New technologies can assist significant advances in research. The text and data-mining exception will allow the United Kingdom’s world-leading scientific and academic communities to deliver new advances in medical technology and research.
I will make a few remarks on the detail of the proposed draft exceptions. I expect that there is little dispute over the disability exception or, indeed, over the research libraries and archives exception, which needs simplification to preserve content and improve access. The provision for education seeks to modernise legislation, but the problem for the future is that education is not simply a public good. It has strong commercial potential as well. We have a highly competitive advantage in higher education. Licensing is required to protect teaching content, particularly as it becomes more digitally sourced and with the growth of distance learning.
On private copying, most people accept the need for an individual to be allowed to copy copyright work for their own further use, provided it is not for commercial use. However, as we have heard, the music industry in particular is concerned about revenues that it has already lost in the digital economy and about the development of cloud services. This exception could provide a further threat to copyright music. It has to be made absolutely clear that making a copy for another person or entity would infringe copyright. The scope of an exception should be only for private and personal storage without additional functionality. Within this clarification, the music industry’s ability to license innovative value-added services, such as “scan and match” services in the cloud, would be seriously circumscribed. I hope that the Minister will confirm that he will look further at the music industry’s concerns about the need for further clarification and the whole impact of cloud services.
I return to my home ground of news content and the exception on quotations. Media providers are concerned about Google seeking to widen the exception on quotations, which could increase the likelihood of copyright infringement. It would be preferable for the quotation exception to be cast as a list of specific permitted purpose-based activities. Explicit exception for criticism and reviews should be retained as an exception in its own right. However, there is great concern that the quotation exception could include the principle of temporary copies made for the purpose of browsing by an unlicensed end-use, something that would be further complicated by cloud-based services. I hope that the Minister will be able to reassure us on these points in his summing up.
In conclusion, change, modernisation and simplification are inevitable. Copyright has to adapt to technology of the present and the future. We have to adjust to allow businesses to develop, but we must protect the competitive advantage of our creative businesses while seeking to simplify regulation, if we can. The Government are treading a difficult, even-handed path across a minefield. Provided that they ensure the fine print of the exceptions and reassure our key creative art providers, particularly in music and news content, about their worries their reforms are to be welcomed.
Baroness O'Neill of Bengarve (CB)
My Lords, with the leave of the Committee, I shall speak briefly in the gap. I had my name down for the debate but, apparently, it did not arrive. I wish to make just one point. I declare an interest as someone who, 40 years ago, had a royalty income, but who now has 10 times as much in print and only a vestigial royalty income. Why has that happened? There are many reasons for that but, above all, it illustrates the point that copyright holders and creators are no longer the same people. We should not fantasise that we are protecting creators when we protect copyright holders. Publishers have been wiser and have taken wider and wider rights over other people’s work. That means that protecting copyright owners will not incentivise new creation because we are pointing in the wrong direction.
In the area of academic work, where I work, publications in STEM subjects are grant funded and they may be viewed as fully funded from the public purse. Beyond the STEM subjects, this is rare. Research in other areas is not grant funded. I hope that the Minister can tell us a little about what incentive will remain for creators who survive and are faced with the new exceptions.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the noble Baroness, Lady Buscombe, for securing this debate and congratulate her on her very lucid introduction to the issues. I do not think this debate was quite what the Minister meant when he offered us a chance to have what I think he called in essence a Second Reading debate around the batch of exceptions that are being brought forward. None the less, it is welcome and I thank all noble Lords for their contributions.
As happens when you talk about intellectual property, we have also had a veritable raft of submissions from those outside. As I am sure the Minister is aware, this area is extremely well watched out there. Those of us who dare to put our heads above the parapet to speak about it tend to get a deluge of papers and material which make for interesting, but rather long, reading. However, that shows that this is a really important issue.
What problem are the Government trying to solve? As the noble Baroness, Lady O’Neill, has just said, the issue here is trying to find the right balance—that is, the link— between a premium for innovation and an assurance that there will be access to material, or, as my noble friend Lady Warwick said, between allowing material to be used while not losing the incentive to create. This is compounded by what many people call a rather too prescriptive European and international legislative framework, where the only margin of appreciation to reflect local interests or local markets is to take action through exceptions. This is why Professor Hargreaves called for a broader and deeper review of this whole area in his report. Sadly, that has not yet happened, and I think that we will have to return to it.
Underlying some of the concern out there in the real world is the worry about exactly what timetable and process we have to go through. I would be grateful if the Minister will say when the Government intend to lay the SIs, whether the exceptions will be bundled when they are laid before Parliament and, if not, whether they will be laid all at once or in stages. Do the Government still expect all of them to come into force on one date? Is that date April 2014? Will further impact assessments—several noble Lords have mentioned this—be prepared and be ready for the House to consider when the SIs are laid?
I take from this debate that, while some of the exceptions that have been proposed—some noble Lords have mentioned them—are good and supported and will not cause difficulty when they are implemented, some are so hampered by the quality of the current drafting or because of their inability to deal with some of the technological issues that have been raised that more work will still need to be done to get them right. In particular, I think that the text and data-mining exception, mentioned by several noble Lords and particularly by the noble Baroness, Lady Buscombe, needs to be re-examined carefully. The parody and pastiche exception seems to many people to be underdeveloped, and it needs further work. I do not think that people are against the idea of there being such an exception, particularly given the specifics of British humour, but it is important that, if it is there, it is defined properly.
We had several contributions on the education exception. It is clear that there is a need for change here in order that the exception, or indeed the practice, in the world of education is made internet-ready. Of course, if we are still in the age of blackboards then we need to move on that and make sure that we deal with all the points, including those about reprographics.
On private copying and remuneration, the noble Lord, Lord Berkeley of Knighton, made a very powerful plea for further consideration of whether the remuneration cycle has been lost in the process of bringing forward the exception. The noble Lord, Lord Stoneham, mentioned quotations and the concerns in that regard in regional and other presses. Again, I think that that should be looked at.
Other than that, we think that these things are broadly in the right place, except that there are some cross-cutting issues, including the very important point about the contract override. I think that what the Government are intending to do there is clear but the current drafting does not provide the necessary assurance.
What will kill this process is a combination of failure to listen carefully to what people who work in the industry are saying and imprecise drafting. The noble Baroness, Lady Buscombe, said that it should be “tight and right”, and I agree with her. There will be an awful lot of problems if we do not get this right and, of course, the downside of even getting it right may well be that there are unintended consequences that need to be brought through.
Another thought to bear in mind is that, in focusing hard on the wording that we currently have and thinking through where it might end up, we also have to think hard about where the public are on this issue. There is an element of a need for common sense on this point. The submission received from Which? a few days ago was very good on this. It tried to outline where the public are in their perception of what copyright does and does not permit in relation to private copying. The problem which it did not specifically raise, but which I think still exists, is that, if the Government are unable to provide the right framework for the legislation, there is a real danger that people will simply ignore it, and nobody will win on that basis.
It seems to me that what the Minister has to do now is to offer a further round of discussions on the current drafts. That should be possible and there is time for such discussions. That would give us a chance to make sure that the wording that is causing such concern at the moment is looked at once more. Given that the Secretary of State apparently held a meeting on these issues as recently as this week, it seems that the door is still open, and I hope that the Minister will confirm that that is the case.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)
My Lords, I am most grateful to my noble friend Lady Buscombe for initiating this debate. Of course, I have had the pleasure of debating copyright issues with her on a number of occasions, most recently on the Enterprise and Regulatory Reform Bill. Although we have not always been able to agree on some points, I have always found her interventions to be thoughtful and considered, and today was no different.
The Government have done much to ensure that interested parties have their say. Copyright is important for the creative industries and for the country—a point made by many noble Lords, particularly my noble friend Lord Stoneham. Copyright exceptions are no different, so the Government are taking proper account of rights holders’ concerns.
The Hargreaves process has been about listening, and listening carefully. Professor Hargreaves himself sought and received a wide range of views that informed his proposals. The Government then consulted fully on their own proposals, and these built on the work of Professor Hargreaves.
The Government considered the responses carefully and made changes before setting out their policy. The digital copyright exchange concept, for example, was further refined. The policy on exceptions was set out in December 2012. The Government then consulted interested parties on the draft regulations through its technical review and have continued to listen. However, the process has to conclude at some point. The Government cannot consult endlessly, but I continue to listen today.
My noble friend Lady Buscombe commented on the number of meetings that the Government have held with stakeholders over the past 18 months. Over the course of the year, I have had detailed discussions with creative industry representative bodies, creators, broadcasters, research institutions and others on this important topic. I have also been keen for Parliament to debate these issues, and I am glad that we have heard a number of viewpoints today.
A number of questions were put to me during the debate and I will, as ever, try to respond to all the issues raised. To begin, I would like to make a few general points. The Government know that in this area views are divided and that not everyone will be pleased all the time. The focus must continue to be on what we believe is good for industry, consumers and growth. The copyright system supports growth by offering incentives to creators and investors. This serves the public interest by stimulating the creation of new copyright works. At the same time, the system needs to serve the reasonable needs of the whole range of businesses and individuals affected by it. Everyone has an interest here, and the Government have done their best to hear everyone’s views.
The creative industries are a vital part of the UK economy and its culture. We have heard today about some of their concerns. The exceptions we will ask Parliament to approve are designed not to undermine business-to-business licensing. They will not harm the ability of content-owners to provide additional services to consumers in new and exciting ways. For example, the licensing of services such as UltraViolet and Tune Match will be unaffected.
What we have heard suggests that the copyright system has simply not kept pace with the digital revolution. My noble friend Lady Buscombe mentioned this. Copying is at the heart of many new technologies being used by consumers, teachers, academics, curators and researchers. As a result, a great many innocent, reasonable activities are illegal or questionably legal, simply because they involve some element of copying. The law needs to change. For example, a teacher should be able to put a quote on an interactive whiteboard in order to illustrate a point to the class; a museum should be able to make a copy of a film in order to preserve it for posterity; and somebody who has bought a CD should be able to copy it to their MP3 player in order to listen to their music in the gym. Changes are needed if users and creative industries alike are to make the most of technology. The Government have proposed relatively small but important changes that will apply to all technologies, including technology yet to be invented. We do not want out-of-date laws to restrict people’s use of new technologies and services.
We have also listened to concerns about complex copyright law. The proposed changes will remove up to 45 pages of unnecessary rules and regulations from the statute book while maintaining the essential protections that creative industries need and want. These changes should make copyright works more valuable to all by giving users clarity about their rights and building respect for copyright in the process. Creators stand to gain from these changes, particularly where they are innovating. Users will have new de minimis rights, but if they want to do more than those rights allow, they will need a licence.
We believe these are modest changes that together would contribute more than £500 million to the UK economy over 10 years. Additional benefits of around £290 million are predicted, along with positive effects on innovation, competition, education, research and, of course, respect for copyright law.
Let me now move to address the main points made and questions raised during the debate. I shall start by answering a question asked by my noble friend Lady Buscombe and the noble Lord, Lord Stevenson, on the timetable and the next steps. Following the technical review, the next iteration of the regulations is with parliamentary counsel, which is where we are now. They will then be subject to approval by me and the Secretary of State Vince Cable. The Government’s aim is to lay regulations in time for the common commencement date in April 2014. This means that it is likely that regulations will be laid before Parliament in February 2014. The noble Baroness, Lady Warwick, asked when the exception for text and data mining will be in place. On that question of timing, as with the rest of the package, the Government intend to put this exception in place in 2014.
I turn now to the issue of contract override.
Lord Stevenson of Balmacara
Can the Minister confirm whether he has yet decided how many individual exceptions will be introduced and if they are to be bundled in more than one group or separately?
Viscount Younger of Leckie
The noble Lord makes a good point about bundling. We are not in a position yet to be able to give an indication on that. I have indicated on several occasions how I would like to have as many of the SIs as possible unbundled, to allow further debate; but I am not in a position to give a full answer.
On the question of contract override, the Government want to see these benefits delivered in full. This is why they believe that, where a copyright exception has been established, restrictions should not be reimposed by contracts. My noble friend Lady Buscombe raised this subject, asking why the contract override provisions had not been subject to their own separate consultation and discussion. The contract override provisions were initially proposed in the Hargreaves review, and were subsequently consulted on explicitly by the Government’s copyright consultation which ran, as I mentioned earlier, between December 2011 and March 2012. Following that process, the contract override provisions were also discussed at each of the open meetings held during the technical review period. Given the attention and consideration that has been given to these provisions—in multiple sessions and consultations—the Government believe that this element of policy has been properly and thoroughly discussed.
My noble friend Lord Clement-Jones asked why the existing wording in Section 50 of the CDPA was not used. The existing wording in Section 50A, which must be read together with Section 296A, allows the making of backup copies of computer programmes. This provision declares void any contract terms that seek to prevent this activity. Our approach to this issue in the present context is slightly different. It does not void contract terms, but instead renders the terms unenforceable and only does so to the extent that they restrict a permitted act. Taking the approach from Section 50A of rendering the term void would be a disproportionate measure in many cases, and we believe is unnecessary here.
My noble friend Lord Clement-Jones also asked whether I was confident that the proposed contract override provisions were fully consistent with the Government’s obligations under the information society directive. The answer to that is in the affirmative; the directive is clear that the ability of member states to implement domestic provisions affecting contract law is unrestricted. My noble friend Lord Clement-Jones also asked in the same context why such a fundamental change to the application of UK contract law was being made by secondary legislation. This is not a new concept in British copyright law: contract override clauses exist already in relation to a number of exceptions and we believe that this is a sensible and proportionate approach that has no broader impact beyond allowing the use of these copyright exceptions by their intended audience.
I now turn to the important subject of impact assessments. The Government have worked hard to ensure that the proposed changes were based on evidence. The impact assessments were based on the best evidence available and were reviewed and validated by the independent Regulatory Policy Committee. My noble friend Lord Clement-Jones asked whether I stood by the proposed benefits of the exceptions, and the headline figure in Hargreaves included patents and the digital copyright exchange, which has been misunderstood in some criticisms.
On the numbers relating to exceptions, the Government have refined them to take into account further evidence, which is explained in the impact assessments. We stand by the estimates that are in the impact assessments, and these assessments have been validated, as I say, by an independent body.
I move on quickly to the important subject of private copying, which was raised by a number of noble Lords, including the noble Lord, Lord Berkeley. The noble Lord asked for clarification about the exception for private copying for personal use. This measure will give consumers greater freedom to enjoy creative content that they have bought, by allowing them to make copies for their own use. We believe it is a commonsense change which is widely supported by consumers and aims to build public confidence in the copyright system.
The noble Lord, Lord Berkeley, and my noble friend Lord Stoneham suggested that the private copying exception should not extend to cloud storage, and that that would be “a step too far”, I think was the expression used. We say that this is intended to be a technology-neutral measure and that it should be fit for the future. Consumers make little distinction between local and remote storage, and it makes little sense to do so in this legislation.
Briefly, in my final minutes, the important matter of text and data mining was raised, not least by my noble friend Lady Buscombe, who asked in this context about the meaning of the term “lawful access”. It is access that is legitimate based on a proper application of the UK’s legal framework law and, where applicable, relevant contract terms.
I fear that there are many other questions I have not had time to answer, and I pledge to write to noble Lords on their questions, and particularly on this important subject. To conclude, I reiterate that the UK Government—as noble Lords will already know—is committed to maintaining the incentives that copyright offers to all types of creator. These changes will achieve that, while also allowing consumers, researchers and many others to make reasonable use of the copyright works they have paid for.