Intellectual Property (Hargreaves Report)

Debate between Lord Foster of Bath and Mike Weatherley

Thursday 7th July 2011 Westminster Hall

[Mike Weatherley (Hove) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies, and I congratulate the hon. Member for Perth and North Perthshire (Pete Wishart) on securing this exceptionally well-timed and vital debate. I also draw the attention of hon. Members to my published declaration of interests. Intellectual property is suddenly popular, not only via my “Rock the House” project, but also in terms of Government attention. Intellectual property seems to have had more reviews than a west end show, and after 300 years, copyright is rightly back on centre stage.

As we have heard many times in this debate, intellectual property is the bedrock of a modern economy. Our traditional manufacturing base has gone, and industries that create new wealth are few and far between. There is one notable exception: we are very good at creating intellectual property in the creative industries. The figures speak for themselves—we heard some numbers earlier and I will introduce others. Global trade in IP licences alone is worth more than £600 billion a year. We are a major exporter of IP. In the UK, investment in intangibles has now outstripped investment in tangible assets by £137 billion to £104 billion. Our creative industries are world class and punch well above their weight.

Lara Croft was born in Wimbledon, and “The King’s Speech” dominated the Oscars. Adele is in the middle of a record-breaking run at the top of the US charts. Other countries envy the talent in this country, and as we heard earlier, our youngsters are queuing up to get a job in the creative industries. Some 2 million people already work in creative businesses. We want that number to grow, as do our youngsters who are looking for jobs now—that includes two of my children, who hope to join the creative industries shortly.

In recent years there have been 26 reviews into intellectual property. Who will invest in a country that is constantly reviewing its legislation and cannot decide whether to protect IP? Who will invest in a country that claims to value IP, yet turns a blind eye to theft on an unprecedented scale? Will the Minister confirm that there will be no more reviews of IP this Parliament? Will he unequivocally state whether the UK will protect IP or allow it to migrate elsewhere?

One example of the problem is the unauthorised reproduction of magazine and periodical publications online. If professional publishers are to continue to make significant investments in new applications for online publications, illegal copying and distribution must be more effectively addressed. That requires support for the enforcement of rights, and support from consumers for the use of legitimate services. Growth will not be promoted by removing or reducing rights that act as incentives for investment.

[Mr Foster]

I thank the hon. Gentleman very much for drawing attention to magazines. Often in these debates, we talk about music, film and video games; rarely do we mention magazines. However, the figures show that there is huge piracy of magazines. Future Publishing in my constituency is in real difficulty because of what is happening.

[Mike Weatherley]

I thank the right hon. Gentleman for his intervention. Future Publishing has pointed out to me a website—I think it is in Poland—that reproduces all its magazines online to as high a quality as it can. That is the type of thing that we need to shut down, so I welcome the intervention.

[Mr Foster]

I apologise for intervening again, but the hon. Gentleman is absolutely right. I, too, have seen that website. Pornographic material is included on the same site. The interesting thing is that it purports to be a genuine site, in that people have to pay a small amount of money to use it, so it is misleading consumers. It also contains advertising from reputable firms. We must deal with that.

[Mike Weatherley]

The right hon. Gentleman is exactly right. I think that the charge is equivalent to $10 a month, the payment of which allows unlimited downloads. Zero cents of that $10 goes back to the publishers.

As we come out of the recession, there is much talk of rebalancing the economy. Where will the growth come from? We cannot compete on labour costs and we do not want to. Our strength is in pharmaceuticals, high-end engineering, brands, bioscience and, of course, the creative industries. Our education publishers are No. l in the world. Our music industry is at No. 2. Our games industry used to be at No. 3—the position is under threat as other countries adapt and offer incentive packages that we are not matching. Surely we should be as proud of our creative industries and their podium positions as we hope to be of our athletes next summer.

To be fair to the present Government, the Hargreaves review is their first review of IP. I should also point out that there is a duty on those in the creative industries to adapt their business models far more quickly than they have done in the past. That includes reduced pricing models for the prime product and a changed emphasis on secondary income streams, such as live music and merchandising.

The Government’s response to the Hargreaves report is a tailor-made opportunity to celebrate our creative industries, and to confirm that we are open for IP business on a global scale. Will the Minister reassure banks in the UK that we are the best place in the world to invest in IP businesses? Will he confirm to creative businesses in this country that their assets will be protected by legislation? Will he encourage new talent with the message that people’s rights in respect of what they have created will not be reduced by exemptions and undermined by unnecessary regulation?

Let me turn to the Hargreaves report. It is better than I was expecting; I know that many other hon. Members have said the same. I have to admit that my heart sank when I met Professor Hargreaves and he hinted to me that he wanted to introduce US-style fair use here. His argument was that our IP laws were preventing internet companies from launching, yet I remember many search engines and social networks starting here. Some, such as Mumsnet and Friends Reunited, have been extraordinarily successful. They were not held back by our IP laws; they just did not have access to the same funding as Google and other silicon valley giants. Introducing fair use here would help only the likes of Google—established players with deep pockets that can fund the legal test cases that are such a feature of the US system. It was therefore with some relief that I read in the Hargreaves report that he rejected fair use for the UK. That is a sensible recommendation, and I urge the Minister to endorse it.

However, the report goes on to recommend a range of new exemptions. Let us be clear about what an exemption means for a creator. On the one hand, with our 300-year-old copyright tradition, we say that an author owns his work when he writes something. It is his property; he created it, and it is his. On the other hand, with an exemption, we say that he does not own his work any more in certain circumstances. Of course, there are situations in which the public interest must outweigh a property right, but we should be wary of taking away someone’s property, especially their own creation.

One example involves text and data mining. No case is made in the report for a text and data mining exemption. Such mining is simply described as making it easier to crawl the internet for material. Surely that is what Google and other search engines do on a commercial basis. Do we really need an exemption to make Google’s life easier? Should it not be obtaining licences if it wants to use other people’s material?

Parody, as we have heard, is another example. Parody is almost the hallmark of British comedy. It can hardly be argued that there is a shortage of parody in the UK. However, the Hargreaves report seems to think that there is a problem. The report concludes, with seemingly no evidence, that we should have a parody exemption, but should someone be allowed to take someone else’s work just because they are making fun of it? I do not see how parody justifies removing a creator’s basic rights in their work. Then there is research. Of course there is value in building on the work of others, but does that mean that the original researcher should get nothing for their work? I strongly urge the Minister to reject those recommendations in the report. This goes to the heart of copyright as a property right. Arguably, something that someone has created is even more precious than property. Our legislation gives creators ownership of their work. We should not take those rights away without good reason.

There are two areas where there is justification for an exemption, and that is broadly accepted by creators. The first is archiving. We have some unique collections of film and music in this country; indeed, I understand that film originated in my constituency of Hove. The British Library, for example, has the national sound archive, with millions of recordings going back to the birth of the gramophone, mostly donated over the years by record companies. Making digital copies is an obvious way of preserving those for future generations. When the Government consulted on an archive exemption three years ago, industry backed it. We should implement it now.

[Mr Christopher Chope in the Chair]

The second area is format shifting. That is copying CDs to MP3s, or DVDs to an iPhone or similar—something that millions of people do, despite its being illegal at the moment. Having just parted with cash for both a CD and their new MP3 player, consumers rightly expect to be able to copy music and films across without paying any extra, as they in effect paid for that in the purchase price.

The sticking point was whether musicians should get some recompense for that format shift. In the rest of Europe, that takes the form of a levy on copying devices. I do not like the idea of a levy. It is a blunt instrument that does not necessarily follow the market. Surely some form of licence could be allowed, provided that the material is solely for the private use of the purchaser. If it turns out to be impractical to stop internet file sharing, we could revisit the idea of a levy on equipment, as that would get some revenue to the rights holders and is attractive for its ease of use. In the meantime, I urge the Government to reject the idea of a levy on equipment and to allow personal-use format shifting, provided that an original licence has been purchased—in most cases, that would simply be someone paying for the CD for their own personal use.

On exceptions, the Hargreaves report gets some things right, but not others. The challenge for Government will be working out what to embrace and what to ditch.