Iain Wright
Main Page: Iain Wright (Labour - Hartlepool)(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Iain Wright (Hartlepool) (Lab)
I thank the Minister for outlining the provisions in the Bill.
Intellectual property matters, and it is growing in importance in the modern economy. Britain will pay its way in the world, create wealth and provide prosperity and higher living standards for all her citizens not through a race to the bottom and by trying to undercut the rest of the world on wage rates and employment rights, but by emphasising the importance of knowledge, creativity and innovation. That is certainly true of our creative industries. As the CBI said in its recent report:
“Our culture and creativity is at the forefront of the UK’s global appeal”.
Our fashion industry is worth almost £21 billion. As the House can see, I am a leading ambassador of that industry. We have the largest broadcasting hub in Europe. Global successes such as “Downton Abbey” would not have been made here and would not have provided jobs in the UK and export success for this country had it not been for the strong IP framework.
Britain boasts one of the world’s largest music industries. It generates £3.5 billion for the UK economy and provides more than 100,000 jobs. In four of the past five years, British artists were the highest selling artists in the world. One in eight albums sold anywhere on earth are by British artists. It is particularly apt that we are discussing this matter today, because I understand that today is blue Monday, which is apparently the most miserable day of the year. Right hon. and hon. Members will know that the highest selling 12-inch record of all time was “Blue Monday” by New Order. I know that the Minister is a fan. I can see him now in the Hacienda in Manchester, with a wide-eyed stare, dancing to “Blue Monday”.
The UK has the fastest growing digital economy in the G20. Our video games industry is worth £1 billion a year and is growing at a rate of 6.5% per annum.
The UK film industry goes from success to success. It supports almost 120,000 jobs in Britain and contributes £4.6 billion to our GDP. In the past few years, the global film industry produced 42 blockbuster films—that is a film with a budget of more than $100 million. Of those 42 films, 24 were produced in Pinewood or Shepperton studios. That is a fantastic achievement for our country and something of which the House should be proud. I am particularly pleased that the new “Star Wars” film is being filmed here. I hope that it will be more like “The Empire Strikes Back” than “The Phantom Menace”. The recent success of “12 Years a Slave” again shows the enduring quality of the British film industry.
Ian Paisley (North Antrim) (DUP)
Will the hon. Gentleman also plug “Game of Thrones”, which is filmed in Northern Ireland and is one of the most successful HBO offerings on television?
Mr Wright
The hon. Gentleman makes a very good point. In the creative industries, and in industry as a whole, there are incredibly important hubs across the United Kingdom. He mentions the film industry in Northern Ireland and there are other examples, such as the great video games cluster in Dundee. There are pockets across our country where creativity and industry are booming.
The UK publishing sector is bigger than our pharmaceutical industry and reaches across all aspects of our economic life. The book market in the UK is the fifth largest in the world and is growing. Every year, 120,000 new book titles are published, including academic journals, titles that tie in with TV or film rights, novels and biographies.
Mr Sutcliffe
My hon. Friend will be aware of the report by the Culture, Media and Sport Committee on creativity and innovation, which highlights the importance of the book industry. Will he speak about the concerns of the book industry about the role of Google, whose representatives have visited the Prime Minister’s office 17 times in the past two years?
Mr Wright
I thank my hon. Friend for that question, but where does he think I am getting these statistics, if not from his Committee’s report? It showed the important role that creative industries play in our economy in providing well-paid jobs, innovation and investment in the country. It also mentioned the tension between content companies and technological companies. My hon. Friend mentioned Google, and I seem to remember reading in the transcript of his Committee’s proceedings that the IP Minister, Viscount Younger, said that he finds it more difficult to get into No. 10 Downing street to meet the Prime Minister than the representatives of Google. Perhaps that needs to be dealt with.
In the Committee’s report on that excellent review of the UK creative industries, my hon. Friend and other hon. Members stated:
“Given the importance of the creative sector to the UK economy and the relative importance to that sector of strong IP protection, strongly enforced, the Government must do more to protect and promote UK IP as a system for growth.”
It would be wrong, however, to think of IP as confined only to the creative industries. High-value manufacturing is dependent on innovative design.
Helen Goodman (Bishop Auckland) (Lab)
Will my hon. Friend give way before he leaves the subject of the creative industries?
Helen Goodman
Everything my hon. Friend has said about the creative industries shows how important they are. Does that not show how bizarre it is that the Government have not made the creative industries one of their 11 priority sectors?
Mr Wright
Yes, it does; my hon. Friend is spot on. Given that 11 industrial sector documents—I think—have been produced, and that the creative industries are a fantastic growth area that provides innovative and well-paid jobs and projects around the world an image of the UK’s soft power that is envied by other countries, and given how that can bring further investment and prosperity to our country, I do not understand why the Government have not got a creative industries industrial sector document. Perhaps the Minister will respond to that point when he sums up the debate. Perhaps it is because Whitehall is often silo-driven and IP is often in a conflict between the Departments for Business, Innovation and Skills and for Culture, Media and Sport. No one from the DCMS ministerial team is on the Treasury Bench, and I wonder whether there is a degree of tension and conflict. Are the Government speaking with one voice when it comes to IP and to supporting and promoting our fantastic creative industries?
Mike Weatherley (Hove) (Con)
Does the hon. Gentleman agree that it may be time to start moving towards a US-style IP tsar to co-ordinate the various Departments?
Mr Wright
I think the hon. Gentleman is pitching for that job, so he should have declared his interest. However, he makes an important point. During deliberations in Committee, it will be important to table amendments to consider what the Intellectual Property Office will do to promote innovation and jobs in the UK economy. Having some sort of IP champion, IP tsar, or whatever the hon. Gentleman wishes to call the role, needs to be considered closely, and hopefully we will do that in Committee.
Let me turn at last to manufacturing. High-value manufacturing is dependent on innovative design to produce comparative advantage. Indeed, high-value manufacturing in the 21st century requires a blend of design, creativity, innovation and production to compete and succeed. Modern means of research, development, production and distribution all emphasise in the modern age open, innovative models and the sharing of ideas. That makes IP more, not less, important.
The increased proportion of intangible assets on the balance sheets of many firms means that there is an ever-growing importance to securing returns from those assets. That in turn means that companies need to pay more attention to IP issues. In the 21st century, a strong intellectual property regime is needed. IP should not be seen as regulation or bureaucracy, with all the negative connotation that that entails. IP is not regulation but a legal right, and it would be wrong to suggest that, in an era of globalisation and digitisation, IP is irrelevant or an anachronism that needs somehow to be swept away. Businesses will not invest if their innovation or creativity is not protected. If somebody has created or invested in something, they should have the right in law to derive benefit from that creation or investment. That right should be protected and enforced by the legal system.
The Minister rightly referred to the recent global IP index, produced last year by Taylor Wessing. It should be a source of pride to the House that the UK was placed No. 1 in the world for IP. We need to protect, maintain and enhance that position as much as possible. However, the difference between the top three ranked nations in that report—the UK, Germany, and Netherlands—was only 0.2%, showing intense global competition and the perils of introducing proposals that might undermine our position as No. 1 in the world.
Jim Dowd (Lewisham West and Penge) (Lab)
My hon. Friend says that the UK is the No. 1 place in the world for IP, but the ranking in that survey was actually for the enforcement of copyright and trademarks. It was ranked only in second place for patents and in fifth place for design. IP is not a single entity; there are a lot of activities, and we protect some better than others.
Mr Wright
My hon. Friend makes an important point. There is a second consideration. We might have the best framework in the world, but if it is not enforced properly, it is largely redundant. We need to ensure that enforcement is maintained.
It is important to retain our position as No. 1 in the world for IP. We should also reinforce the need to avoid needlessly tinkering with the system. The House will agree that IP needs to adapt to take account of changing circumstances such as globalisation; growing collaboration across firms; and new, often disruptive, technologies such as 3D printing and digitisation. All of those bring many challenges. However, it is also important to be mindful of avoiding changes that undermine business certainty and thereby deter investment and innovation.
It is in that context that the House considers the Bill, which is brief and flimsy. It gives the impression of being the remnants of a much larger piece of legislation—perhaps it is the remnants of the much vaunted but hitherto unseen communications Bill. That reinforces the notion that the Government do not have a strong and clear vision on how to proceed with IP, leaving industry with uncertainty. Ministers could be accused of tinkering and making piecemeal changes that could undermine confidence and investment in our economy.
In many respects, the Government are continuing the approach they used last year with the Enterprise and Regulatory Reform Act 2013, several sections of which are devoted to IP and copyright. They were not discussed with stakeholders, and subsequently there was much alarm within the creative industries. The Act deterred investment in the UK economy. We should avoid that when possible.
As the Minister has said, the Bill is meant to simplify and to provide greater clarity and certainty on the IP framework, but it often does not do so. For example, the Government’s recent design consultation asked whether the Registered Designs Act 1949 should be amended by providing greater consistency between joint ownership provisions for both registered and unregistered designs. All or most respondents to the consultation agreed with the move to greater clarity and consistency in principle, but for whatever reason the Government have decided not to change the law in that regard.
Clause 13, to which I will return, has been mentioned a number of times. It provides a significantly different approach to registered and unregistered design rights. It is as if the Government are saying, “We like consistency in certain areas, but not in others,” which merely provides inconsistency by a different name. The measure is a new inconsistency, so it provides greater complexity and subsequent uncertainty to business. We will want to scrutinise the Government on those inconsistencies in Committee.
That said, much in this slight Bill is to be commended, and the Opposition will not oppose it this evening. For example, clause 8 is welcome. It allows UK implementation of The Hague agreement, which allows for the protection of design rights throughout the EU with a single application rather than multiple applications in each country. That should help small and medium-sized firms to cut down on costs.
I am pleased that, in another place, the Government moved away from implementing that measure via the negative procedure, and that they listened to my noble Friends on the Opposition Front Bench and the recommendations of the Delegated Powers and Regulatory Reform Committee and moved to the affirmative procedure. I hope that that listening exercise will continue in Committee.
Clause 17 enables the establishment in the UK of the unified patent court. The use of the court throughout Europe will provide a consistent and welcome framework in participating European country. It is particularly pleasing for the UK economy that part of the court will be based in London, with the prospect of another part of the country—perhaps Hartlepool—being the location for a second part. I commend the Prime Minister, good European that he is, for helping to secure that.
Pete Wishart
One place where one of these divisional courts will not be—so far—is in Scotland. Will the hon. Gentleman join me in ensuring that the Bill is amended so that the Court of Session can continue the centuries-long tradition of ruling on patent cases in Scotland? Without that, the extra costs and burdens on Scottish businesses will be intolerable.
Mr Wright
When I was reading Hansard from another place on this matter, many noble Lords mentioned the importance of Scotland as a possible second area. It would be useful in Committee to discuss that and, possibly, the wider point of whether independence for Scotland would help to produce that—or otherwise, as I would suspect.
Exemptions in the Freedom of Information Act 2000 for continuing programmes of research, as contained in clause 20, will maintain UK universities’ excellent reputation around the world for research, without, as I think the Minister said, forcing institutions to make public research without its being completed or subject to peer review. That is also to be welcomed. There are certain provisions, however, that will need to be looked at closely in Committee, and which might have a detrimental effect on UK-based innovation. The Minister mentioned this point, and I was pleased with his accommodating remarks on the possibility of amendments in Committee. This is a concern for UK-based manufacturing.
Clause 3 extends the qualification of unregistered design rights to the functional designs of companies incorporated in countries that do not offer reciprocal protection for UK functional designs. The Minister mentioned the IP Federation, which has been particularly strong on this point. It stated:
“Under the changes proposed in Clause 3 of the IP Bill, parity no longer exists and UK manufacturers are strategically disadvantaged with additional hurdles being introduced to the manufacture of functional designs in the UK. This will directly impact those engaged in general engineering because of the importance of functional designs which are covered by UK UDR.”
It went on to state:
“The manufacturing facilities of both small and large UK-based engineering companies will be seriously impaired by extending UK UDR to foreign corporate entities. Careful consideration would need to be given to the location of manufacturing facilities as the manufacture of functional articles in the UK will be inhibited. It would become more attractive to move design and manufacturing offshore and to commercially source functional designs from businesses outside of the UK where the copying of functional designs is lawful.”
It is important for the rebalancing of the economy that we in this House do nothing that adversely affects high-value manufacturing in this country. Clause 3, as currently drafted, poses a threat to investment and manufacturing capability in the UK, and could put us at a competitive disadvantage with other parts of the world when considering manufacturing locations. That cannot be right. I am pleased with what the Minister has said. We will examine this matter closely in Committee. I hope we can work together to introduce amendments that do not inhibit UK-based manufacturing.
As has been said, the most contentious part of the Bill is clause 13, which brings into law criminal sanctions for deliberate infringement of registered designs. I think that this will take up a significant part of our deliberations in Committee. On the one hand, as I think I mentioned earlier in my remarks, the Opposition strongly believe in the principle that a person who has created, invented or designed something should derive some protection of ownership in law, together with the right to derive benefit from that creation, invention or design, and that appropriate and proportionate sanctions should be put in law to assert that legal right. If criminal sanctions exist for copyright or trademarks, why not for design, especially when the future UK economy will rely so heavily on innovative design? This is a strong argument, especially when there is already similar protection in other parts of the IP framework, such as for copyright or trademarks. However, the introduction of criminal sanctions with the prospect of 10 years’ imprisonment is a serious matter and must be considered closely by the House.
We will be probing the Government in Committee on whether clause 13 is appropriate and proportionate, whether it would act as a sufficient deterrent to those who deliberately infringe designs—steal, for want of a better term—or whether it would unfairly criminalise those who accidentally or inadvertently copy a design. In another place, the Minister said the arguments were finely balanced. We need to ensure that that balance is well drafted in the Bill. Clause 13 is opposed by many stakeholders working in this field, such as the IP Federation, the Intellectual Property Bar Association, the City of London Law Society, the Chartered Institute of Patent Attorneys, and a number of experts and specialists, including Sir James Dyson, as we heard from the hon. Member for North Wiltshire (Mr Gray), and the Ministry of Defence.
As I said, we will consider this matter closely in Committee, but what causes me most concern about clause 13 is that, as several stakeholders have stated, criminalisation, with the prospect of up to 10 years’ imprisonment, might have a “chilling effect” on innovation. New products might not come to market or benefit the UK economy because people are reluctant to risk a criminal trial and 10 years’ imprisonment. I suspect that in Committee we will deliberate at length about the nature of innovation—whether there are great leaps forward or whether innovation is undertaken by swinging from tree to tree in the jungle or, to switch my metaphor, by standing on the shoulders of giants. We need to be careful to strike the right balance in order to protect designers’ creativity and ingenuity while avoiding the risk that no further product improvements will be made through adaptation.
There is a second concern with clause 13 that I think the hon. Member for Perth and North Perthshire (Pete Wishart) has mentioned. If the purpose of the Bill is to simplify and make consistent the patchwork, as Hargreaves calls it, of differing rights, I do not see why registered designs should be subject to criminal sanctions, but unregistered designs should not be. During the passage of the Bill in another place, the Government could not provide a logical or rational explanation for that inconsistency. In Committee in another place, the Minister stated quite bluntly:
“The introduction of criminal sanctions for unregistered rights could lead to a negative effect on business and innovation.”—[Official Report, House of Lords, 13 June 2013; Vol. 745, c. GC409.]
If that is the case, why are registered designs different? The Minister also said that SMEs
“do not tend to register their designs”.—[Official Report, House of Lords, 13 June 2013; Vol. 745, c. GC395.]
It is difficult to see, therefore, how the Government’s proposals in this part of the Bill will strengthen innovation, prevent infringement for the vast proportion of designs in this country and deter exploitation of small and micro-firms by perhaps more unscrupulous businesses. Registered designs do not imply approval or confer an inflated status, so there is no possible legal justification to treat them differently in this regard.
Many UK businesses clearly see merit in the UK unregistered design right, which helps their competitiveness and commercial position. Why, then, should that right not be protected through criminal sanctions when the Government propose that for unregistered designs? I cannot see anything that would prevent companies from identifying unregistered designs, registering those designs for themselves and then stating to the original designer, “You’ve infringed our registered design. We will bring a criminal case against you for deliberately copying our registered design and you may go to prison for 10 years unless you pay us a large fee or assign the rights of the design over to us to exploit anyway.” How does that protect small and micro-firms or help to promote innovation? I do not think that the Government have offered an adequate explanation for this discrepancy, so we will want to scrutinise it further in Committee.
I think the whole House is united in thinking that a strong and consistent framework for intellectual property is essential if the UK economy is to prosper and thrive in the 21st century. A balance is needed to ensure that the IP regime is consistent and provides certainty, while adapting to rapidly changing economic and technological developments. A balance is also needed between protecting the rights of creators and innovators and not discouraging further innovation or possibly disrupting entrepreneurs, companies and technologies. We hope to work closely and constructively with the Government in Committee to strike those balances and ensure that the UK economy can thrive in the modern world.
Mr Iain Wright
With the leave of the House, I wish to respond to what has been a very knowledgeable debate—fittingly, given that IP is key to knowledge-based innovation and industry.
Ten hon. Members have spoken from the Back Benches, starting with the hon. Member for Manchester, Withington (Mr Leech), who is not in his place, but who mentioned how design was worth £33.5 billion to the UK economy, as did the hon. Member for Burnley (Gordon Birtwistle). He said that 4,000 designs were registered, but that about 18,000 to 25,000 unregistered designs were logged on the ACID register—a point also made by the hon. Member for Cities of London and Westminster (Mark Field)—highlighting the possible inconsistency between the approaches to registered and unregistered designs in clause 13. He also said we needed greater consistency in our approach to digital copyright theft, along with physical copyright infringement, and called for the repeal of section 73 of the Copyright, Design and Patents Act 1988.
My hon. Friend the Member for Lewisham West and Penge (Jim Dowd) pointed out that not even the Prime Minister knows who the IP Minister is. To be fair to the Prime Minister—not a phrase I use very often—there have been three IP Ministers in the last two years, so it is unsurprising that he has not been able to keep track. Importantly, he also mentioned parasitic packaging and his experiences of Worcestershire sauce at The Hare & Billet, which we will cover later in Committee. As my hon. Friend the Member for Bishop Auckland (Helen Goodman) said, there is a sense of a common culture. For example, ready salted crisps tend to be packaged in red—not a bad colour at all. Flavours can denote across the board what colour can be used, but when a design—for shampoo or Worcestershire sauce, for example—becomes misleading, we get into the realms of parasitic packaging. We need to explore that in Committee. He also made a good point about fraudulent websites and, in the public sector, mentioned Transport for London. The Alliance for Intellectual Property has shown me websites for Ugg boots that look very credible but are illegal, fraudulent and not providing a proper service. Again, that should be looked at.
The hon. Member for Cities of London and Westminster generally welcomed the Bill, but said that more needed to be done. He said that his spiritual home was Soho, which started to get me worried, but he soon brought it back to animation and video games, on which he said it is important that we stay ahead in the global race. He makes an important point. Canada is aggressively pushing to be the leading place in the world for video games and animation, using tax credits and other things. We have to be mindful of that. He made another important point about tech companies and their scale. The UK is good on start-ups, but perhaps not so good at growing them to the scale we need. That might have something to access to funding, as opposed to IP, but it is certainly something to look at.
The hon. Member for Perth and North Perthshire (Pete Wishart) was great in Runrig, but he is even better in MP4 and has consistently advocated a strong IP framework. I think he said that we tamper with it at our peril and made an important point questioning what was happening with the delay to statutory instruments for copyright exceptions. He made another important point about how these things should not be bundled together but taken, I hope, on the Floor of the House, and certainly individually so that we can consider things such as parody and private copying. He made the astonishing point that 77% of singles and 64% of album downloads had been directed via an illegal site. That is something we need to look at.
The hon. Member for Hove (Mike Weatherley) is the Prime Minister’s IP adviser. He brought a lot of knowledge and experience to the debate. He said that helping the consumer to buy legitimate products was a key concern and mentioned the three elements he wanted to deal with—education, carrot and stick. He also made the important point that a 2D drawing was covered in the Bill and IP legislation, but that a 3D physical manifestation of that design was not. Surely, that cannot be right and needs to be dealt with.
My hon. Friend the Member for Bradford South (Mr Sutcliffe) said that education was at the heart of all this. His area is using creativity in creating jobs for the future. He mentioned the importance of tax credits and touched on film tax relief, which was introduced by the last Labour Government, showing the importance of certainty and a long-term policy framework. He also mentioned enforcement and the role of trading standards.
My hon. Friend the Member for Bishop Auckland, who is an excellent shadow media Minister but will be an even better actual media Minister, pointed out that the media industry lost about £250 million a year through illegal downloading. The music industry has been slow to deal with illegal copying and digital technology—I think of Napster a couple of years ago—but interestingly this weekend’s Financial Times said that downloading was now being eclipsed by subscription services such as Spotify. We can talk about whether artists, such as Thom Yorke of Radiohead, get enough royalties from subscription services, but pushing people in that direction seems to be the way the music industry is going in order to raise revenue. She also said that the IPO should have an enforcement role and brought to bear the points about stonemasons and “Scarborough Fair”.
More than anything else, this debate has shown that the House appreciates and recognises how vital IP is to the future prosperity of the UK economy. This is an important Bill that will be studied closely in Committee to ensure that the UK economy can prosper and thrive. I look forward to hearing the Minister’s response to the points raised today, but there can be no doubt that IP matters to the UK economy.