Intellectual Property: British Economy

Kevin Brennan Excerpts

Tuesday 28th February 2017 Westminster Hall

[Nigel Adams]

Absolutely. I completely share my hon. Friend’s pleasure at IP’s inclusion. That tells us that the Government are taking IP, which cuts across so much of our country’s industrial policy, seriously. I am very much of his opinion.

The Digital Economy Bill, which is in the other place, has only three clauses on IP. I do not take the Government to task for that—it has been a long time since the previous legislation, the Digital Economy Act 2010, and there is much important ground to cover—but it serves to highlight the need to prioritise examination of the area in more detail.

To that end, I welcome the acknowledgement of IP’s importance in the Green Paper on industrial strategy, which my hon. Friend the Member for Warwick and Leamington (Chris White) mentioned, and the allocation of this important brief to the Minister for Universities, Science, Research and Innovation, my hon. Friend the Member for Orpington (Joseph Johnson), who is known for his seriousness and attention to detail, as well as his great cricketing prowess.

From established phenomena such as the Beatles and David Bowie to emerging superstars such as Stormzy and Skepta—a great favourite of the Minister for Digital and Culture, my right hon. Friend the Member for West Suffolk (Matt Hancock)—and from our brilliant film and television exports to our technological innovators, such as those who created the bagless vacuum cleaner and the worldwide web, the UK has never been short of ideas.

IP is critical to our growing our tech sector, but I will focus my remarks on the creative industries, in my capacity as chair of the all-party parliamentary group on music and as a member of the Select Committee on Culture, Media and Sport. Other hon. Members will, I hope, bring up other areas of interest during the debate. This month, for example, the all-party parliamentary group on intellectual property held an inquiry into IP enforcement, which was incredibly valuable. I believe the report has now been published. The APPG chair, the hon. Member for Perth and North Perthshire (Pete Wishart), is in his place, so I hope that he will share more of that report with us.

This debate is about the importance of IP to the British economy and, to give a brief reminder, the numbers speak for themselves: the creative industries account for approximately 7% of GDP; for £187.4 billion in gross value added, according to Department for Culture, Media and Sport estimates; and for exports worth almost £20 billion. That does not even account for the cultural soft power of having such a powerhouse in our creative and music industries. I would highlight the 35% growth in the export value of the live music sector between 2014 and 2015, and the fact that five of the 10 top-selling artists globally in 2015 were British. As anyone who has turned on the radio recently or watched the Brit awards last week will know, 2016 was surely another great year for the music industry.

Now to the problems. Piracy is obviously one of the biggest threats to creators being allowed to capitalise on their own efforts and to see returns on any growth in interest in their work. Without that, not only will they not be able to continue to create, but they will certainly not be able to invest in mentoring or developing new talent. We should keep in mind that all such issues are interconnected for the industry. We encourage record labels to advance social mobility through pioneering apprenticeship schemes or engagement with at-risk youth, for example, but it is harder for us credibly to ask them to put into society when we are not also making serious inroads into getting our laws and regulatory regimes up to scratch in dealing with the new threats to creative industry revenues.

In that vein, I welcome the agreement announced last week between the search engines, such as Google and Bing, and the Intellectual Property Office, with the aid of the DCMS, on an industry code of practice for tackling piracy. In changes that are expected to be rolled out by the summer, search engines will modify their algorithms to demote piracy sites in results, making them harder to find. That is a good first step.

[Kevin Brennan (Cardiff West) (Lab)]

Does the hon. Gentleman agree that welcome as that change is—along with him, we pressed for that during the passage of the Digital Economy Bill through the Commons—it is important for the search engines to follow through and genuinely and sincerely enforce the code, even without the potential threat of legislation hanging over them?

[Nigel Adams]

I completely agree with the hon. Gentleman, but it is a start. I understand we are the first country in the world to put together such a code of practice, but enforcement is really important, because without the ability to take a stick to the problem we are somewhat limited. I very much welcome the agreement as a start, but he and I both tend to speak on the side of creators, who would like to see even bolder measures. It is only one piece of the puzzle, but we need to welcome positive changes when they are made, so I commend Google and Bing on their agreement with the IPO. It is easy to bash big companies, but they should be commended in this case. I hope they will monitor changes in traffic to such sites, to see if the measure is having the intended effect, and share those results with us and with the creative industries in due course.

Last July, I organised a debate here in Westminster Hall on one small part of the topic, which was artist remuneration for online streaming. I highlighted the example of a songwriter who had told me how he was entitled to 25% of the revenue from a song he had written. It had had 3.2 million plays on YouTube, but the young man was hardly likely to retire on the princely sum of £5.39, which was what he received for those 3.2 million views. I have to report that since then, I have continued to hear similar stories, so I am keen for that to change. The area is ripe for more engagement between the Government and content hosts.

On the legislative side, the basis of the music industry’s concerns is the so-called safe harbour laws, which in the US, the European Union and the UK give user upload streaming services the same protection from copyright as host providers such as personal cloud locker services. That is despite the fact that they operate entirely differently and, more importantly, impact on the market in different ways. That is one area in which we could look now at what changes we might make once we have left, or while we are arranging to leave, the European Union. We need to build a consensus in the time available.

On the industry side, let me compare Spotify and the user-upload site Dailymotion. Both allow users to search for and listen to Adele’s track “Hello”, which is one of the fastest selling tracks of all time. Spotify is licensed to stream that track and therefore pays the artist, the songwriter, the producers, the musicians, the publishers and the labels—the people who are so crucial to the creation of that content. Dailymotion—rather an unfortunate name for a company—does not pay. Due to ambiguity in the safe harbour framework, user-upload services can claim to be mere hosts of their users’ content. As such, they are not required to share with creators the wealth that they generate. That is simply unfair. It would be great if all streaming services were proactive about improvement, rather than appealing to the lowest common denominator. I was in business before coming here, so I understand that the competitive world can be a difficult place, especially for such sites, but that does not change the fact that they profit from someone else’s intellectual property without paying them. I am a free marketeer, but that is not the free market—that is simply theft.

I stand ready to praise, both inside and outside this House, any steps that the Government or the industry take to improve the situation. I understand that a previous attempt by creator groups to reach a deal on streaming revenues with the industry went through 17 drafts over almost two years and ultimately ended in stalemate. Given that, if the Minister committed the Government to similar work to facilitate action on this issue as they undertook for the search engine code of practice, I would happily congratulate him immediately.

I am pleased to commend the “Get It Right from a Genuine Site” campaign, which is backed by major industry players such as the British Phonographic Industry—I am pleased that I pronounced that properly—and the Motion Picture Association, as well as the Government. The campaign educates people about the harms and dangers of piracy to both creators and their own identity security, which is threatened by dodgy sites, but there is significant evidence that the law in relation to illicit streaming is not sufficient.

USB sticks such as the Amazon Fire stick and boxes with Kodi software, which are used to facilitate the streaming of pirated material direct to users’ televisions, are a growing problem, because that material is made to look legitimate. A user buys such a device—on Amazon, ironically—which may be a legitimate tool for the storage and playback of purchased content, and then loads it with a program that sweeps the internet for high-quality streams. Such devices can also be bought fully loaded, with that software having been installed by a third party, many of which are criminal enterprises that profit from the mark-up that they charge.

As hon. Members who have seen demonstrations will know, the pirated content is well presented and well organised. There is a menu at the front end. One can have a brilliant array of television programmes and feature films, including those that were released in theatres only a matter of days beforehand or, in some cases, have not been released. One can even apply skins to the menus to make it look like the content is coming through a program such as iPlayer or a company such as Sky, even though every bit of content is pirated.

We normally go about agitating for legislative change by publicising a problem and then discussing solutions, but for a long time, companies affected by this problem have been reluctant to do even that, because it simply provides more air time for the instructions about how to load such programs and free advertising for fully loaded devices. Unfortunately, such devices are so widely known that trying to damp down publicity is no longer an option. Sky reported that six months ago, 14% of the population had access to a device that could be used for pirated technology. That figure is now nearer 19%. Uptake is highest among 30 to 50-year-olds, a group who were previously less likely to access pirated material because of the more dodgy nature of online streaming sites and file-sharing programs. As of only a couple of weeks ago, there were more than 2,000 search results for pre-loaded devices on Amazon Marketplace.

I understand that Amazon has taken action to require pre-approval to sell such devices and, if that is the case, I am pleased to hear it. I guess that it decided to do that because pirated streaming affects its own legitimate streaming business. However, it is still incredibly easy to access such devices through other platforms, such as eBay and Facebook, and for users to load the software themselves. It does not take a genius to follow a guide and load all this stuff on to a box.

As the Minister is probably aware, there is no legislation that deals specifically with such devices and practices. Trading standards authorities and the police intellectual property crime unit have set out instances where they have been unable to prosecute due to a lack of specific legislation. There has been one criminal conviction for supply of IPTV boxes—that was late last year—but that relied on complex conspiracy-to-defraud legislation. We need to simplify the legislation and make it possible for PIPCU to tackle this problem more efficiently and directly.

As I understand it, when boxes are imported pre-loaded with piracy software, it is sometimes possible for customs agents to stop them because they have a criminal purpose. However, if boxes are imported without such software and then loaded by pirates in the UK and sold on to consumers, who often think they are buying a legitimate device, nothing can be done at the time of import. Although some products, such as the Amazon Fire stick, are created to comply with relevant consumer regulations, others are created with criminal intent and meant for piracy.

Several hon. Members met industry representatives, Sky in particular, yesterday to discuss this very problem. Those representatives brought an imported box and demonstrated the issue. They told us that they had brought a similar device to the House last week to test it in advance of their presentation. That device promptly began to emit a foul smell and smoke, and then sparked and exploded. I am sure that hon. Members appreciate that that was quite a dodgy bit of equipment, and that tells us entirely how shabby the entire piracy industry is. It is dominated by criminals who do unsavoury things with their proceeds and do not have a care in the world for consumers—much less for creators.

This issue has a huge impact on content creation. Some 19% of people have such boxes, and ownership is growing fast. Not receiving their just returns for their content has a huge impact on the creative industries’ ability to reinvest. Will the Minister therefore agree urgently to engage with PIPCU and British film and television content creators on legislative action to combat this problem? I understand that in the other place recently, the noble Baroness Buscombe, on behalf of the Government, said that she would consider tabling an amendment to the Digital Economy Bill on Third Reading that would grant the Government powers to introduce new regulations on this issue, if needed. I do not know what more evidence I can give than exploding piracy boxes, but such regulations clearly are needed. Whether or not those are introduced through the Digital Economy Bill, we should get around the table as soon as possible to discuss this urgent matter.

I understand from my discussions that creators are broadly satisfied with the state of copyright law, so I have been talking broadly about enforcement issues and those to do with new technology. I am sure that other Members will expand on other areas. The Design and Artists Copyright Society believes that the artist’s resale right is fit for purpose, and it is interested in seeing that keep functioning well for the visual arts sector. I understand there is concern from authors to see the UK maintain and implement EU proposals giving them more access to information about the sale of their work and protecting them against unfair “take it or leave it” contracts, which see authors lose out when a book suddenly becomes a bestseller.

I understand that music producers would also welcome the introduction of a right to information regarding remuneration from copyright so that they can properly audit their royalties. That is really important. However, I want to emphasise that although there may be some improvements to be made in this area, I am not entirely sure that we need a complete overhaul—we may hear more on that from other hon. Members. Trade bodies such as the Publishers Association and UK Music have said that they would be grateful for a Government commitment to the current copyright regime following our exit from the EU. I hope that the Minister will take the opportunity to give everyone such an assurance.

[Kevin Brennan (Cardiff West) (Lab)]

I will focus my remarks fairly narrowly on an area that the hon. Member for Selby and Ainsty (Nigel Adams) dealt with in his speech. I congratulate him not just on securing the debate but on his continuing efforts in this area. Although we sit on opposite sides of the House, we find ourselves agreeing more often than not on what needs to be done in relation to intellectual property.

The area I want to focus on is so-called IPTV devices. Hon. Members may well be aware that through such devices it is possible to access content, including television programmes, films and music, without paying for it. Such services are normally paid for in some way, shape or form, and ultimately the owners of the intellectual property receive some reward from such a payment. It is a serious matter when a technology emerges that enables consumers to access content without its creators being able to get a reward. Ultimately, that gives rewards to criminals, often located overseas, who effectively steal that content and enable people who do not always fully understand that what they are doing is illegal to consume it in the UK.

As the hon. Gentleman pointed out, use of these devices is growing like wildfire. I therefore say to the Minister that the time for inaction is over. The woods are burning out there. This is rapidly becoming a serious issue and, quite frankly, the Government’s response so far has been too slow. I feel justified in saying that because this issue was raised in the Committee that considered the Digital Economy Bill last year—many months ago—when we tabled amendments to encourage the Government to focus on it. In fairness, the Government are well aware of it, because they have referred to it and to the need to do something about it in reports. Why they produced a piece of legislation—it is currently in the House of Lords—entitled the Digital Economy Bill containing all sorts of measures that are perhaps peripheral to the digital economy without tackling this issue is a question that the Minister might care to answer.

When the Government were reminded of their own awareness that there was a serious issue with IPTV devices, and when amendments were tabled in Committee, they took no action, which is another mystery. When, further down the line, they have been reminded of that in the other place—the Bill has also been debated extensively in the House of Lords—all they have come up with so far, many months later, is a call for views. The call was issued recently by the Intellectual Property Office, located in Newport, next door to the constituency of my hon. Friend the Member for Newport East (Jessica Morden).

[Jessica Morden (Newport East) (Lab)]

The debate rightly focuses on the regulatory regime, and there are important points to be made about that, but can I put on record my appreciation of the staff at the Intellectual Property Office in Newport? They are a highly skilled, high-performing workforce, who are a big asset to the city. Does he agree that continuing to invest in developing the office and those staff is important, given the challenges highlighted earlier by the hon. Member for Selby and Ainsty (Nigel Adams)?

[Kevin Brennan]

Yes, my hon. Friend makes a good point. She is right to praise the workforce at the Intellectual Property Office and she is also right to point out that continuing investment in their work is extremely important. I have been concerned for many years about a culture in Government; I do not point the finger simply at the current Government, because it has existed for quite a long period of time, particularly in the old Department of Trade and Industry but also in the Department for Business, Innovation and Skills, in which I was a Minister for a short period. It is a culture that is rightly suspicious of regulation of business but too cautious about taking steps to regulate when to do so would be good for business. This is one instance in which it is quite clear that good regulation is good for business and good for a business and industry that is hugely important to this country.

It is welcome that the Government have gone from a position of denying that we need an industrial strategy, which was the ludicrous position before the current Prime Minister took over, to including the words “industrial strategy” in the title of the Department that the Minister represents, and even including the creative industries as part of our industrial strategy. There is recognition of the importance but not of the urgency of the action required.

[Nigel Adams]

Does the hon. Gentleman agree that the speed of uptake of IPTV devices is quite breathtaking? As he will know, a user can watch effectively any channel from more or less anywhere, including the public service broadcasters. What sort of a threat does he think that is to the PSBs?

[Kevin Brennan]

This is not just a problem with a few young guys who want to watch premier league football. Viewing content that has been illegally acquired is being normalised in households up and down the country, across the generations. The studies into that, which the hon. Gentleman mentioned in his speech, show that it is becoming an issue across the generations. People who would not have dreamed of going up to their bedroom with their laptop and illegally streaming something are, in the comfort of their living room, with other members of their family, across the generations, watching illegal content because the way in which it is presented makes it look like they are watching Sky or Virgin Media and because they can buy the devices through reputable online retailers. People think, “Well, if I can buy it there, how on earth can I be doing anything wrong?” Quite frankly, who could blame them for thinking that? That is the scale of the challenge that the Government need to get to grips with.

I read with great interest what the Government said in response to Lords amendments to the Digital Economy Bill that were similar to those I tabled and the House of Commons Committee discussed, which I withdrew at the behest of the Government so that they could go away and do some more work. Quite frankly, we have not moved very far. Yes, we have had the call for views—I have a copy of it here—but according to Baroness Buscombe, whom the hon. Gentleman mentioned in his remarks:

“The call for views runs for six weeks, until 5 April 2017, at which time the Government will assess the responses and determine the best course of action. … The Government fully understand the harm done by illegal set-top boxes and IPTV, which is why it is crucial that we have a robust evidence base for effectively tackling this problem.”—[Official Report, House of Lords, 22 February 2017; Vol. 779, c. 373.]

As the hon. Member for Selby and Ainsty pointed out, we already have a robust evidence base, and the Government acknowledged the problem some considerable time ago. It will be too late to do anything about it if the Government wait until the Bill passes through the House of Lords and returns to the House of Commons, with any amendments.

[Nigel Adams]

I am sure that the hon. Gentleman will agree that in other contexts the Government are rightly concerned about children getting access to pornography. Having seen yesterday’s demonstration and a previous one given by Sky, does he share my concern that on some of the platforms in question it is possible to access pornography alongside children’s television programmes? It seems to me that the Government should look at that area closely when they consider other measures on pornography in the Bill.

[Kevin Brennan]

There is no doubt that there are safeguarding issues, because material suitable for young children is presented on illegal set-top box platforms together with material that is suitable only for viewing by adults. Elsewhere in the Digital Economy Bill, as the hon. Gentleman will know, the Government are, with our support, creating powers to block sites that do not age-verify the sort of content that is restricted to adults. However, the platforms that we are considering are a lawless area—the wild west. The wild west is being imported into homes throughout the country. The problem is that it will become normalised to the extent that the Government will be too scared to do anything. They will be upsetting too many people, unless they act quickly; and that will damage our creative industries significantly. They are a serious, significant export earner. In this deeply regrettable era of Brexit, when we are trying to do individual trade deals around the world, it would be short-sighted for us to damage one of our most significant export earners.

Towards the end of the Lords debate on the Digital Economy Bill, the Minister indicated that the Government might be able to consider further changes to the Bill, at some point—the stages of a Bill in the House of Lords are different from ours. I understand that there is still an opportunity, under Lords procedure, for further changes to the Bill. My noble Friend Lord Stevenson of Balmacara pointed out at column 371 the danger that the Bill will run out of time in the Lords before the Government have an opportunity to consider what to do about the issue. Another legislative vehicle may not come along for some time. Bills of this kind are not like buses; they do not come along that often. My plea to the Minister is that he should talk to his DCMS colleagues about something that it is unusual for Opposition Members to suggest to the Government—whether it is time to take Henry VIII powers. Will he talk to Ministers about taking the present opportunity to pass the necessary measures to stop something that will seriously damage the creative sector?

[Mike Gapes (in the Chair)]

Order. I hope to call the Front-Bench speakers just before half-past 10, so that there will be sufficient time for the winding-up speeches.

--- Later in debate ---

[Joseph Johnson]

We certainly want trading standards to perform the function that we need it to perform, and we believe that the resources are in place to enable it to do so.

As I was saying, the UK boasts one of the most effective and innovative IP enforcement networks in the world, but we cannot afford to rest on our laurels. There are always new challenges to address. My hon. Friend the Member for Selby and Ainsty and the hon. Members for Cardiff West (Kevin Brennan), for North Antrim, and for Perth and North Perthshire (Pete Wishart) were right to recognise the serious challenge that illicit TV streaming and IPTV boxes pose to our creative industries. We will vigorously combat the normalisation, as the hon. Member for Cardiff West put it, of that harmful activity. It is theft. Last Thursday, the Government published a call for views, as Members have mentioned, to determine whether the existing legislation is working to tackle this important issue. It would not be appropriate to pre-empt the outcome of the call for views, but if the case is made that legislative change is required, the Government will take the necessary steps.

[Kevin Brennan]

I again urge the Minister to consider trying to do something about this issue in the Digital Economy Bill before it completes its stages in the House of Lords.