Lord Borrie
Main Page: Lord Borrie (Labour - Life peer)Intellectual Property Bill [HL]
Lord Borrie Excerpts
Lord Borrie
My Lords, I am delighted that the noble Lord, Lord Clement-Jones, indicated that he supports most of the proposed amendments to this clause, and that the Minister looks kindly upon them. I take the same view but I want to discuss the amendment proposed by my noble friend Lord Howarth of Newport more fully because this is the only place in the Bill so far where we have discussed the question of balance between the interests of the owner of intellectual property and those of the wider society, as he put it. This is the third day in Committee but, right from the start of our proceedings on the Bill, the rights and values of the creative industry relating to patents, designs and copyright have not been balanced with the wider interests of society. The various things that my noble friend and, indeed, the noble Lord, Lord Clement-Jones, mentioned, including the interests of society in there being more general competition and an absence of restrictive attitudes towards intellectual property, have not been considered.
One of the most vital matters, it seems—a whole area that is not being considered—is the length of time for which intellectual property rights should last. The Government have not felt it necessary—indeed, in the wording of the Bill it is not necessary—to explain why UK-registered design rights can last up to 25 years, that an unregistered design right can last up to 15 years and that a registered community design right can last for 25 years; I am relying on a government briefing paper that I have in front of me. Surely each of those things ought to be justified if one is looking at intellectual property and the way in which it fits into our desire for a prosperous Britain and creative industry, while being concerned that others who may want to be rivals in producing similar designs or objects should be considered as well—in the interests of the consumer and of the future, not just in the narrower interests which have prevailed under these years of monopoly which I have just mentioned.
My noble friend’s amendment is clear. He gave full examples of the way in which the balance would work out. It is a vital part of the Bill, if it is to generously notice that there are things other than those with which the Bill deals.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, before I begin I thank noble Lords for their engagement on the new reporting duty. This has given me an opportunity to clarify the Government’s intentions for this report. Noble Lords will, I trust, excuse a relatively long response, but many important issues have been raised during the course of this debate. I also hope that my noble friend Lord Jenkin is able to stay to hear my full response and that—how shall I put it?—a different sense of energy does not intervene. Many questions have been raised, and I will attempt to answer them all at the end.
Amendments 25F, 26, 26ZA, 26A, 26B, 26C, 27, 28 and 28ZA seek to broaden the scope of the proposed annual report and detail what the contents of the report should contain. I will address the amendments in turn. Amendments 25F, 26ZA, 26B and 26C, in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, would require the scope of the report to include an assessment of the impact of the Intellectual Property Office’s activities on job creation, in addition to their impact on innovation and growth. A direct relationship between intellectual property and job creation is practically impossible to draw. There are many different factors that will influence whether a business creates jobs. However, where there is evidence to suggest that the IPO’s activities may have had an impact on job creation, the report will indeed state this. Amendment 26C raises other questions to which I shall return later in my reply.
Amendment 26 tabled by my noble friends Lord Jenkin of Roding and Lord Clement-Jones, and to which the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, have added their names, would restrict the focus of the report to innovation and growth arising from the creation and exploitation of intellectual property. This point was raised during the Government’s consultation. In response, the Government said:
“The report will cover IPO activities which promote growth and innovation arising from the creation and exploitation of IP but the Government cannot restrict its focus to existing industries and business models. It needs to look at how the IP framework fits with technological change and the development of new business models. The report will therefore aim to present a fuller picture of the impact of the IPO’s activities on growth and innovation”.
I will explain what I mean by the expression “a fuller picture”. The report will also therefore contain an assessment of the Intellectual Property Office’s activities on growth and innovation arising from the use of intellectual property by third parties.
Let me give the Committee an example. Last year, the Government consulted on proposals to amend Section 60(5) of the Patents Act 1977 to provide an exception to patent infringement for activities involved in preparing or running clinical or field trials which use innovative drugs. This change would allow third parties to carry out a limited set of activities using another person’s patent-protected product in order to develop and assess the safety and efficacy of new pharmaceuticals. Responses to the consultation suggested that current UK legislation makes the UK a less attractive location to carry out this work compared with countries with broader exceptions. This may have economic implications for the pharmaceutical and clinical trials sectors, including loss of skills and expertise if trials are run abroad. The report will need to consider examples such as these where the use of intellectual property may help stimulate growth in the economy as a whole. I can assure noble Lords that in such cases it will indicate how the Intellectual Property Office has sought to balance the interests of rights holders and users.
Amendment 26A in the name of the noble Lord, Lord Howarth of Newport, seeks to include a requirement that the report should provide an assessment of how the Intellectual Property Office has,
“balanced the interests of rights holders with the wider interests of society”.
I am grateful that the noble Lord has defined this phrase to be not just UK-focused but global in scope. I entirely agree with what I believe is the principle behind the noble Lord’s amendment, that the wider interests of society are important in the context of IP rights. I can assure the noble Lord that the report will indicate where other policy objectives have been taken into account, alongside economic considerations—for example, where, say, freedom of speech, public health, or international development considerations have taken priority over economic ones. This is in line with the ethos of the report—transparency.
Amendment 26C, tabled by the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, seeks to place some requirements on the detailed contents of the report. Before responding directly, I should like to take the opportunity give the Committee some detail on what the report will contain. I will add that, as with all government agencies, the IPO already produces an annual report and accounts, containing an assessment of the development and performance of the organisation throughout the year, together with financial accounts. The IPO’s future plans are contained in the corporate plan published in spring each year and agreed with me as IP Minister on behalf of the Secretary of State. This plan also contains the targets that I set for the IPO and by which its performance is to be judged.
I have described the current reports and plans that the Intellectual Property Office produces. I turn now to the new reporting requirements that are the subject of this clause. I will set out the parameters of the report and give some examples to illustrate the kind of issues that would be included in it.
First, the report will provide information on legislative changes and any pre-legislative work such as consultations. Economic estimates will be taken from impact assessments. Looking back to the previous financial year, as an illustration, this would include the copyright measures in the Enterprise and Regulatory Reform Act and the designs consultation that has resulted in the measures that we have already debated in this Committee.
Secondly, the report will address the Intellectual Property Office’s activities in international negotiations and cross-border co-operation. An example is the work that is being done to deliver a unitary patent and unified patent court.
Thirdly, the report will discuss policy development work that has been undertaken to address the challenges facing the intellectual property system. These will change as time passes, but copyright licensing in the digital age is a good example of a current challenge that the IPO has been working on and which, therefore, the annual report would cover next year and for as long as it remains relevant.
Fourthly, the report will highlight the main outputs of the Intellectual Property Office’s economic research programme and how they relate to innovation and growth. Recent studies, for example, have examined the incentives provided by patents and the use of alternative methods of protecting innovation. The report will also summarise the findings of evaluation exercises. The first of these was published last month and concerns the Lambert toolkit, which contains model agreements and a framework for university and business collaborations. The toolkit was developed by a working group of interested parties, supported by the IPO. The research showed that the toolkit has had a positive influence on some innovative research partnerships between UK universities and businesses.
Lord Clement-Jones
My Lords, I rise to speak briefly in support of Amendment 28A. My noble friend Lord Jenkin eloquently set out the case for his amendment and there are very few points that I would wish to add. The case that consumers are being misled was strongly made out by a recent Which? report. As my noble friend said, it is clear that the CPRs—the consumer protection regulations—are ineffective because they are not enforced by the OFT and trading standards and there has been no review which would allow others to enforce those same regulations.
I have practised in the past as an intellectual property lawyer. Passing off is very difficult to establish in these cases but that is the basis on which you would normally expect to enforce ordinary civil actions against this kind of parasitic copying. All the evidence given to me by the British Brands Group suggests that it is extremely difficult to obtain the evidence required by the courts to show confusion, partly because consumers tend not to complain about low-priced items. It is very difficult to gather the evidence in store and courts often dismiss survey evidence as unreliable.
Another interesting feature, which the Minister might care to address, is whether or not the UK is upholding its obligations under the Paris Convention and TRIPS. Article 10bis of the Paris convention and Article 2 of TRIPS require signatories, which include the UK, to assure nationals of “effective protection” against unfair competition. Counsel has given opinion in the past that the UK is not compliant and I believe that the Gowers review gave some indication that that was the case as well. The Government have a case to answer on this question. It is a long-running sore among the owners of these brands and, as the noble Lord, Lord Jenkin, said, there is photograph after photograph of this type of parasitic copying. There is plenty of evidence that it takes place.
Lord Borrie
My Lords, the noble Lords, Lord Jenkin and Lord Clement-Jones, made a clear and convincing case for doing something about so-called lookalikes. I like the word “cheat”, which the noble Lord, Lord Jenkin, used, because it is a simple, human word, which does not rest on any statute. It is perfectly clear to people generally what cheating is. This is a form of cheating and I hope that something can be done about it.
I have seen the Which? report, which shows basic examples of lookalikes and the originals and shows how easy it is, when rushing around the supermarket, to pick up the wrong item when it looks exactly like the one you want to buy. That is very serious. The only question I have may be one for the Minister rather than the noble Lord, Lord Jenkin.
In the last session we passed a Bill establishing a grocery adjudicator. A lot of these problems arise with groceries, which are fairly widely defined in the Groceries Code Adjudicator Act. That Act provides a remedy for anti-competitive activity by supermarkets and other grocers in relation to the practices of suppliers of goods, groceries in particular. I was not very keen on the idea of a special adjudicator being set up and wondered why we could not use one of the existing bodies, such as the Office of Fair Trading, and give it a clear remit to deal with the problem. However, a special post was set up and the lady is now in office. She has a back office of some sort and deals with complaints from farmers and other suppliers against supermarkets which have done something anti-competitively. Why can one not use that particular office to deal with the problem that the noble Lord, Lord Jenkin, talked about?
Lord Howarth of Newport
My Lords, it grieves me to part company with my noble friend Lord Young of Norwood Green but I cannot agree with him on this matter. Of course, I agree with him that the Government and their appointees should back British business, but not to the exclusion of other interests and responsibilities. Of course, I agree that intellectual property should be championed, but I do not agree with him that it should be championed as much as possible.
In an earlier debate, we reviewed some of the unhappy consequences that followed the decision to allow patenting of the human genome. If a new public functionary called the director-general of intellectual property rights is to be created, it seems to me that that official, acting and speaking in a public capacity created by the Government, ought to maintain a balance in his approach to the whole question of intellectual property rights. He should champion the creation of new intellectual property rights where it is appropriate but he should also recognise where the limitations ought to be and where the public interest needs to be balanced.
I shall certainly not weary the Committee by repeating the arguments that I deployed in our earlier discussion about what should be covered in the annual report, but many of the arguments that I suggested should apply there also apply to this proposal. In any case, I think it is unnecessary to create such an appointment. It seems to me that the chief executive of the Intellectual Property Office himself ought to take this wide and balanced view. If his remit from the business department is narrower than that, none the less, the noble Viscount, in his capacity as Intellectual Property Minister, speaking and acting collectively on behalf of the Government as a whole, ought always to have regard to that wider range of interests and a balanced approach to policy.
Lord Borrie
My Lords, I want to intervene in a small way. I had a certain nostalgic feeling when reference was made to setting up a director-general of intellectual property because I was once the director-general of fair trading for some 16 years and I enjoyed that. I enjoyed the fact that the legislation that applied to me directed everything in a sort of pyramid set-up, whereby I was at the top of the pyramid and everybody else was down below. That was rather enjoyable, but surely my noble friends who have put forward this amendment must realise that it is terribly dated now. In the 1970s and 1980s, as each old-fashioned nationalised industry became privatised, a director-general was set up—for example, of Ofgas, Offer or Ofcom. They were all set up as sort of clones of the director-general of fair trading with specialised functions. However, roughly from the 1990s, into this century, all these offices have been remodelled on what I might call more private enterprise bases, whereby there is a board, a chairman and a chief executive. The same person can no longer be both chairman and chief executive in either private enterprise or the public sector.
Bodies that have been set up in recent years to do a job of this sort, to act as offices to receive public concerns and complaints and to bring forward policy, have been set up in the more modern way. If I may put it in simple terms, previously there has been an “Office of” something or other. Now there is the Financial Services Authority—or, rather, the Financial Conduct Authority—and the new competition body is not called the Office of Fair Trading or “Office of Competition” but the Competition and Markets Authority. It has a board, a chairman and chief executive. I am simply saying to my noble friends that I am not sure that I care for this amendment anyway, for the reasons given by my noble friend Lord Howarth, but it is technically not an up-to-date way of doing it.
Viscount Younger of Leckie
My Lords, Amendment 28AA would create a new statutory role of “Director General of Intellectual Property Rights”, with a duty to promote intellectual property rights. A very similar amendment to the Enterprise and Regulatory Reform Bill was proposed by my noble friends Lord Jenkin, Lord Clement-Jones and Lady Buscombe, who is not in her place today.
The functions of this new role are already being carried out. As Minister for Intellectual Property, I have a role to champion the IP system as a whole. That includes the vital role of not only protecting the interests of IP rights owners but considering the different interests of future businesses, consumers and other users and creators of IP. A balanced IP system promotes strong and competitive markets, and encourages innovation and creativity.
My role as IP Minister is to create and sustain the best possible balance. I am supported in this role by the IPO, whose objectives I set through its annual corporate plan. The IPO is responsible for promoting innovation by providing a clear, accessible and widely understood IP system that enables the economy and society to benefit from knowledge and ideas.
In particular, I am supported by the chief executive of the Intellectual Property Office, who is a director-general within the Civil Service. The chief executive is appointed by the Secretary of State. He or she is directly accountable to the Secretary of State, to me as the responsible Minister and to the Permanent Secretary as the principal accounting officer. The chief executive is responsible for the administration of the relevant statutes, in this case the Patents Act 1977, the Copyright, Designs and Patents Act 1988, the Trade Marks Act 1994 and associated legislation. He or she also advises the Secretary of State on all aspects of national intellectual property, related EU and international legislation and on relevant policy issues. It seems to me that these are precisely the tasks that one would expect a director-general of IP to perform, and we have a director-general doing them.
We have heard the suggestion that a director-general for IP owners is needed to convince holders of IP rights that the Government are supportive of their interests. The Government have already introduced or supported a wide range of beneficial measures, from enhanced R&D tax credits and incentives for animation to longer copyright for music performances, and from easier access to justice through the courts to encouraging a new IP crime unit in the City of London Police to tackle online IP crime. It is clear that we have done much for IP-intensive industries, as my noble friend Lord Clement-Jones acknowledged in the Grand Committee on the ERR Bill. I appreciate his general support today—when compared, perhaps, with his views during the passage of the ERR Bill—and I am grateful.
The need for balance in IP policy has been recognised for many years. For example, when the current Copyright, Designs and Patents Bill was debated in the other place in 1988, the former honourable Member for Sedgefield, Tony Blair, said the following:
“The difficult balance that we have to strike … is between ensuring that industry has a proper incentive to invest and recognising that the consumer must be protected against the lack of competition that will inevitably come from copyright protection. If we protect industry too much the consumer will suffer through the abuse of monopoly, and if we give too little protection to industry it will lose the incentive to invest. Our task is not to choose between the interests of industry and the consumer but adequately to balance those interests”.—[Official Report, Commons, 25/7/88; col. 38.]
I am most grateful to the noble Lord, Lord Howarth, for clarifying that point earlier in this debate.
The duties of the proposed director-general are significant in what they do not include. There is no duty to consider the impact on consumers, other businesses or the advance of research. He or she need not have regard to the benefits of competition, and the development of high-quality evidence does not appear to have been given priority. These are not optional extras but important considerations in their own right. Although the Government understand the intention behind the amendment, we do not believe that this additional role is necessary. In addition, I am not fully convinced that a role that does not acknowledge the balance of interests necessary to good intellectual property policy would benefit creators, rights owners or the UK.
The noble Lord, Lord Young, raised some important points, some of which I may have addressed earlier. He suggested that the IPO is efficient at registering but does not champion IP rights. As I mentioned earlier, the Intellectual Property Office is under my control as Minister for IP. I do not know about my transition from Ivan the Terrible to Peter the Great but reiterate that I am a proud Intellectual Property Minister. However, importantly, I do not agree that it is my role to champion current IP rights holders over future ones or to have one set over another.
The noble Lord, Lord Young, questioned what the IPO has done to support rights holders and IP businesses. As I mentioned earlier, the IPO is taking a wide range of actions to help business. I refer noble Lords to my lengthy letter last week, which set out some of these activities on business support and enforcement. I have here—which I can wave, Chamberlain-style—a copy of the IPO achievements for 2012-13. Noble Lords are most welcome to read it.
The noble Lord, Lord Young, asked if intellectual property should be embedded in considerations across departments in Whitehall. Having the IPO as the centre of IP expertise and policy in government, to which departments can turn, helps to facilitate this. Furthermore, IPO policy officials actively reach out to other departments—DCMS and the Ministry of Justice, to name but two—on cross-cutting intellectual property issues. This system works for a wide range of policy areas and is the norm.
My noble friend Lord Clement-Jones said that the Government and the IPO must show that they have the interests of intellectual property holders at heart. He is right. The Government have done much, including extending the copyright term in music performances and the tax incentives for research and development in animation, which I mentioned earlier.
The noble Lord, Lord Howarth, said that the Government should not be championing intellectual property rights to the detriment of others; in other words, he was focusing on the public interest balance. Again, this is absolutely right. The IPO acts in the public interest, running the IP system in order to maximise innovation and creativity in the widest possible sense.
I hope that on the basis of the information I have provided, specifying in some depth the role of the chief executive of the IPO, as well as my own passion for the role as IP Minister, the noble Lord will withdraw his amendment.