Lord Clement-Jones
Main Page: Lord Clement-Jones (Liberal Democrat - Life peer)Intellectual Property Bill [HL]
Lord Clement-Jones Excerpts
Lord Clement-Jones
My Lords, I am sure that the noble Lord, Lord Stevenson, was only trying to be helpful with his first amendments but, from the word go, he has a certain way of frightening the horses. The reaction to his amendment by the design community, perhaps apart from the seven professors who lurk in the background to these and similar amendments tabled by the noble Lord—I am glad to say that we firmly rejected their wise advice on the Enterprise and Regulatory Reform Bill—is that this is a last-minute change to emasculate unregistered design right, which is relied upon by almost every designer, as opposed to registered design. The noble Lord knows the scale of the use of unregistered design rights; more than 100,000 designs annually are protected by them, whereas only some 4,000 are protected by registered design. The whole purpose of unregistered design is to be analogous to copyright. That is what UK unregistered design right is about. It is very long established. The term for unregistered design rights is of course much shorter than for copyright, which was always the intention. However, the noble Lord’s amendment is extremely radical. I am sure that he does not really believe that this is the right way forward. I heard what he said about the Government's approach being merely piecemeal, but this is utterly fundamental at this stage.
I hope that the amendment is purely provocative and designed to have a debate but the noble Lord should know that many individual designers up and down the country would be absolutely horrified if the amendment passed and if unregistered design right did not have the scope that it now has. I will not go into the way in which the test is put forward in terms of whether it is world wide or original and what sort of protections are given. It is sufficient to say that in almost every respect small independent designers would be disadvantaged by the amendment.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, at the outset of Committee, it may be helpful to remind everyone why the Bill is important. The measures in the Bill support business in driving economic growth and innovation by encouraging enterprise and expanding the range of economic sectors in the UK. Absurd maze or not, the designs and patents measures in the Bill will deliver many of the remaining commitments from the government response to the Hargreaves review of intellectual property and growth, which the Prime Minister commissioned in 2010.
The Bill will achieve three things. First, it will make it easier for business to understand what is protected under design and patent law, providing greater certainty for investors and reducing costs for business. Secondly, it will strengthen IP protection, including through the introduction of criminal penalties for copying UK registered designs. Thirdly, it will make the international and European IP system work better, helping UK business to be successful abroad. These measures will help our vitally important IP-intensive businesses and I look forward to the chance to debate the detail over the course of this Committee. I appreciate the sentiments expressed by the noble Lord, Lord Stevenson, and I look forward to continuing to engage with him and all other noble Lords on the substantive and other issues raised during our consideration of the Bill.
Amendment 1 would change the legal definition of the UK unregistered design right to mirror that of the EU Community design, as set out in the Community design regulation. The result would be harmonisation with the European design right. Although I accept that the measure would simplify the design legal regime in the UK, the change would not be welcomed by the UK design industry. I am most grateful for the support given by my noble friend Lord Clement-Jones on that.
There was almost complete support for the retention of the UK unregistered design right, in its current form, in response to the Government’s consultation. In particular, this was due to its application to some functional designs, for which the UK design right is unique. The result of this amendment, changing all elements of the current definition of the UK design unregistered right apart from its duration, would be unpopular with many parts of the design industry, because many of its designs would lose their protection.
Amendment 7 would harmonise the conditions of UK unregistered design infringement with EU law, as set out in the European directive and regulation. These are also the same conditions that apply to the UK registered design. This would be a fundamental and significant change to the application of unregistered design law in the UK. Since its introduction in 1988, a considerable body of case law has built up relating to the infringement of unregistered designs, one of the leading cases being PepsiCo v Grupo. Businesses and the legal profession have also spent a considerable amount of time in building a clear understanding of this case law.
More fundamentally, the Government are concerned about the effect that the change would have in altering the way in which infringement of the UK unregistered design is determined before the courts. The current test has been interpreted narrowly in a number of leading cases. This is in contrast to the test applied in EU law, which is potentially wider in scope. It would be troubling indeed if the change meant that existing designs were suddenly subject to infringement actions from which they were previously free. Furthermore, while the wider scope of the EU unregistered right may be justified given that it has a lifespan of only three years, the Government consider that it would be inappropriate for a right that lasts up to 15 years, as is the case with the UK unregistered design right, to enjoy wider protection. There would be serious concerns about the effect of this on innovation.
The noble Lord, Lord Stevenson, asked what the Government are doing generally to align EU and UK rights. The Government are seeking, through this Bill, to align design rights wherever possible—for example, through the changes proposed to amend the rules on commissioning and defences to infringement as a general clause. The noble Lord also raised some general points on the Government’s proposals in the Bill and their decision not to go for wholesale reform. We listened carefully to stakeholders, who told us that there was value in both the formal registered right and the less formal unregistered right, which enable certain businesses that work in fast-moving fields, such as the fashion industry, to enjoy the right protection for them. On the basis of the arguments presented, I ask the noble Lord to withdraw his amendment.
Lord Stevenson of Balmacara
My Lords, with his usual incisiveness, the noble Lord, Lord Clement-Jones, immediately spotted what I was up to. Far from frightening the horses, which is not in my nature—it may be the first time that that appellation has ever been suggested, as it is usually the other way around, with me running away from the horses—my point was to try to get up a debate about some of the underlying themes. We have just had that, so there has been success.
I would cavil at only a couple of the points made in the initial response. I did not entirely rely on professors, wonderful though they are in supplying us with information. I quoted extensively from the Bench. I would not want in any sense to choose between the two contributions, but I think that their sum was rather powerful. I simply lay that on the table.
The noble Lord, Lord Clement-Jones, ended on an interesting point, which is that it is true that, when analysed back, the unregistered design right is in essence copyright by another name. However, it provides in the design production capacity the same sort of protections that we were debating on the ERR Bill in relation to 3-D objects, which the Government have taken powers to turn away from. I think that, under that design regime, copying more than 50 of an artistic design that was turned into a 3-D object and manufactured gave protection for 25 years. I might be getting mixed up between the rights. Yet that 25-year period has been replaced by the life of the designer plus 70 years. One could ask, but one would immediately run up against the points made by my noble friend Lord Howarth, why they have chosen to retain the design approach—a limited period of five years then five years, plus a further five—for unregistered designs and not taken what might be the logical step of saying, “If it is copyright by another name, why did we not move that way for the whole of this area?”.
Lord Clement-Jones
Perhaps I can help the noble Lord. Your Lordships may remember that the Section 52 debate during consideration of the ERR Bill was about works of artistic craftsmanship. There is a difference between the generality of design rights and those particular works covered by the items that the noble Lord is discussing.
Lord Clement-Jones
I need to declare an interest as a member of the Law Society and of the City of London Law Society, because the noble Lord, Lord Young, is probing a very interesting point here. The Law Society itself, as well as the City of London Law Society, makes a rather similar point. Noble Lords may be glad to hear it in a slightly shorter form. I shall read it out.
“The society remains concerned that the proposed amendment puts UK businesses at a competitive disadvantage since it will require the UK to provide protection to entities based in overseas jurisdictions even when those jurisdictions do not offer reciprocal protection to UK entities”.
The society suggests that this is remedied in the Bill. There are similar points there. Obviously, the noble Lord, Lord Young, went into much more detail, but that is the underlying concern in all of this.
Viscount Younger of Leckie
My Lords, Amendments 2 and 5 address various points in relation to the qualification criteria in the Bill. I will first turn to Amendment 2, which would change the definition of qualifying country in relation to the meaning of “original” in Section 213(4) of the Copyright, Designs and Patents Act 1988.
The amendment would change the definition to the United Kingdom and European Economic Area. In practice, that will mean adding Iceland, Liechtenstein and Norway to what is currently proposed and removing a number of countries—I hope that noble Lords will bear with me and not succumb to slumber as I read the whole list. Those that would be removed are: Anguilla, Bermuda, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Channel Islands, Falkland Islands, Gibraltar, Hong Kong, Isle of Man, Montserrat, New Zealand, the Pitcairn Islands, Henderson, Ducie and Oeno Islands, St Helena and Dependencies, South Georgia and the South Sandwich Islands and the Turks and the Caicos Islands.
The amendment would mean that the geographical areas used in the definition of “commonplace”, which is under debate here, and “qualifying country”, which is in Section 217(3) of the Copyright, Designs and Patents Act 1988, would be different. This would create an anomaly in the Act and a level of complexity, which the Bill, on principle, is trying to remove.
I would like to pick up on some points that the noble Lord, Lord Young of Norwood Green, made because he asked for and deserves a more substantive answer on the reasoning behind the decisions that we made. Aligning the geographical coverage and qualification is a logical harmonisation. Legal rights should be subject to the same eligibility tests wherever they arise. Otherwise, examples of unfairness would occur. It will make it easier for a person to know whether they qualify for an unregistered design right and it will help to resolve disputes more quickly. It will be easier for businesses and users to understand how they can qualify for an unregistered design right.
Furthermore, I want to explain why the Government were consulting on changing the definition of “commonplace”, as in Clause 1, to cover the whole of the EEA, even though the Bill is only amending coverage in the EU. Following the consultation and on further reflection, the Government came to the conclusion that an additional layer of complexity to the law would be created in the eligibility criteria for design right if the geographical areas were different for the definition of “qualifying country” and for “commonplace” to which the noble Lord alluded.
Similarly, Amendment 5 would introduce a new definition. It proposes a change to the requirements for businesses that qualify for unregistered design right, specifying that the business must have,
“a real and effective industrial or commercial establishment”,
in any qualifying country.
The current definition of a business that qualifies for the UK unregistered design right includes the requirement that it must carry on a,
“‘substantial business activity’” in a qualifying country”.
The term “substantial business activity” is already used elsewhere in the Act—for example, for qualification criteria for copyright performances in Section 206. The term is not defined in the Act, but does not appear to have been the subject of significant case law, which suggests that the term has not caused problems in practice.
Although the wording suggested in Amendment 5 has its basis in EU law, the Government believe that to introduce this term into UK law could create confusion and uncertainty about the qualification criteria for unregistered design rights. The Bill is trying, where possible, to reduce complexity in the law. The Government believe that these amendments would lead to additional complexity, not reduce it.
The noble Lord, Lord Young of Norwood Green, asked whether there was a definition of “commonplace”. There is no statutory definition in terms of its meaning. However, the word “commonplace” has to be tested objectively in the design field in question. The case of Fulton v Totes puts a gloss on the meaning of the territorial extent of “commonplace”, suggesting that the UK market is relevant. Therefore, the Bill seeks to clarify the territorial scope of the definition of commonplace and align it with qualification requirements. I ask the noble Lord to withdraw his amendment.
Lord Clement-Jones
I make a brief intervention to give notice to the Minister that I intend to raise this at a future stage in the Bill. This matter came to my attention rather late in the day and I do not expect him to respond at this moment.
There is concern about the breadth of the definition in Clause 4, particularly proposed new Section 224A(b) with regard to,
“an act which is done for experimental purposes”.
The corresponding section in the Patents Act 1977 provides further clarification of what,
“done for experimental purposes”,
means. It relates to the subject matter of the invention. Proposed new Section 244A(c)(ii) should also clarify what “mention” and “source” mean.
A better proposal might be,
“the owner of the design right is identified during the teaching or as part of the citation as the case may be”.
It should be up to the person relying on his defence to prove that the owner of the design right was probably identified.
Unless the Minister writes to me in the mean time, I will probably raise these issues on Report. Again, I am indebted to the Law Society and I declare an interest.
Lord Young of Norwood Green
My Lords, in moving Amendment 10, I shall refer to Amendments 12 and 19 as well. Amendment 10 is quite simple. We would leave out subsection (3), which gives a Henry VIII power to the Secretary of State to amend the Act by order. Amendment 12 would implement the Delegated Powers Committee recommendation but goes slightly wider by requiring all orders under Clause 8 to be subject to affirmative procedure. Amendment 19 would also implement the Delegated Powers Committee recommendation, but it goes further by requiring all statutory instruments to be subject to the affirmative procedure. This was referred to in the recent report from the committee.
These amendments were laid before we had sight of that DPRR committee report, but the committee has drawn our attention to the Henry VIII powers contained in this Bill and, as good democrats, we should be careful of approving such powers without good reason. Indeed, the committee went a little further, saying that it would,
“expect to see some justification for the negative procedure”,
that the Government are proposing.
The committee is sceptical of the case put forward by the Government, saying that it detects,
“some inconsistency of approach between what is said in paragraph 8 of the memorandum and the explanations given in paragraphs 25 and 35 about the choice of … powers”.
It would be good to hear the Minister clear up that ambiguity.
The rest of the group, which we share with the noble Lord, Lord Clement-Jones, reflects the recommendation of the Delegated Powers Committee and proposes its solution to the issue, which is that it considers the case for negative procedure has not been made for orders under proposed new Section 15ZA, and that the affirmative procedure should apply instead. I look forward to the comments to be made by the noble Lord, Lord Clement-Jones, and beg to move.
Lord Clement-Jones
My Lords, the noble Lord, Lord Young, has encapsulated the argument pretty well. It merely takes a reading of the report from the Delegated Powers and Regulatory Reform Committee to see that, although on slightly different bases and for rather different reasons, it is not happy at all with negative procedure for either Clause 8 or Clause 11. In addition to the amendments tabled between us, I have some sympathy with Amendment 10 as well. I very much hope that the Minister will be able to give either convincing reasons for continuing with the negative procedure or will accept the fact that the committee has delivered a pretty strong opinion, particularly in terms of being able to amend primary legislation, and that therefore he will accept or put forward his own amendments to change it to the affirmative procedure in the case of both clauses. Simply reading the committee’s report is pretty persuasive by itself.
Lord Howarth of Newport
When the Minister comes to reply in a second, will he give the Committee some indication of the volume of order-making that he anticipates? If these orders are to be subject to the affirmative procedure, will we be meeting every Tuesday and Thursday afternoon?
Lord Clement-Jones
My Lords, it may seem somewhat of an anticlimax to come to these two amendments after visions of tsars and Alexander Nevsky crossing the ice, and so on. However, Amendment 15 is rather elegant, and I support it in principle. My friends at the Law Society would certainly find it an elegant solution. They say, under Clause 9(1), that the assignment of an unregistered right—very much as the noble Lord, Lord Stevenson, put it—
“need not follow the corresponding registered right (as is currently the case). The Bill should clarify whether the unregistered right is assigned to the same party, at registration of the assignment of the registered right. This will mean that under the new regime businesses can check whether an unregistered right has also been assigned to the same owner as the registered right, or whether they need to be aware of an unregistered right lying elsewhere”.
Amendment 15 achieves that aim. It is an extremely useful instrument, which would mean that there would be no doubt in future as to where the respective rights lie. It would be a source of some confusion if that was not known. This is a very interesting solution to something that will otherwise cause problems in future.
Lord Borrie
It seems slightly strange, to put this to my noble friend, that legislation which may have been in existence for many years specifies a particular form and what it should contain. That does not seem very appropriate.
Lord Stevenson of Balmacara
My Lords, this concerns a relatively minor point and it is certainly a probing amendment, to which I am sure the Minister will have no difficulty in making a response.
When reading the consultation process, we were intrigued to discover that the Government had consulted widely on whether appeal routes could be considered within existing systems largely through the patents county court or whether there was some value in transferring appeals to the High Court. This amendment is intended to probe that decision and to ask the Minister to respond a little more on it.
With the welcome news that a small but important part of the unified patent court will, it is hoped, be located in the United Kingdom and perhaps in more than one location, it would be to the public benefit if those who practised at this Bar or who were judges in the Bar were able to gain the maximum exposure to the issues that are likely to arise during consideration of the various points that will be routed through this legal process. My first point is simply a general feeling that more expertise should be spread around and that more people should be engaged, and that therefore cutting out the patents county court seems a rather odd decision.
Secondly, there is also a need to raise more public understanding on this matter. When court cases that involve these issues are picked up, they sometimes, as we discussed in relation to an earlier amendment, catch the public eye. That can sometimes help to get people interested in this whole area and stimulate them to become more involved. That is another reason for tabling the amendment.
Thirdly, we heard in earlier discussions, and when we were discussing this matter with the Minister, that the Bar is currently quite small and the court’s activities quite narrow. Therefore, the more court cases in which it is involved will gradually make this more of a sustainable option.
All those things suggest that perhaps ruling out, de facto, the available route for taking appeals through to the PCC system is a little short-sighted. We may not have the correct process or procedure here—we are not legal experts in this department—but we wonder whether there is an issue here that might need further consideration. I beg to move.
Lord Clement-Jones
My Lords, the amendment put forward by the noble Lord, Lord Stevenson, is of considerable interest. The very welcome aim and objective of Clause 10 is clearly to provide the most cost-effective and quick alternative for appealing against a registrar’s opinion and for distinguishing between matters of law and fact and so on. It is very interesting to suggest that it is the patents county court that would specifically deal with that, because that would meet the need for a point of law to be referred to the court in a cost-effective way. Rather like the noble Lord, Lord Stevenson, I do not know what the practicality of that is, but I certainly hope that the Minister will explore the suggestion because it seems to be consistent with the aims of the rest of Clause 10.
It is certainly interesting that Clause 10 has been constructed, as I understand it, very much in the way that current trade marks appeals against the registrar’s decisions are made, and that seems to commend it. What I do not know is whether the trade marks legislation refers to the High Court or whether there is some other route for a legal point to be determined on appeal in trade mark cases.