Music Licensing

Lord Clement-Jones Excerpts

Thursday 13th June 2019 Lords Chamber

[Lord Henley]

My Lords, it is not for me to comment on the pay of the CEO of PPL; this must be a matter for the members of that organisation. However, I think all agree it is important that PPL, and PRS for that matter, get the best deal for all its members—performers, composers and others who own a copyright—and make sure they get the appropriate amount of money they are owed for us hearing their music.

[Lord Clement-Jones (LD)]

My Lords, does the Minister agree that there is a major danger of misunderstanding what is proposed and what is involved here? The new tariff does not apply to grass-roots live music venues. It is designed to be fairer to small venues using recorded music. It will be phased in for other places and the beneficiaries will be many currently underpaid performers and artists.

[Lord Henley]

My Lords, the noble Lord makes a very useful contribution. I stress that this is about ensuring that those artists, performers and others receive the appropriate reward for their work.

Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2018

Lord Clement-Jones Excerpts

Monday 4th March 2019 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted that this statutory instrument is being considered as an affirmative one, which is probably all my fault as I wrote to the relevant committee on 1 November setting out my interest in the subject and why I believed that it should be discussed. My interest dates back to having been an MEP and MP, and I spent time as a stagiaire in DG IV—as it then was—of the EU Commission, although I was concerned more with anti-trust at that time than intellectual property.

I would like to press the Minister on three separate issues, although he will be pleased to know that I am not against the statutory instrument in any shape or form. We are obviously helped by the findings of the two committees, for which I think that this Committee will be grateful. The report of the Secondary Legislation Scrutiny Committee mentions, as one reason why it was critical and thought that the House would benefit from such discussion, the assessment of the impact of the loss of the reciprocities. The Minister referred to that. As UK consumers while in another member state, we were going to lose the right to benefit from Netflix—if we only knew how to do it, of course—but visitors from another member state to this country would continue to benefit.

I understand the conclusion that the Government have drawn. However, given the extensive range of copyright issues covered in this instrument and that it seeks to establish reciprocity in relation to the loss of free access to portable online content services for consumers, how did the department reach that decision without having made an assessment of the impact of that loss on UK consumers?

We have heard from the Minister this afternoon that there has been a broad and general paper, from which I am sure that we will all benefit, but what was the basis for reaching the decision? Has he had any discussions with Ministers of other member states to see whether, having given up reciprocity, there is any way we might revert to it in future when we are negotiating a deal? Is that lost for ever, or is it only in the context of the no-deal statutory instrument before us today?

How wide an impact assessment has the department done in preparing for this statutory instrument? Do we know either how many UK-based broadcasters will be affected, how the loss of portability of online content may impact on UK consumers or how much the facility has been used in the past? From my experience, if you are visiting Brussels in the capacity of an MEP or as a lawyer, I frankly do not think that you would have much time to watch Netflix—I see that the shadow Minister disagrees. However, if you are there on holiday, it would obviously have a greater impact. The conclusion reached by the Secondary Legislation Scrutiny Committee Sub-Committee B is that it would have been helpful to provide more information, if the department has it, on the potential impact of EU exit on both UK businesses and consumers in this area.

We are apparently seeking to preserve the UK’s compliance with the requirements of the Marrakesh treaty—where these treaties are drafted and signed seems ever more exotic. I understand that we are seeking to ratify the treaty in our own right. Does my noble friend have a proposed timetable for that? We have learnt from other departments that ratifications of treaties and deals are not quite as straightforward as we might believe. I should be grateful for a response to those questions as well as to my overall question as to whether we are seeking reciprocity in the long term through a deal.

[Lord Clement-Jones (LD)]

My Lords, the noble Baroness, Lady McIntosh, has asked some very pertinent questions which I certainly want to reinforce, and I look forward to what the Minister has to say in response. This is a deceptively short SI, but it deals with a rather large number of important rights, both for business and for the consumer. Even though I agree with the committee that it would have been helpful to provide more information on the potential impact of EU exit on UK businesses and consumers in these areas, at least the impact assessment set out the general impact in broad terms. The Minister used the word “unavoidable”. Sadly, I do not think that there are any alternative solutions to the issues set out in the statutory instrument.

What does the Minister consider to be the actual impact? As with all the SI impact statements, the assessment for this one says that, pretty much, the only impacts are a result not of the SI but of leaving the EU, becoming a third country and so on. However, there are substantial impacts as a result of consumers not having such rights and broadcast businesses not having the rights under the cable and satellite directive. Indeed, business has a double whammy because, as was discussed on 6 February, under the AVMS directive—as my noble friend Lord Foster pointed out, it deals not so much with copyright as with regulation—broadcasters will have a real problem in terms of the country of origin and regulation. So it is not just copyright and clearance issues that will add to the burden of cost; it is the certainty of regulation. It is no wonder that, already, a large number of broadcasters that broadcast into the European Union and have relied on the country-of-origin principle are upping sticks and moving to places such as Amsterdam.

At least for the AVMS directive there is some consolation in the Council of Europe regulations, but for a more limited range of material. Unless the Minister can correct me, I do not believe that there are any consolations on copyright clearance for broadcasters. This really is damaging.

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[Lord McNicol of West Kilbride (Lab)]

My Lords, I thank the Minister for his introduction. We broadly accept the position of the department. However, as the noble Baroness, Lady McIntosh, and the noble Lord, Lord Clement-Jones, have touched on, a number of issues are staring at us, both in the impact assessment and in the SI itself. I will not go through all these, because most of the main points have been picked up. However, the Minister touched on the issue of no deal and the problems associated with it. Obviously, if we were to rule out a no-deal scenario, many of the issues would be dealt with and we would not be having these conversations.

Following on from the final point of the noble Lord, Lord Clement-Jones, he will find that the answers are not within the impact assessment, especially on cost and finances. Page 2 of the first two of the three impact assessments, under the heading “Full Economic Assessment”, looks at both the costs and the benefits. In both, the first line states:

“It has not been possible to monetise the costs due to a lack of available data”.


Unfortunately, I do not think there will be detailed answers on the costs, whether to the consumers or to the industry, because of the lack of available data.

That feeds into the Secondary Legislation Scrutiny Committee’s points, which, because the Minister obviously knew they were coming, I am addressing head-on. I do not think there has been a clear enough answer to them. The committee is of the view that it would have been helpful to provide more information on the potential impact of EU exit to UK businesses and consumers in these areas. That is an indictment not of the department, but of the work that has gone into finding out the impact of this.

[Lord Clement-Jones]

Does the noble Lord not agree that, if consultation had been carried out with the right people, we might have discovered what those costs are?

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[Lord Henley]

I thank all noble Lords for their contributions. I will start off with consultation. At the time we were developing these regulations, we were in the early stage of negotiations. Revealing our continuity of approach through a public consultation might have risked our negotiating position, so it was not possible to conduct that full formal public consultation of the sort one would normally like. Within those constraints, the Government engaged with stakeholders in the creative and digital industries as far as possible: in August last year, officials in the department held a whole series of industry round tables to discuss no-deal planning with publishers, collective management organisations, broadcasters, technology firms, museums, archives and educational establishments. I could undoubtedly write to noble Lords and give them greater detail—for example, on the alliance for IP and the British Copyright Council, both of which are representative bodies that cover a broad range of copyright needs. I believe we engaged as far as was right and proper.

However, as the noble Lord, Lord Clement-Jones, and my noble friend Lady McIntosh, stressed, there is an impact from no deal. We did an impact assessment on these regulations and the impact is minimal, but the wider impact of leaving without a deal will be greater. We recognise that leaving the EU without a deal will lead to disruption in the field of intellectual property for the UK’s creative industries. However, in passing this instrument, we will provide continuity wherever possible and, where changes to existing arrangements are unavoidable, we will ensure that clear and appropriate legislation is in place. I believe that that will minimise, as far as possible, disruption to the creative and digital industries, whose work obviously depends on an effective intellectual property framework.

The noble Lord, Lord Clement-Jones, asked what the Government were doing to support UK broadcasters facing the loss of the AVMSD and the copyright country-of-origin principle. I assure him that it is still the Government’s intention to secure an agreement with the EU on our future relationship, and we set that out in last year’s White Paper. We want any deal to involve the best possible arrangements for the broadcasting sector. If we leave without a deal, broadcasters might face disruption due to the EU copyright country-of-origin principle ceasing to apply to the UK. Therefore, again, we sought to give broadcasters and others as much information as possible about the implications of no deal by publishing technical notices and detailed guidance on what that would mean for copyright. However, I make it clear that we will continue to seek a deal.

I also make it clear to the noble Lord and to my noble friend Lady McIntosh that we will continue to seek reciprocity. The political declaration provides a good basis on which to negotiate our future relationship with the EU on these matters. For copyright, this includes a commitment from both parties to maintain high levels of protection for database rights and artists’ resale rights. The specifics of our future relationship with the EU will obviously be the subject of those negotiations. However, as set out in the political declaration, our aim will be to make sure that the agreement continues to stimulate innovation, creativity and economic activity.

Further on reciprocity, the EU portability regulation works through reciprocal application of the cross-border rules. The regulations that we are dealing with today will not cover UK/EU travel in the event of no deal, and the UK obviously cannot replicate the effect of existing arrangements on a unilateral basis. However, keeping the portability regulation in UK law after exit would not have the same effect as an agreement on mutual cross-border portability. Instead, it would place unreciprocated and inappropriate obligations on service providers operating in the UK. Whether we can continue to agree reciprocal portability with the EU will have to be a matter for detailed negotiations. At this stage, I cannot go any further than that.

My noble friend also asked how the IPO came to this decision without an assessment of the loss of service in the UK. UK consumers of online content services might see changes in their services when they visit the EU after exit. This could range from being offered different content to having their access restricted. Ultimately, this will depend on the licences that their service providers have in place and the terms of service. That is a direct result of the UK being considered a third country under the portability regulation. Again, I stress that it is not something that we can deal with unilaterally.

My noble friend also asked about the effect on UK broadcasters. Without a deal, member states may cease to apply the country-of-origin principle to broadcasts from the UK, which will mean that UK broadcasters that transmit across the EU may need to renegotiate their licences to acquire rightholder permissions for every member state in which their broadcast is received. The issue arrives out of EU legislation; again, it is not something that we can address unilaterally.

I turn to the question which all three noble Lords asked about the ratification of the Marrakesh treaty. We are committed to making sure that people with disabilities continue to benefit from improved access to copyright-protected works. We are on track to ensure that we are able to ratify the Marrakesh treaty in our own right as soon as possible after exit. Our ratification will then need to be accepted by the World Intellectual Property Organization before we are once again considered a member of the treaty. While there is likely to be a delay between exit and the acceptance of our ratification in a no-deal scenario, we are working hard to ensure that this will be as short as possible.

There were a few more questions. The noble Lord, Lord McNicol, asked for any further information from the department explaining no-deal issues. I go back to the October 2018 guidance, which sets out in pretty clear terms what no deal means for copyright. I have a little more detail about who we consulted, but I do not think it adds anything to what I said before. I assure noble Lords that this included representatives and trade bodies from commercial broadcasters, collective management organisations, libraries and archives, tech firms, publishers, authors and photographers. I do not think I need to write with any further points. I think that deals with most, if not all, of the points raised, but I see that the noble Lord, Lord Clement-Jones, would like to come in.

[Lord Clement-Jones]

Could the Minister confirm that nobody at any level of the Government has any clue about the full cost of clearing with all those EU countries, which will now be necessary for those broadcasters?

[Lord Henley]

My Lords, I am afraid I cannot give any figure of that sort to the noble Lord and I am not sure it will be possible to do so. If I can do better, I will certainly write to him,

Designs and International Trademarks (Amendment etc.) (EU Exit) Regulations 2019

Lord Clement-Jones Excerpts

Monday 4th March 2019 Grand Committee

We have two different costs: one of £375,000 and one of £500,000. It might be difficult for my noble friend to say what the projected costs will be. Is this something that should cause concern? Is it a one-off cost or an annual cost? Might it stifle future designs?

[Lord Clement-Jones (LD)]

My Lords, as with the last SI, the noble Baroness has put her finger on a large number of issues. Although this SI does not compete with the 600-page one that is still to come, I am afraid that, even at 60 pages, its length demonstrates the number of rights that sadly are going to be lost and which are extremely valuable to designers, particularly fashion designers and particularly at events such as London Fashion Week.

I start by asking whether the Minister could expound the situation as far as the exhaustion of design rights of this nature is concerned. The situation was wonderfully simple for those who wished to exhibit new designs at London Fashion Week, for example, knowing that their designs would be protected on the continent—those who exhibited in Paris had them protected here, and those who exhibited on the catwalk here had them protected all over the EU. Perhaps the Minister will explain what the actual exhaustion situation will be, particularly with the new SUDRs.

The mechanisms are relatively straightforward. These are similar to those adopted for the equivalent of the EU trademark. As I read it, there is a level of automaticity about the registration of the new right. It would be churlish not to welcome the fact it will include the features that are characteristic of the European design right, in terms of lines, contours, colours, shapes, textures and so on. That is an extremely important aspect.

I assume that, although there is a level of automaticity—entirely as the noble Baroness said—the sting will come in the renewal at the end of the three years, or whenever it occurs. The Explanatory Memorandum talks about this costing a total of £500,000. It would be useful to know where that estimate derives from.

Again, we are told that relevant stakeholders were consulted. Can the Minister again unpack whatever round table it was that took place? It is rather like Colonel Mustard in the drawing room: where was the deed done on consultation? It is important that we know when examining these statutory instruments that the right people were consulted and are happy, as far as it is possible to be happy with a no-deal Brexit SI, with the proposals set out. I look forward to hearing what the Minister has to say.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am very grateful for the comments of the noble Baroness, Lady McIntosh, and the noble Lord, Lord Clement-Jones, which have covered much of the ground that I was going to raise, so I shall not go back over it. As both of them have said, this is a complicated area. My feeling from the comments made is that it is likely to become more complicated after a no-deal exit, not least because of an additional design right.

On that point, as the noble Lord, Lord Clement-Jones, pointed out, it has taken this rather odd set of circumstances to persuade the Government that there is a problem with our whole range of design rights. We have raised in the House before the question of why there is such a focus in the UK on registered design rights, as against the very much larger number of unregistered design rights used in fast-moving industries such as fashion and why those industries do not use the registration system at all. Bringing in another model just to try to fill a gap seems to overcomplicate the whole structure, although it provides additional cover, as the noble Lord said, and I welcome that.

Does the Minister recognise that an issue is looming here? Do we need another in-depth look at this whole area to try to unbottle some of the problems that we have caused in the past few years by bringing in additional layers of legislation and regulation and consider whether we need a new approach, because the industry has moved away from the current regulatory structures?

Having said that, a number of points raised need answers, and I look forward to hearing what the Minister will say. I have only a couple to mention. The noble Baroness mentioned paragraph 12 of the Explanatory Memorandum. I have two points on that. At paragraph 12.11, there is a rather odd piece of typography. It states:

“An Impact Assessment has not been prepared for this instrument because [].”


There are just two square brackets, so we do not know why it was not prepared, although we can guess. Can the Minister confirm why we have not had an impact assessment and not leave us hanging? It is a bit like a missing third act.

I have a point about cost recovery, which was well argued by the noble Baroness. The resourcing issues of this are not small: they may be £500,000, they may be £375,000, but they are still substantial. On a cost-recovery model, who pays? Are we saying that designers currently registering designs—which is about 10% of the total design component of industry—are carrying the costs not only of the existing arrangements but the additional burden of having to produce another registered design system introduced because of the possibility of defects in the relationship of those registered on the European basis? It is all very well saying that this is a benefit to the designers, but it is at a cost. I should be grateful if the Minister would confirm my reading of the situation.

I asked this question on the previous statutory instrument, but I did not get a full answer. We seem again to be engaging in asymmetry. There would be an argument for saying that if we have to have a no-deal exit, when that happens, the arrangements for design protection must be limited to the UK because no reciprocity is promised from the EU, yet here we are saying that we in the UK will continue to recognise the registration process which takes place in EU countries after we leave but are unable to offer that right to those who register designs with the UK, even with the additional right. Why are we doing that? Is that an asymmetric approach, or is there something we do not know about the arrangements that have been made for that? I am not against what has been going on. However, if I am right, I think the consequences are that, while overseas or European designers may benefit from having their designs copyrighted—the catwalk example is a good one, in that you can have a fashion show in Paris and be confident that your designs will be covered in Britain—in Britain, we will not be able to do that because there is no necessary reciprocity. That seems unreasonable and I would be grateful to know who benefits from it when we hear from the Minister.

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[Lord Clement-Jones]

My Lords, I understand that there is provision for reregistration—as the Minister describes it—for European designs that are in the pipeline.

[Lord Henley]

I think the noble Lord is correct. If I have got that wrong I will write to him. He also asked about designers being able to disclose their unregistered designs in the UK and whether they would be protected from copying in the EU. A registered design will need to be disclosed in the EU first to be protected there should we leave without a deal. The statutory instrument provisions allow us to negotiate reciprocal arrangements on first disclosure with third countries—which may be the EU, individual countries within it or wider—but that has to be a subject for a future agreement.

My noble friend also asked about the discrepancy between the nine months’ deadline for pending applications and 30 months for deferred publication. The UK will honour the EU deferment period. We will not allow designs to exceed 30 months in total. Applicants will be allowed to file an application claim for a 12-month UK deferment within the nine-month period. However, in some circumstances the full 30 months will fall short. Unless already subject to deferment, applicants will have only 21 months in total.

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[Lord Henley]

As I said, 21 months is 30 months less nine months. I was trying to make clear that the EU deferment period will not allow designs to exceed 30 months in total. Within the nine-month period, applicants will be allowed to file a UK application claim for a 12-month deferment. However, in some circumstances the full 30 months will fall short, unless already subject to deferment and then applicants will have only 21 months in total. I think it is clear—if not, I might have to write to the noble Baroness, Lady McIntosh, on that matter.

I will move on to the question asked by the noble Lord, Lord Stevenson, about the qualification for holding a UK unregistered design right. Currently, the UK law says that someone who lives in or carries on a business in a member state can claim UK unregistered design protection. That is because of Section 217 of the Copyright, Designs and Patents Act, which says that any qualifying person—someone who lives in or runs a business in the qualifying country, which is defined to include a member state—can claim a UK unregistered design right. If we did not make any change to this, after exit day people and businesses in the EU would be able to claim new UK unregistered design rights while people and businesses in the UK would lose their equivalent rights in the European Union. That would create an imbalance between the UK rights holders and the EU rights holders. The UK law is therefore being amended to limit the geographical criteria for a qualifying person to claim unregistered design protection. That means that, after the UK’s departure from the EU, a company based in a member state will not qualify for UK unregistered design.

Finally, I will address a point made by the noble Lord, Lord Clement-Jones, about what would happen if one had a registered community design application which was still pending in the EU Intellectual Property Office on exit day. Businesses with applications which are still pending on exit day must file new UK-registered design applications to obtain continued protection in the UK after exit. However, where a new UK application is filed within nine months of exit day, it will retain the earlier filing date recorded against the corresponding EU application. That will ensure that those with pending registered community design applications will not lose any rights in the UK.

I go back to the point raised by my noble friend, to try to make it a bit clearer, on the nine months provided for pending trademark and design EU applications. The time period was established following informal consultations, and stakeholders who were consulted were content in the main with those nine months. I appreciate it was not the full consultation the noble Lord would have liked.

I think I have answered most of the questions—

[Lord Clement-Jones]

Before the Minister sits down, could he answer my question on exhaustion of rights?

[Lord Henley]

I apologise to the noble Lord. Would he be happy to allow me to write to him on exhaustion of rights? I think that might make life easier.

[Lord Clement-Jones]

I thank the Minister. It is of course a very important aspect for the fashion industry.

Patents (Amendment) (EU Exit) Regulations 2018

Lord Clement-Jones Excerpts

Wednesday 6th February 2019 Lords Chamber

[Lord Warner (CB)]

My Lords, I raised several concerns about this SI in Grand Committee, as the Minister recognised. As he knows, these were the result of briefings from the BIA and the ABPI, with which I am glad to say he has had further meetings. However, since his meetings both these organisations have provided me with further briefing about their continuing concerns.

Before turning to these concerns, I will briefly place them in the wider context of the damage done by Brexit—and the Government’s conduct of it—to our highly successful life sciences industry. This damage could make Nissan and Sunderland look like small beer if we are not careful. From the Prime Minister down, the Government have shown a poor appreciation of the damage being done to this sector: the loss of the EU medicines regulator from the UK; the loss of investment opportunities in the UK; the missed opportunities for collaborative international joint research, development projects and clinical trials; the drain from the UK of talented overseas scientists; and the likely loss of a growing amount of our own homegrown scientific talent.

To this litany of casual vandalism the Government have now added a statutory instrument which, if it were used in the case of our exiting the EU with no deal, would reduce the protection of exclusive intellectual property. The problem is caused by the SI’s approach to supplementary protection certificates—SPCs—which are a key part of the intellectual property protection framework for pharmaceutical research. SPCs are intended to give a period of exclusivity from inherent risks in the development of new pharmaceutical products. But the industry’s trade bodies—both the BIA and the ABPI—are convinced that, in the real world that they occupy, the SPCs as structured in this SI are fundamentally flawed.

In their view—the exact opposite of the Minister’s—this flaw reduces the period of exclusivity for drugs authorised in the UK, because the start of the period for exclusivity in the UK is backdated to a drug’s earlier authorisation in the EU. They are losing a bit of their exclusivity period. The chief executive of the ABPI put this extremely well:

“Britain is internationally renowned for its strong IP framework and this has made it an attractive home for investment from all industrial sectors, including pharmaceuticals. We’re concerned that these measures are a step backwards and seriously undermine the strong life sciences sector that we’ve worked so hard to build over the past 70 years”.


These views are shared by the BIA.

The problem has arisen in large part from the Government’s failure to consult properly on these regulations at the outset—as has been shown to be the case in other no-deal SIs, as we have already discussed. I drew the Minister’s attention in Grand Committee to the inadequacies of that consultation process, and I am pleased to see that he seems to have accepted some of that and tried to rectify matters through proper discussion with the ABPI and the BIA. I congratulate him on taking that particular initiative.

I think that the Minister will be pleased to know that I do not intend to bang on further about past misdemeanours. Instead, I ask him to give the industry two clear-cut assurances about the future conduct of the Government. First, I would like to hear it from him, on the record, that the Government recommit to the UK’s status as a world leader in safeguarding intellectual property and commit to make no further erosions of the UK intellectual property framework; and, secondly, that the Government commit to a specific review of the intellectual property legislation being introduced through statutory instruments as part of the no-deal Brexit planning. The reason for that second one is, frankly, that the industry is very sceptical about whether the Government will just drop these proposals if there is a deal. Ministers in the Government need to understand that they have lost a lot of the confidence of this sector. The time has come for them to start to rebuild that confidence in an industry which is vital for this country’s future.

[Lord Clement-Jones (LD)]

My Lords, the noble Lord, Lord Warner, has expressed the impact on the life sciences industry extremely effectively and eloquently, and I do not wish to repeat anything of what he said. Quite apart from the damning quote from the chief executive, Mike Thompson, the key sentence that I saw in the ABPI’s briefing was:

“The signal the Government has sent to global pharmaceutical companies large and small is that the UK will be less committed to IP protection after Brexit than it has been to date”.


For a major industry to consider that seems extremely damning.

As the noble Lord, Lord Warner, pointed out, the Minister said that it is correct to raise these issues and he is keen to start exploring them, so there is some intention now to have some consultation post the SI rather than proper consultation before it. I think we are looking forward to hearing a bit more of a concrete proposal from the Minister with regard to what precisely is planned.

The Minister’s six and a half-page letter, as we must now call it, dealt with the question of participation in the unified patent court, as set out in the White Paper last autumn. I made the point in Committee that if the UP convention is ratified by Germany and comes into force ahead of our exit date, the UK will need to work out how to remain a member of the UPC or withdraw from the systems, which could have significant impacts on business. In that context, I questioned in Committee whether the UK will have to acknowledge the supremacy of EU law and the ECJ as part of the signing up process. In his letter, the Minister advises that,

“when ruling on domestic cases, UK courts will not be bound to follow decisions of the UPC, or rulings of the European Court of Justice applied by the UPC”.

The last time we discussed this SI, I brandished a 39-page opinion on the subject, so I am rather baffled by the advice that the IPO and the Minister have received in those circumstances, if we have signed up to the unified patent court agreement. I would very much like to hear a bit more clarification on that subject from the Minister.

[Lord Stevenson of Balmacara (Lab)]

My Lords, this is another good debate on these issues. I will not fall out with the Minister about the length of his letter—we can brag about size elsewhere if we wish to—but it came out of my printer at eight pages. I leave that curious intellectual puzzle to him to sort out. Maybe there were other issues that had to be added in.

The Minister could well have dealt with other matters, including various aspects of whether the Silhouette case would apply in this area of the law; one of the points raised in the correspondence was the question of whether Silhouette, which applies to one aspect of our intellectual property, in fact has resonance through its relationship to the other aspects of the IP world and will also be applied. However, that may be for the future.

The noble Lord, Lord Clement-Jones, is right to raise questions about the unified patent court, which could change the game here. If the Minister is minded to confirm any of the points raised by the noble Lord, can he also confirm that premises for the unified patent court have been acquired in London? Are they fully available and ready to be moved into? We are expecting the courts to be operational very shortly, but it would be useful to have confirmation that this is still the case.

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[Lord Henley]

My Lords, if the noble Lord, Lord Warner, will allow me, I was trying to say that, first, I want to continue discussions with them and we will do that. I do not believe that we are as far apart as the noble Lord is suggesting; nor do I believe that we are undermining the gold standard in IP that we wish it to achieve.

We do not want to do anything to undermine our large and successful pharmaceutical industry. It is one of the jewels in the crown, and has a turnover of £41.8 billion. I remind the noble Lord that it has seen a large amount of investment in research, particularly since 2016, and considerable new investment from abroad—again, since 2016. This is an industry that is flourishing and will continue to flourish. We believe that the level of investment within that industry that is supported by the SPC system, which ensures that British businesses are compensated for the period of patent loss protection while requesting market authorisation, is very important. Making sure that our law continues to work is therefore important.

The noble Lord, Lord Warner, says that there is a flaw in the SI: he says that there is a policy change. There was considerable debate on the issue in Committee. As I said previously, I do not share the view that there is a policy change here. This instrument keeps in place the existing calculation of SPC duration. At present, it is calculated from the first market authorisation in the EEA, which includes the UK. The instrument ensures that the exact position remains in place after exit and the calculation is the same. It is precisely this kind of deficiency that the withdrawal Act gave Ministers powers to affect.

The noble Lords, Lord Warner and Lord Adonis, then talked about the industry and said that it wants something different. The BIA and the other organisations representing pharmaceutical innovators would prefer the legislation to be changed so that the term of an SPC would be calculated based on only a UK market authorisation. They argue that the exit may lead to industry launching new pharmaceutical products later in the UK and that they may receive later market authorisation than in the rest of the EEA. That would give a period of SPC exclusivity for a longer period than under current laws. I can see why they argue that point: it is perfectly legitimate that they should do so. However, it would be a significant policy change, affecting the whole of the pharmaceutical industry and the NHS. I do not believe that it would meet the Government’s commitment to avoid a cliff edge for businesses by maintaining the status quo, which is what we are seeking to do, on exit day.

I turn now to the commitment that the noble Lord, Lord Warner, sought from me about whether we would commit to a review within two years. As I have already said, I am keen that we immediately start to consult with all those bodies concerned, and more widely—indeed, with everyone that noble Lords can think of—and explore the landscape after a no-deal exit, and also to look at what happens in other events, to make progress on the issues that concern them. As part of those discussions, I am very happy to talk about the timing and scope of any review of the SPC term. The Government have said that they will review the data and market exclusivity arrangements within two years of a no-deal exit—should there be such an exit, and again we have made it clear that we neither expect nor want a no-deal exit—in order to make sure that we remain competitive. I am sure that we can discuss with stakeholders how any review of SPCs would fit in with that work.

The noble Lord, Lord Clement-Jones, asked about unified patent court judgments in the UK. I can tell him that the UPC is an international court and is not part of the UK judicial system. Its judgments are therefore not binding but can be considered, as is the case with any other foreign judgments. That is obviously a matter for the courts.

The noble Lord, Lord Stevenson, also asked about the unified patent court. I can tell him that the unified patent court and the new British patent will commence shortly after Germany ratifies the UPC agreement, although obviously we have no control over what goes on in Germany. Germany’s ratification is currently on hold pending the outcome of a complaint against the UPC to its constitutional court. Finally, I can tell the noble Lord that the London building is indeed ready.

[Lord Clement-Jones]

My Lords, how can it be a unified patent unless there is unified set of jurisprudence to cover it?

Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018

Lord Clement-Jones Excerpts

Wednesday 6th February 2019 Lords Chamber

[Baroness Kingsmill]

My Lords, I merely want to tell the Minister that I too have been advised by the publishing industry. It is with some reluctance that it has agreed that this is necessary legislation, because of the uncertainty that it would otherwise suffer.

The British publishing industry exports more books than any other country. This piece of legislation is vital for it. While it recognises the importance of this SI going through as a temporary fix, it is nevertheless typical of the kind of rushed legislation that has been necessary because of Brexit. This is another example of a gold-standard industry being put at risk because of the pressure to rush that we are all under.

I emphasise that the correspondence that I have had with the publishing industry has suggested that it is extremely unclear about what will happen and that the uncertainty around the long-term provisions for these particular and very important rights causes it considerable concern. For the record, can the Minister clarify this point?

[Lord Clement-Jones (LD)]

My Lords, whatever the merits of these SIs, I am pleased that we are now debating them on the Floor of the House. I referred in Committee to what my noble friend Lord Tyler said about the critical importance of effective and timely scrutiny of Brexit-related secondary legislation. We have to do this properly. I noticed that the tag in front of this business is “Business expected to be brief”, but we do still have a few loose ends, even after the Minister’s opening statement.

The problem throughout has been inadequate public consultation and the lack of any sunsetting on these statutory instruments. In his letter of 21 January, the Minister defends the lack of proper public consultation as not being meaningful when,

“no wider policy changes were being taken forward”,

and because it,

“would have risked removing the EU’s incentive to agree to an ambitious future relationship on intellectual property”.

I fail to see the substance of the first point, as these SIs are more than technical, and the logic of the second, as, in my experience, contingency plans do not prejudice negotiations.

As we have discussed, we are unilaterally allowing EU 27 goods already placed on the market there to be exported to the UK, which is good news for parallel importers but not as good for parallel exporters from the UK. It is clear from the Government’s small print that these exporters may well need to seek permission to gain entry into the EU. That remains the case.

The Minister did not respond about what the Government are doing to mitigate their situation, by advice or otherwise. I was pleased that he confirmed that the ruling in the Silhouette case and those that followed will apply post Brexit to this modified exhaustion regime. In his letter and in Regulation 2(2), the Minister prays this in aid. It could still have been dealt with expressly in the language of the statutory instrument.

In his responses, the Minister also failed to totally clarify the work being conducted by the IPO into a future exhaustion regime. I very much agree with the noble Baroness, Lady Kingsmill, about how we know about the Government’s current thinking emerging from the review and research, and about organisations such as the Publishers Association asking for the Government’s assurance that they will avoid an international copyright exhaustion regime being implemented in the longer term. Indeed, they are asking for an effective national exhaustion regime so that the UK’s outstanding creative industries, including the publishing industry, will be properly supported. Is that the intention of a future exhaustion regime?

I do not know whether the noble Lord, Lord Adonis, will speak on this SI, but there are a number of aspects that have not yet been covered on the subject of intellectual property rights—the geographical indications, for instance. I see that there is now a draft statutory instrument on what will happen to design rights in the event of a no-deal Brexit. I look forward to that debate. Then there is the very important aspect of rights of representation by IP advisers, trademark attorneys and the like. I do not recall the Minister talking about that either when he addressed us in Committee.

Finally, I express bafflement at the fate of the draft Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations, which the sifting committee and our own Secondary Legislation Scrutiny Committee considered should be dealt with by the affirmative procedure. I do not think the Minister answered that question. When will the draft SI come before us? There are some loose ends and I hope that in the course of the debate the Minister will be able to tidy them up.

--- Later in debate ---

[Lord Henley]

I do not accept the noble Baroness’s metaphors, but I repeat what was said, and the noble Baroness is quite right to repeat the other parts of the message from the Publishers Association.

I come to the point I was about to deal with: the long-term certainty that the Publishers Association and the noble Baroness are looking for. The regional exhaustion regime currently in place supports frictionless trade in goods within the EEA and is considered to provide the optimal balance between the interests of rights holders and consumers. Consumers in the UK will continue to have access to a wide range of products at more competitive prices. Maintaining the current arrangements avoids the uncertainty of cost for UK businesses and consumers associated with a change of exhaustion regime, while the UK considers the impact of a future change to the regime. The SIs, we have made clear, essentially preserve that status quo, but that allows us time to consider evidence and consult on any future change.

I shall move on to the sunset clause, raised by the noble Lord, Lord Clement-Jones. Again, I believe I dealt with this in my opening remarks, but the instrument is intended to be a temporary measure. The Government are considering options for the future. As I made clear, that will continue with extensive stakeholder engagement and consultation, and we must make sure that we have robust evidence. Until we have dealt with that, we will need this in place in the event of no deal. Therefore it is not necessary to have the sunset clause referred to by the noble Lord and the noble Lord, Lord Adonis. Planned research removes the purpose of the sunset clause and the consultation will, in the end, provide the appropriate solution for the future.

I turn to the noble Lord’s further question, on mitigation for exporters. I make it clear that the arrangement will not disadvantage UK businesses, as opposed to EU businesses, as the effect depends on where businesses hold rights, and not on which country they are based in. A continuation of the status quo will minimise any negative economic impact. For example, it will allow existing import arrangements into the UK to continue, including for businesses that rely on secondary market goods. Businesses wishing to continue to parallel export goods from the UK to the EU will need to check with owners of rights in the EU—which may be UK businesses themselves—whether they need permission to do so. For example, UK businesses owning trademarks in the UK and EEA may choose to limit how their goods are parallel exported from the UK to the EEA, if they wish to exploit market conditions such as consumer preferences and labelling regulations.

[Lord Clement-Jones]

My Lords, I am sorry to interrupt the Minister. That is precisely the detriment that I was talking about—that they will need to seek permission if they are going to export in those circumstances. Therefore, the question is: what assistance and advice will they be getting directly from the Government?

[Lord Henley]

They will have advice, as is appropriate, from the Government, and the IPO will offer that. However, we cannot force the EU to take a more favourable position to mitigate this effect. Again, this will, we hope, be dealt with in any deal; we are dealing with a no-deal situation in these regulations.

Finally, the noble Lord, Lord Clement-Jones, wanted the Silhouette case expressed more clearly. The withdrawal Act makes clear that EU case law before exit will continue to apply to the interpretation of EU-derived domestic law after exit. Furthermore, Regulation 2 makes clear that the effect of domestic retained EU law under Section 4, relating to exhaustion of rights, does not change after exit, despite the UK not being a member state. Whatever effect it had in the UK before exit will be the same after exit, as I hope I made clear in my opening remarks. I believe that deals with the questions that have been put to me.

Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018

Lord Clement-Jones Excerpts

Monday 14th January 2019 Grand Committee

[Lord Adonis]

The noble Lord makes an extremely important point, and not just in respect of paragraph 2.1. I have before me the whole of Part 2, which has a whole series of statements made by the Minister of State for Universities, Science, Research and Innovation, Sam Gyimah, to the effect that in his view,

“the Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018 does no more than is appropriate”.

But, as the noble Lord says, that Minister is no longer in office, so it would be appropriate for the noble Lord, Lord Henley, to tell us whether the new Minister for Universities, Science, Research and Innovation also subscribes to those statements. I should also point out to the Grand Committee that Sam Gyimah is no longer the Minister of State for Universities, Science, Research and Innovation precisely because he resigned in protest at both the Prime Minister’s existing deal and the possibility of the Government contemplating no deal.

Not only has there been no consultation on these regulations; the Minister is not even able to tell us whom the Intellectual Property Office spoke to. At the moment, the only person we know the office has spoken to so far is my noble friend Lord Warner—because he phoned it. The Minister was not able to tell us of anyone else who had been spoken to. He told us that, in an inversion of all the established practices, the consultation on these regulations will take place after they have been approved by the House, not before. The Minister who said that these regulations are proportionate and appropriate has resigned. He resigned specifically because he is not prepared to proceed with Brexit or contemplate no deal. There has been no formal consultation with any other partners. The Government cannot tell the Committee who has been informally approached.

We have no statement from the existing Minister of State for Universities, Science, Research and Innovation that these regulations continue to meet the requirements of the EU withdrawal Act. I would be perfectly happy for the Committee to adjourn while we ask Sam Gyimah whether it is still his opinion that these regulations are proportionate and appropriate. I suspect that it is not, given the statements he has made in the media over the last 24 hours about the huge risks, dangers and costs to the country of Brexit, and a no-deal Brexit in particular. It is a no-deal Brexit that the Government are asking the Committee to approve this afternoon.

The other vital point is that, not only do we have good reason to believe that the business community is worried about these regulations and concerned about the costs, but the relevant Ministers no longer even subscribe to the views they gave when the regulations were being drafted. However, we do now have the benefit of the view of the House of Commons on no deal. Last Tuesday, before we considered these regulations, the House of Commons, for the first time, specifically debated and voted on the issue of no deal. In its amendment to the Finance (No. 3) Bill, it rejected the contemplation of no deal by 303 votes to 296. That is not only a majority of seven against no deal; it was one of the largest votes the House of Commons has conducted on Brexit in any respect. The Grand Committee has good reason to believe that these regulations are being brought forward in defiance of the will of the House of Commons, because that House has said that it is not prepared to contemplate no deal.

In the briefing for her speech today, the Prime Minister said that she now thinks that no Brexit is a bigger risk than no deal. I am perfectly prepared to take that risk; some of us think it is well worth taking. Indeed, we are trying to encourage the Government to enter the supremely risky and dangerous territory of no Brexit. We know how risky it is; we do not need to conduct impact assessments because we are in it at the moment and it is a perfectly tolerable state of affairs. The Government describe it as a risk but, in the last 24 hours, the Prime Minister told us that the risk of no deal is declining. That is the Prime Minister’s judgment, and the House of Commons voted only six days ago, by 302 votes to 296, not to have no deal. We have had no consultation whatsoever on these regulations. In the debate on the no-deal proposition last week, the Exchequer Secretary to the Treasury, Robert Jenrick, said:

“As I made clear, the Government do not want or expect a no-deal scenario”.—[Official Report, Commons, 8/1/19; col. 269.]


If the Government do not want or expect a no-deal scenario, it is wholly within their power to rule one out. The Minister, who is an extremely distinguished and effective member of the Government, could make a contribution to that cause today by withdrawing these regulations in response to what appears to be the overwhelming opinion of the Grand Committee.

[Lord Clement-Jones (LD)]

It looks like we are on, my Lords. There is a great deal that one could say about the way in which the need arises for this SI and indeed for the others in this series. Today my noble friend Lord Tyler has called them “speculative”; last Wednesday I think he was slightly more scathing and called it a possibly wasted exercise, while the noble Lord, Lord Deben, was even more forthright, saying that we could be,

“conniving in what is manifestly a total nonsense”.—[Official Report, 09/01/18; col. 203GC.]

I have some sympathy with that statement, given that no deal, as the noble Lord, Lord Adonis, has explained, is now not the will of the House of Commons. At the same time, though, my noble friend Lord Tyler also referred to the report by the Constitution Committee, The Legislative Process: The Delegation of Powers, which made explicit reference to the critical importance of effective and timely scrutiny of Brexit-related secondary legislation. So I reluctantly accept that we still have to give it proper scrutiny in these circumstances but, whatever the merits of the statutory instruments, the least that we can do is debate them on the Floor of the House in the main Chamber, and I will be supporting that proposition if it is put later.

Each of the statutory instruments is important in itself. Even if they are only preparatory to no deal, in practice they may be indicative of longer-term government and IPO thinking, and may well be intended to take effect even if we have a deal and the transition period comes into effect. I have an enormous amount of sympathy for what my noble friend had to say about the time limitation and the need for a sunset clause, and for what the noble Baroness, Lady Kingsmill, said about it not being explicitly stated that the regulations do not come into effect if indeed there is a deal. There is a large gap in the middle of the regulations.

In the short term, these regulations are a partial solution to the problem of the UK no longer being inside what is called “Fortress Europe” for the purpose of the exhaustion of intellectual property rights. If there is no deal and the exhaustion SI comes into force on exit day, the effect is to implement, as the Minister explained, a modified version of the current regional EEA exhaustion regime. It would ensure that, post Brexit, once a product has been legitimately placed on the market in the EEA, it can continue to be resold into the UK without the rights holder preventing that. What we are doing is unilaterally allowing EU 27 goods already placed in the market there to be exported to the UK. That may be good news for parallel importers but it is not such good news for parallel exporters. It is clear from the Government’s small print that these exporters may well need to seek permission to gain entry into the EU. No wonder it has been called a one-way exhaustion regime.

What are the Government doing to mitigate the situation? It is clear—the discussion earlier elucidated this—that there has not been any formal consultation on this one-way regime. Indeed, it calls into question the statement about the lack of an impact assessment and what the Minister said in his letter about the draft regulations not changing current policy or imposing new liabilities or obligations on any relevant persons. If an exporter has to seek the consent of the rights holder on exporting into the EU 27 after a no-deal Brexit under the regime set out under these regulations, surely that will have a significant impact on that business.

--- Later in debate ---

[Lord Clement-Jones]

The Minister may say that, but he has to answer the question about why the international exhaustion regime is not ruled out in the current SI, a point that both the noble Lord, Lord Stevenson, and I have raised. It is explicitly not ruled out, and that is the uncertainty contained in this SI.

[Lord Henley]

I do not think I can take it any further. As I have made clear to the noble Lord, this is dealing with no deal and it would be wrong to set that out in the no deal. We can now consider the various options and come forward with them in future—as the noble Lord would wish me to do—after we have considered that with appropriate businesses and consumers.

[Lord Clement-Jones]

My Lords—

[Lord Henley]

I am not giving way until I have finished this sentence. As I have made clear—I think I have already said this—this is going to take time and I do not believe there is a compelling reason to rush.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, without putting too fine a point on it, I am arguing that in a no-deal situation it needs to be clear that the international exhaustion regime does not apply. That is not clear. The noble Lord, Lord Stevenson, read out some legal analysis, and I have had the same analysis. The concern is that, although it is stated that the regional regime will come into effect regarding our relationship with the EU, there is no statement on any other application of an exhaustion regime. It is therefore quite possible, in the opinion of many IP lawyers, that the international exhaustion regime that existed before our membership of the EU could again come into effect, and the Silhouette case would not apply. That needs to be addressed.

[Lord Henley]

I will get to the Silhouette case later on. Although I will comment on it briefly, it might be that I need to write in greater detail.

Going back to the SI before us, it is clear that it maintains the status quo as far as possible. Regulation 2 ensures that the domestic exhaustion framework remains the same after exit. That delivers as far as possible a continuation of the current regional exhaustion regime. That is the legal clarity we can provide the moment. I cannot take the noble Lord any further, other than to say that we have been clear that this is a temporary fix and we will revisit it when we have gathered the evidence we need.

[Lord Clement-Jones]

My Lords, I have one final intervention on this point. The noble Lord can take us no further—he is effectively requiring us to make a leap of faith on this SI.

[Lord Henley]

No, I do not believe it is a leap of faith. It provides the clarity that business needs, in the form of a temporary fix. Thereafter—the noble Baroness, Lady Bowles, also asked about this—we will be much more able to consult fully on this instrument than was possible at this stage. At that point, we can take things further.

I will deal with one or two other points. The noble Lord, Lord Adonis, is not in his place so I do not think I need to deal with his points, but if he likes I will write to him on the question of whether “should” should be “would”, for example. The noble Lord, Lord Tyler, referred to comments made by previous Ministers. I assure him that, as always, Ministers speak with one voice and will continue to do so. Those statements reflect the view that the Government still hold.

The noble Lord, Lord Clement-Jones, asked about an impact statement and how it can be said that no impact on business is expected. An impact assessment is intended to look only at the impact of the legal instrument to which it is attached. This instrument does maintain the status quo within the UK and we therefore believe that there will be relatively little impact on business. There will, obviously, be some impact on parallel trade from the UK to the EEA and that will depend on the action of EU rights holders and, more broadly, on what the EU chooses to do on the issue of exhaustion. Those decisions are not within the scope of this instrument, so it is not possible accurately to reflect their impact in the assessment.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, one could easily quarrel with that statement. The regime set up by the SI is, as described by me, the noble Lord, Lord Stevenson, and the noble Baroness, Lady Bowles, an asymmetric or one-way exhaustion regime. How come that is not covered by an impact assessment?

[Lord Henley]

My Lords, I repeat what I said: this is designed, as an exit SI, to deal with leaving without a deal. We want to maintain the status quo and therefore anticipate the impact on business to be relatively small. I will complete what I am going to say before I take interventions.

--- Later in debate ---

[Lord Henley]

I cannot remember whether that is the case with this set of regulations, but the noble Lord is right that, obviously, we do not consult on SIs with an impact of that order. My understanding is that he is correct, in that there is little or no impact in the case of these regulations. That is why most businesses to which I have spoken are broadly in favour of the regional exhaustion regime.

[Lord Clement-Jones]

My Lords, although the Minister has characterised these regulations as simply putting in place the status quo, he will recognise that business will not consider this the status quo. That is entirely the reason behind the argument that an impact assessment should have been done and that proper consultation should have been carried out.

[Lord Henley]

I accept that the noble Lord is right that business would consider a no-deal situation to have major implications. In relation to this issue, I believe that what we have set out in our no-deal regulations will have very little impact. That is the type of clarity that we are trying to give business.

--- Later in debate ---

[Lord Henley]

I do not accept that. What we are trying to do by passing no-deal regulations is to ensure a degree of certainty for the businesses we are talking about. That is why we are dealing with the hypothetical situation, and I am perfectly happy to do that. I am also happy to say that I think it unlikely that there will be no deal, but the noble Baroness and others would think we were being irresponsible if we did not prepare for the eventuality of no deal. That is all we are doing.

I move on to a further question raised by the noble Lord, Lord Clement-Jones, on the exhaustion of rights and whether we should agree to the proposal when British businesses cannot export parallel goods to the EEA. Again, there may be restrictions on the parallel export of goods from the UK to the EEA, and the noble Lord is quite right to point out that that is a consequence of leaving the EU. However, businesses wishing to parallel export goods to the EU will have to check with rights holders whether they need permission so to do. The SI seeks to provide a continuation of the status quo most closely, and would likely therefore have the least economic impact while, as I said earlier, the Government consider the impact of any future change.

I turn to the Silhouette case. We are talking about a ruling from the Court of Justice of the European Union, and it may be that I need to write in greater detail on this subject. That ruling from the CJEU is required to implement a regional exhaustion regime, but there are unclarities—if I may put it that way—as to when the Silhouette case will become retained EU case law under the withdrawal Act. EU case law before exit will continue to apply to the interpretation of EU-derived domestic law after exit under the withdrawal Act. EU case law before exit relating to the effect of this law will, obviously, continue under Section 6(3) of the withdrawal Act. Again, with these SIs, we provide the legal clarity that is needed. However, because anything that comes from the Court of Justice of the European Union frequently requires a little extra clarity, if the noble Lord will bear with me, I would prefer to write in greater detail to him on the Silhouette case in dealing with those points.

[Lord Clement-Jones]

My Lords, I accept the Minister’s offer, because that was quite a confusing response. Precisely because a no deal is envisaged, there is the question of whether CJEU case law will continue—whatever we say about it—with regard to other exhaustion regimes which may or may not spring up. It would therefore be useful to get a letter from the Minister after this SI has been debated.

[Lord Henley]

My legal eagles will be hard at work on producing just such a letter for the noble Lord, and I hope it will provide him with a degree of clarity—to the extent that that can be provided.

The noble Lord also asked about our plans for IP in the future relationship. As we made clear in the White Paper, arrangements on future co-operation on IP would provide important protections for rights holders, giving them confidence and a secure basis from which to operate in and between the UK and the EU. As part of this, the UK will seek to remain within the unitary patent system and the unified patent court. The political declaration states that as part of the future framework, the UK and EU should provide for,

“the protection and enforcement of intellectual property rights to stimulate innovation, creativity and economic activity”,

and co-operate on areas of mutual interest. Obviously, the specifics of that will be a matter for detailed negotiations on the future partnership.

The noble Lord also asked about provisions concerning designs and international systems for trademark and design protection. The instrument before us today focuses on trademarks, specifically EU trademarks and domestic trademarks derived from EU legislation. An instrument setting out our intentions for continued protection of unregistered community designs and international trademark and design rights will be laid in due course. The noble Lord mentioned the draft SI on copyright, and I can give an assurance that we are working hard on the instrument and will bring it forward as soon as possible.

[Lord Clement-Jones]

My Lords, can the Minister confirm that they will be no-deal SIs on the same basis as the other three SIs being put forward today?

[Lord Henley]

If it is necessary that there be no-deal SIs, then yes, there will be a no-deal SI. I am advised that that is the case, so there will be scope for the noble Lord to have another debate on this issue. I look forward very much to that happening. Whether my noble friend Lord Bates looks forward to that is another matter, but he has other matters to deal with.

Finally, the noble Lord, Lord Stevenson, asked about the practical benefits that this SI proposes: why should we agree to this proposal when the EU could get flooded with parallel imports from the EEA? The approach simply ensures that what happens currently will continue after exit day, and allows for IP-protected goods in the secondary markets to continue to be imported from the EU, including medicines. This will ensure continued consumer confidence and resilience of the supply of goods into the UK. That will be the continuation of the current situation; there is no reason to anticipate any increase in parallel traded goods after exit.

I hope I have dealt with all the points that I tried to deal with; I have also given an assurance that I will write on other matters. I beg to move.

Patents (Amendment) (EU Exit) Regulations 2018

Lord Clement-Jones Excerpts

Monday 14th January 2019 Grand Committee

The way it has been done here, the instrument aligns the maximum term for this patent-like right to continue to that which would be applicable in the EEA so that it would all expire at the same time. Was that decision taken to make it simple, in particular because of the decision made about parallel imports, so that you were not having to cross-check whether there were different rights applying at the time of the parallel imports? We have already had a discussion about parallel imports and whether that was a good idea. One comes back to the same situation that we have already visited. I am not sure what the starting point is; I am asking whether it was the decision on parallel imports and whether, if we suggested that perhaps that should be time-limited, even if not in this instrument, we should do something quite quickly to make it so. Would that then adjust what was done by the supplementary protection certificate because it follows that you would? When you come to look at the economic terms, there are lots of things to balance: whether you want a longer term of protection, who is paying for it and what benefits there are to the industry and the country. These are very nuanced and difficult, and there are always protagonists on both sides. Normally, I tend to be one of the protagonists against extensions; you should have to fight hard and justify them. However, that is all the more reason for having a much wider and longer exposure of all these rather difficult issues that one needs to come to grips with. I therefore agree with those noble Lords who have been poking around to see how good the consultation has been because these are serious issues. But, as I said, my question comes back to the fact that it is a bit chicken and egg: was the parallel import decision taken first and did everything else follow from that?

[Lord Clement-Jones (LD)]

My Lords, we have to conclude after the debate so far that this SI is holed below the waterline and the Minister will have some difficulty in preventing it sinking. He will have to write a pretty good letter by the time this comes to the whole House to see that it goes through when it comes to a vote there. The powerful speech made by the noble Lord, Lord Warner, has exposed the business issues involved in this. I was interested to hear what the noble Lord, Lord Adonis, said about the legal technicalities on this, and of course the impeccable logic of the noble Lord, Lord Deben, and the noble Baroness, Lady Kingsmill, on the consultation and the impact assessment is unassailable. The Minister will therefore have a great deal of difficulty in persuading us to approve these regulations, whether here or, eventually, in the House.

I am grateful to my noble friend who is a patent expert. My expertise in intellectual property extends to trademarks and copyright but it is very useful to have her unpacking of some of these issues as well. What particularly concerns me about the substance of the SI is not just that it is in the eventuality of no deal but that it has all the signs of something that was planned to take effect at the end of the transition period if the Prime Minister’s deal was going to take effect. This looks as if it is a longer-term arrangement. I think it was enshrined in the White Paper, or at least the outlines of it were, and that makes it of particular significance to get right. If there is any kind of deal then I suspect that this is what will be put into effect. It therefore has a double significance and is not just a fix for this purpose which has not been consulted over and which is not acceptable to a major trade body. I have dealt with the BioIndustry Association and I have a great deal of time for it and respect for the expertise that it embodies. The fact that there has not been adequate consultation over something that is potentially a long-term solution makes this even more questionable.

[Lord Warner]

I am sorry to interrupt the noble Lord further but I want to give a bit of support to what he is saying. In my remarks I drew attention to the fact that the MHRA, the UK pharmaceutical regulator, actually tried to suggest to the BIA that it should wait for a review in two years’ time. That looks remarkably like the timetable for the end of the transition period, so I want to give some support to the arguments that the noble Lord is making.

[Lord Clement-Jones]

I thank the noble Lord for that intervention because that is exactly the impression that I had got.

To add to the Minister’s woes, I want to go off into a completely different subject that he himself raised at the very beginning: the issue of the Agreement on a Unified Patent Court and the unified patent. The unified patent has come up; the Minister has mentioned it and it was included in the technical note in September. There is a big issue surrounding the Agreement on a Unified Patent Court and the unified patent. If the agreement is ratified by Germany and comes into force ahead of any exit date, the UK will need to work out how to remain a member of the UPC or withdraw from the system, which could have a significant impact on business. Of course, at this stage it is not clear if the agreement will come into effect at all, but if it does and if, as a third-party country, the UK then wants to take part, is it not clear—I have a 39-page legal opinion on this subject—that we, the UK, will have to acknowledge the supremacy of EU law and the ECJ as part of signing up to the UPC agreement? What kind of “taking back control” for Brexiters will that be?

What advice have the Government received on this matter? I heard what the Minister had to say: he made the very positive statement that we were going to sign up. Have the Government had any further observations on the UPC agreement and the unified patent? How do they envisage UK legislation dovetailing with both systems, assuming that it is ratified?

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a good debate that has raised lots of issues. I think the noble Lord, Lord Clement-Jones, is right that there are real questions to be asked here, although I feel that we are experiencing a bit of a split focus here. It is like being part of the film “The Matrix” because there seem to be two different levels of debate going on. There are the particularly narrow questions about the statutory instrument as presented, with which I think there are some substantial difficulties, but there are also the wider issues about why we are doing all this and the way that we are doing it. The noble Lord, Lord Deben, and others have focused on the absurdity of a situation where we are trying to persuade ourselves that, despite our best instincts, despite all the training that we have had here and despite everything that we do every other day of our lives, we are quite happy to sit here and wave this through just because it might not happen. That seems to be Alice in Wonderland rather than “The Matrix”, but perhaps they come together in a curious way which I have yet to experience.

The noble Lord, Lord Clement-Jones, commented on the Unified Patent Court, which is an intriguing area of public policy which has yet to have its full ramifications explained. He is absolutely right that the UK has committed itself to ratifying the UPC and intends to join up. I am sure that the Minister will confirm that when he comes to respond. Of course, with that comes the continuing role of the ECJ, because all judgments of the UPC—although there will be a platform of it operating here in London in property which has already been bought and refurbished in premises on a lavish scale which may not have been seen by the press yet, but I am sure that when they are there will be a bit of a scandal—will be absolutely redolent of the way in which the European continuing engagement will have to operate. That is because so many people hold unified patents and will need to have them defended in ways which are important not only here but in the six other areas where the court will be operating. But that is part of the further discussion and debate along with the consultation issues which I agree need to be bottomed out at some stage, but perhaps not today.

I may just stunt the time taken up by other speakers by looking at the other four SIs which are due to be discussed shortly by the noble Lord, Lord Bates, and others. I am sure that he will have read through and inwardly memorised the rather clever phrasing used by HM Treasury which I recommend to the department as it might wish to use it in the future and thus avoid some of the confusion. It states:

“HM Treasury has not undertaken a consultation on the instrument, but has engaged with relevant stakeholders on its approach to Financial Services legislation under the European Union (Withdrawal) Act 2018, including on this instrument, in order to familiarise them with the legislation ahead of laying … The instrument was also published in draft, along with an explanatory policy note, on 31 October 2018, in order to maximise transparency ahead of laying”.


That is wonderful phrasing and I congratulate the Treasury on having found a way out of an apparently insoluble problem. If it can defeat the noble Lord, Lord Adonis, and his assembled minions, obviously it will be well ahead of the game.

--- Later in debate ---

[Lord Henley]

The noble Lord is right to point to the importance of the life sciences sector, and I am grateful he did. One should also re-emphasise—I would be grateful if the noble Lord would do so—just how important the life sciences industry is to us and what a great state it is in at the moment. The noble Lord will be aware of the recent stage 2 of the sector deal in life sciences that we published along with that sector. I am sure the noble Lord very much welcomed the fact that a major multinational—one based in Brussels, for that matter—announced at that stage that it was investing a further £1 billion over the next five years in research in the UK. Obviously Brexit is not putting off certain parts of the life sciences industry, and I am sure the noble Lord will welcome that.

I do not share the noble Lord’s view that there is a policy change. The SI maintains precisely the current calculation of the SPC duration, and at present it is calculated from the first marketing authorisation in the EEA, which includes the UK. After exit, without the provisions we have set out in this SI, the duration of an SPC in the UK would be calculated from the first authorisation in the EEA—but that would not include the UK. That would be nonsensical and is exactly the sort of deficiency that Parliament gave Ministers carefully limited powers to fix within the withdrawal Act. We believe we are complying with the powers we have within the withdrawal Act. That is what the SI does. It shows that after exit, SPCs within the UK will continue to be calculated from the first marketing authorisation in the EEA or the UK, and the status quo is maintained.

Finally, I turn to the point made by the noble Lord, Lord Adonis, about the Explanatory Memorandum. He said that there was little impact. If a measure has a net impact to business of less than £5 million then obviously a full impact assessment is not required. The £5 million threshold, as the noble Lord will be aware as a former Minister, is set out in the better regulation framework guidance, and measures below the threshold must be accompanied by a proportionate analysis. The analysis is summarised, as the noble Lord will be well aware, in paragraph 12.3 of the Explanatory Memorandum.

I used the word “finally” but, if noble Lords will bear with me, I will have one or two more “finallys”. I turn to the concerns about the unified patent court. We have set out our proposals for the future relationship with the EU, including exploring continued participation in the UPC and the unitary patent. In the political declaration, the UK and the EU have agreed to co-operate in areas of mutual interest relating to intellectual property, including patents. The future of the UPC and the unitary patent will be a matter for negotiation. It is therefore rather too soon to be setting out the further dovetailing legislation.

The noble Lord, Lord Clement-Jones, also set out the points made by the law firm Bristows. We are aware of the point that Bristows has made. The patents legislation contains a number of references to the comptroller and the court, and all those references will be modified in the event of the UPC coming into force. The patents legislation will fully recognise the jurisdiction of the UPC.

[Lord Clement-Jones]

I apologise to the Minister but actually it was not the Bristows opinion; the 39-page opinion that I mentioned is actually from Brick Court Chambers, and it is very comprehensive. It makes it very clear that if we are to sign up, or to continue with our intention to sign up, we will have to recognise the jurisdiction of the European Court of Justice and there will be no getting out of that. That is what makes this so ironic in the circumstances.

[Lord Henley]

I look forward to reading the opinion that has emanated from Brick Court Chambers in due course. I was responding, I thought, to the points that the noble Lord had made about Bristows.

[Lord Clement-Jones]

That was the noble Lord, Lord Adonis.

[Lord Henley]

I apologise to the noble Lord, Lord Adonis. I will no doubt study, as will my officials, both the Bristows letter and the opinion from Brick Court.

Trade Marks (Amendment etc.) (EU Exit) Regulations 2018

Lord Clement-Jones Excerpts

Monday 14th January 2019 Grand Committee

[Baroness Bowles of Berkhamsted (LD)]

One small point struck me, not having looked at this before we commenced proceedings. I fully understand the transfer of the pending applications and the ability to file a new application and have it allocated the earlier filing date that the European trade mark had. I do not see any legal difficulty with that, but I wonder if there is a legal difficulty in allowing that to claim the priority date of the EU trade mark, in the sense that it would operate under the Paris Convention, which we and many other countries are party to. I used to take great pleasure in reminding the EU that the Paris Convention of 1883 predated the EU treaties and that they sometimes could not do things. But I wonder whether there has been any advice on that, because there is a discontinuity.

To take a parallel example, in the United States, if you file a continuation in part, there are careful rules so that you can ensure that the priority claim can go all the way through in a continuous way. I wonder whether, through the changing from a European office to the UK office, there is a discontinuity here that would mean that priority date was challengeable. If there was a later priority date UK-only national application from an applicant not from the United Kingdom but from another country that was party to the Paris convention, would there be a clash of rights? It is a question that should appeal to lawyers looking at these things. I cannot answer it without having a longer think, so I am asking the Minister whether he can advise me what advice he may have had on that.

[Lord Clement-Jones (LD)]

My Lords, my noble friend has asked an important technical question, given her long-standing expertise in this area. As with the patent statutory instrument, this does appear to be a solution for trademarks, or to take advantage of the European community trademark. It appears to be a solution devised not just for a no-deal situation, but with a deal or the transition period in mind as well. Again that gives this particular statutory instrument a greater significance because it might be there for some considerable period of time in the event that a deal was reached. Moreover, as the noble Lord, Lord Adonis, has pointed out, similar issues regarding consultation and the impact assessment arise in connection with this statutory instrument as well.

It was interesting to hear what the noble Lord, Lord Deben, had to say about the difference in wording between the different Explanatory Memoranda. Asking a,

“small group of trusted individuals with expertise in trade mark law”,

almost means that the question is asked of people who are not going to give you the wrong answer.

Quite frankly, the really important aspect of this is the impact on business. On the impact assessment, the homework has been done in such a way that it answers the question by bringing the impact under £5 million. I cannot believe that that will be the total cost to business once you have added together all the issues such as the legal advice that will need to be taken and the red tape involved. I know this is a solution that is designed to be constructive but there are inevitably going to be costs. Frankly, the importance of brands being what it is, the actual costs involved to business are going to be quite high. I cannot believe that the figure is not going to be higher than £5 million.

The same issues apply to this statutory instrument as much as they do to some of the earlier ones. However, there are other technical questions. My noble friend has asked one set about the priority date, but another important question is which court will have jurisdiction if the validity of the original EU trademark is challenged in the future. We cannot leave business in a state of uncertainty. Then of course the UK trademark comparable right will be a stand-alone right. Does that mean that in those circumstances an applicant will have to challenge a trademark’s validity both in the UK and in the EU? What is the answer to that? One right derives from another. As a result of that, does someone wishing to demonstrate the invalidity of a trademark have to go to two jurisdictions? If that is not an additional burden on business, I do not know what is.

There are a number of questions to be asked here. We have come back again to the circularity of a quick fix that could have long-term consequences and where the procedure, process, consultation and impact assessment have been grossly unsatisfactory.

[Lord Adonis]

Before the noble Lord sits down, he has great familiarity with the sector, as does the noble Baroness, Lady Bowles. Does he think there are similar concerns in the sectors affected to those referred to earlier by the noble Lord, Lord Warner, that organisations and companies intimately affected by these regulations have not been consulted because they do not count within the,

“small group of trusted individuals”,

referred to in paragraph 10.1 of the Explanatory Memorandum?

[Lord Clement-Jones]

I cannot answer that question. I think that these have been drawn up in an attempt to be constructive. I do not think the initial thought was that these were going to create difficulties for business. The trouble is that at the end of the day any business, when it is looking at its intellectual property, is going to prefer to stay in the EU rather than come out, so there is a fundamental aspect of this which is not business-friendly. I can see what the noble Lord is driving at, but this measure is an attempt to be constructive in circumstances where it is very difficult to get a decent result.

[Lord Puttnam (Lab)]

My Lords, on that point, I have spent the last 50 years of my life earning my living as a result of intellectual property. It is almost impossible to explain to noble Lords and the Minister how fundamental the harmonisation of intellectual property and the clear, clean flow of revenues generated by it is to the financing, never mind the issue of recruitment, of material for film, television and associated industries.

--- Later in debate ---

[Lord Henley]

I will certainly address that in my letter and ensure that the noble Lord receives it.

I turn to the question of jurisdiction. The noble Lord, Lord Clement-Jones, asked which court has jurisdiction if the validity of the original trademark is challenged. We have made provision as to how pending proceedings before the UK courts on exit day will be dealt with: they will continue on the basis of the EU regulation. New cases brought after exit day will be dealt with by courts in the individual remaining member states.

Lastly, I turn to the point made by the noble Baroness, Lady Bowles, about the Paris convention, a point that I think she described as appealing to lawyers. Well, here is one lawyer that it does not appeal to because I do not particularly understand it. Again, it will have to be dealt with in subsequent correspondence but I am advised that the UK application will in addition enjoy the priority right claimed by the EU trademark application. I hope that helps, but if I can expand on that matter then I shall do so.

I was about to move the Motion but I can see that I am not going to be allowed to, so I will give way for one last time to the noble Lord, Lord Clement-Jones.

[Lord Clement-Jones]

I am deeply grateful to the Minister. I did not really think that his answer on the jurisdiction point was completely comprehensible. I hope he is going to include it in the letter that he writes because I am not sure about the exit date that he was talking about. He seemed to be saying that a different jurisdiction applied post the exit date as opposed to pre the exit date. I must admit that that is not entirely clear to me because the comparable right, which is derivative, is designed to spring up precisely after the exit date. I would really like to see a full explanation in his letter.

[Lord Henley]

For once, my Lords, I thought the noble Lord had said that my explanation was completely explicable but I imagine that he said it was inexplicable, so I will certainly include that in the letter that I write. I beg to move.

Artificial Intelligence (Select Committee Report)

Lord Clement-Jones Excerpts

Monday 19th November 2018 Lords Chamber

Moved by

[Lord Clement-Jones]

That this House takes note of the Report from the Select Committee on Artificial Intelligence AI in the UK: ready, willing and able? (HL Paper 100).

[Lord Clement-Jones (LD)]

My Lords, it was a pleasure and a privilege to chair the Select Committee on Artificial Intelligence. I thank members of the committee who engaged so closely with our subject matter over an intensive nine-month period and achieved such a high degree of unanimity. There were not just the formal sessions but a number of visits and workshops and even a neural network training session, ending with a fair few lively meetings deciding among ourselves what to make of it all.

Despite the limited life of the committee, we have not stopped talking about AI and its implications since, some of us in far-flung corners of the world. I regret that the noble Viscount, Lord Ridley, and the noble Lord, Lord Puttnam, having made such a major contribution to our work, are abroad for this debate.

I place on record a huge thanks to our team of clerks and advisers, without whom this report, which has been recognised as leading-edge nationally and internationally, could not have been written: our clerk, Luke Hussey; Dr Ben Taylor, our policy analyst; Hannah Murdoch, our committee assistant; and Dr Mateja Jamnik, our specialist adviser.

Our conclusions came after nine months of inquiry, consideration of some 225 written submissions of evidence and 22 sessions of fascinating oral testimony. I thank all our witnesses who gave such a great deal of time and commitment to the inquiry. I today thank the Minister who, with the right honourable Matt Hancock, gave extensive oral evidence. Since then, of course, Mr Hancock has been promoted twice. There is clearly a connection.

The context for our report was very much a media background of lurid forecasts of doom and destruction on the one hand and some rather blind optimism on the other. In our conclusions we were certainly not of the school of Elon Musk. On the other hand, we were not of the blind optimist camp. We are fully aware of the risks that the widespread use of AI could raise, but our evidence led us to believe that these risks are avoidable or can be mitigated to reduce their impact.

In considering this, we need to recognise that understanding the implications of AI here and now is important. AI is already with us in our smartphones and in our homes. Our task was,

“to consider the economic, ethical and social implications of advances in artificial intelligence”.

Our 74 recommendations were intended to be practical and to build upon much of the excellent work already being done in the UK, and revolved around a number of threads which run through the report.

The first is that the UK is an excellent place to develop AI and that people are willing to use the technology in their businesses and personal lives. There is no silver bullet, but we identified a range of sensible steps that will keep the UK on the front foot. They include making data more accessible to smaller businesses and asking the Government to establish a growth fund for SMEs through the British Business Bank to scale up their businesses domestically without having to worry about having to find investment from overseas or having prematurely to sell to a tech major. We said that the Government need to draw up a national policy framework, in lockstep with the industrial strategy, to ensure the co-ordination and successful delivery of AI policy in the UK.

A second thread relates to diversity and inclusion in education and skills, digital understanding, job opportunities, the design of AI and algorithms and the datasets used. In particular, the prejudices of the past must not be unwittingly built into automated systems. We said that the Government should incentivise the development of new approaches to the auditing of datasets used in AI and encourage greater diversity in the training and recruitment of AI specialists.

A third thread relates to equipping people for the future. AI will accelerate the digital disruption in the jobs market. Many jobs or tasks will be enhanced by AI, many will disappear and many new, as yet unknown, jobs will be created. AI will have significant implications for the ways in which society lives and works. Whatever the scale of the disruption, a significant government investment in skills and training is imperative if this disruption is to be navigated successfully and to the benefit of the working population and national productivity growth. Retraining will become a lifelong necessity and initiatives, such as the Government’s national retraining scheme, must become a vital part of our economy. We said that this will need to be developed in partnership with industry, and lessons must be learned from the apprenticeships scheme. At earlier stages of education, children need to be adequately prepared for working with, and using, AI. For a proportion, this will mean a thorough education in AI-related subjects, requiring adequate resourcing of the computing curriculum and support for teachers. For all children, the basic knowledge and understanding necessary to navigate an AI-driven world will be essential. In particular, we recommended that the ethical design and use of technology becomes an integral part of the curriculum. I should add that our evidence strongly suggested that the skills requirements of the future will be as much creative as scientific.

A fourth thread is that individuals need to be able to have greater personal control over their data and the way in which it is used. We need to get the balance right between maximising the insights that data can provide to improve services and ensuring that privacy is protected. This means using established concepts such as open data, ethics advisory boards and data protection legislation, and developing new frameworks and mechanisms, such as data portability, hubs of all things and data trusts.

AI has the potential to be truly disruptive to business and to the delivery of public services. For example, AI could completely transform our healthcare, both administratively and clinically, if NHS data is labelled, harnessed and curated in the right way. However, it must be done in a way that builds public confidence. Transparency in AI is needed. We recommended that industry, through the new AI council, should establish a voluntary mechanism to inform consumers when AI is being used to make significant or sensitive decisions.

Of particular importance to the committee was the need to avoid data monopolies, particularly by the tech majors. Large companies that have control over vast quantities of data must be prevented from becoming overly powerful within the AI landscape. In our report we called upon the Government, with the Competition and Markets Authority, to review proactively the use and potential monopolisation of data by big technology companies operating in the UK. It is vital that SMEs have access to datasets so that they are free to develop AI.

The fifth and unifying thread is that an ethical approach is fundamental to making the development and use of AI a success for the UK. A great deal of lip service is being paid to the ethical development of AI, but we said that the time had come for action and suggested five principles that could form the basis of a cross-sector AI code. They should be agreed and shared widely and work for everyone. Without this, an agreed ethical approach will never be given a chance to get off the ground. We did not suggest any new regulatory body for AI, taking the view that ensuring that ethical behaviour takes place should be the role of existing regulators, whether the FCA, the CMA, the ICO or Ofcom. We believe also that in the private sector there is a strong potential role for ethics advisory boards.

AI is not without its risks, as I have emphasised, and the adoption of the principles proposed by the committee will help to mitigate these. An ethical approach will ensure that the public trust this technology and see the benefits of using it. It will also prepare them to challenge its misuse. All this adds up to a package that we believed would ensure that the UK could remain competitive in this space while retaining public trust. In our report we asked whether the UK was ready, willing and able to take advantage of AI.

The big question is therefore whether the Government have accepted all our recommendations. I must tell your Lordships that it is a mixed scorecard. On the plus side, there is acceptance of the need to retain and develop public trust through an ethical approach, both nationally and internationally. A new chair has been appointed to the Centre for Data Ethics and Innovation and a consultation started on its role and objectives, including the exploration of governance arrangements for data trusts and access to public datasets, and the centre is now starting two studies on bias and microtargeting. Support for data portability is now being established. There is recognition by the CMA of competition issues around data monopoly. There is recognition of a need for,

“multiple perspectives and insights ... during the development, deployment and operation of algorithms”—

that is, recognition of the need for diversity in the AI workforce. And there is commitment to a national retraining scheme.

On the other side, the recent AI sector deal is a good start, but only a start towards a national policy framework. Greater ambition is needed. Will the new government Office for AI deliver this in co-ordination with the new council for AI? I welcome Tabitha Goldstaub’s appointment as chair, but when will it be up and running? Will the Centre for Data Ethics and Innovation have the resources it needs, and will it deliver a national ethical framework?

There was only qualified acceptance by the Department of Health of the need for transparency, particularly in healthcare applications. In the context of the recent DeepMind announcement that its Streams project is to be subsumed by Google and, moreover, that it is winding up its independent review panel, what implications does that have for the health service, especially in the light of previous issues over NHS data sharing?

The Department for Education was defensive on apprenticeships and skills shortages and appears to have limited understanding of the need for creative and critical thinking skills as well as computer skills.

The MoD in its response sought to rely on a definition of lethal autonomous weapons distinguishing between automated and autonomous weapons which no other country shares. This is deeply worrying, especially as it appears that we are developing autonomous drone weaponry. I would welcome comment by the Minister on all those points.

Some omens from the Government are good; others are less so. We accepted that AI policy is in its infancy in the UK and that the Government have made a good start in policy-making. Our report was intended to be helpful in developing that policy to ensure that it is comprehensive and co-ordinated between all its different component parts.

By the same token, I hope that the Government will accept the need for greater ambition and undertake to improve where their response has been inadequate. I beg to move.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, every Select Committee hopes for a debate as good as this one. The noble Lord, Lord Stevenson, pointed out the exceptional number of non-committee members who have taken part. That is a sign of the quality of today’s debate and the points made. Noble Lords showed expertise in so many different sectors: healthcare, defence, film, industry, financial services and the future. Not all noble Lords have recently published books on the future, but the contribution from the noble Lord, Lord Rees, was much appreciated.

Nearly all speakers emphasised the need for momentum in developing not only AI but the ethical frameworks that we need. Quite frankly, we are still in the foothills. The issue will become of greater importance as we combine it with all the other technologies such as the internet of things and blockchain. We need to be absolutely clear that our policy must be active. We must also have the means of scrutiny. I hope that the House will come back to this, perhaps in one of the other Select Committees, rather than an ad hoc one. As things move on so quickly in this area, we need to keep abreast of developments. The mantra that I repeat to myself, pretty much daily, is that AI should be our servant not our master. I am convinced that design, whether of ethics, accountability or intelligibility, is absolutely crucial. That is the way forward and I hope that, by having that design, we can maintain public trust. We are in a race against time and we have to make sure we are taking the right steps to retain that trust.

I thank all noble Lords for this debate. This is only the first chapter; there is a long road to come.

Motion agreed.

Brexit: Creative Sector

Lord Clement-Jones Excerpts

Wednesday 20th June 2018 Lords Chamber

[Lord Henley]

My Lords, my noble friend is right to highlight the importance of this sector, and I want to emphasise just how big the creative industries are as an exporting sector and in terms of what they produce in this country. I stress, as I did at the beginning, that much of our reciprocal copyright protection is underpinned by international law, but obviously there are parts that need protection that involve EU-UK law. That will obviously be a matter for our future relationship, and that is a matter for the ongoing negotiations taking place at the moment.

[Lord Clement-Jones (LD)]

My Lords, has the Minister read the document from the Intellectual Property Office entitled IP and Brexit: The Facts? There are no facts in it. It says that the Government recognise the concerns of IP professionals, and recognise that owners of registered community design rights “want clarity”. On trademarks, it says that the Government,

“is looking at various options”,

and similarly on the exhaustion of rights. Is it not high time that the Government showed some leadership on IP matters and delivered some certainty to those who need it?

[Lord Henley]

My Lords, the noble Lord and I, and others in the House, debated this matter when the noble Lord had a Question on it, I think, back in March. As I said then and as I repeat now, this is obviously a matter for the ongoing negotiations. The noble Lord will have to wait for the White Paper, which will be coming out shortly. We can then deal with these matters in the negotiations, but as I made quite clear, much of our protection that is already there is underpinned by international law. As I also stressed, we have a pretty good intellectual property regime in this country as it is.