Enterprise and Regulatory Reform Bill

Lord Howarth of Newport Excerpts

Monday 28th January 2013 Grand Committee

[Lord Smith of Finsbury]

My Lords, I support very strongly both the new clauses in front of us, but especially that proposed in Amendment 28C. I declare an interest as a non-executive board member of PPL, the collecting society for broadcast music rights, and also a rather minor member of the Authors’ Licensing and Collecting Society. I have one even more important interest and that is as a passionate believer in the importance, economic value and the future of the creative industries in this country. Intellectual property and the copyright that protects the value of that intellectual property are at the very core of the economic importance of those creative industries.

The creative industries represent something like 7% or 8% of our GDP these days. Even at a time of recession they remain strong and, in many respects, growing. They are incredibly important for us as an advanced industrial country because they are where much of our wealth creation is going to come from over the years and decades ahead.

For the creative economic sector, intellectual property is where that wealth resides. We have to make sure that we protect and nurture that intellectual property securely. That is why having a champion for the value of intellectual property such as is proposed in the amendment would be transformative in ensuring that our Government, Parliament and the world in general take intellectual property more seriously than they sometimes do at the moment.

Sadly, the report from Professor Ian Hargreaves was deeply disappointing in this respect. It contained a number of serious flaws and was based on flimsy evidence. The report from Richard Hooper was considerably better. I hope that the Government will take forward many of the proposals from Richard Hooper's report rather than placing too much reliance on the Hargreaves report.

Having a champion for intellectual property rights would be of great importance and great value. I do not think that the IPO could do it. The IPO is part regulator and part registrar. Its job has not until now been seen as being a promoter of the value of intellectual property. If the Government said, “We do not need a separate director-general: we will give this duty to the IPO”, I confess that I would be deeply worried. The work of the IPO has fallen down in much of its analysis and work recently. We have only to look at the glaring errors, for example, in its recent Collecting Societies Codes of Conduct document to see that it would not necessarily be the right place to put this responsibility.

Having a director-general with this very specific task, with a direct line through to Ministers, would be a far better solution for this vital section of the UK economy. We need the advocacy—the championing—that can come from such a role.

[Lord Howarth of Newport]

My Lords, I enter a note of caution. I feel as strongly as everyone else about the importance of intellectual property—that we should generate and protect it. That is a key dynamic of our economy and our creative economy in particular. However, I have some reservations about the proposition, as framed by the Alliance for Intellectual Property and as developed and powerfully articulated by the noble Lords, Lord Jenkin and Lord Clement-Jones, and the noble Baroness, Lady Buscombe. It seems to me that the specific remit of the proposed director-general of intellectual property rights as set forth in the amendment is insufficient and unbalanced. I am not opposed to anything contained within the proposed new clause, but if the Government are to create a functionary whose job it is to promote rights, it is important that the remit of that person and office should be balanced.

Everything that is proposed in the amendment for the director-general to do is directed towards advancing the interests of the creators and owners of intellectual property rights. That is fine in itself but there are also, very importantly, the interests of consumers and users. Ultimately, all of us believe that there is not a reason. If we have an appropriate regime for the promotion and protection of intellectual property rights, the whole of society will benefit, and I do not dissent from that. But in the near term or even the medium term, there are, as we know, tensions.

In the debate that the noble Lord, Lord Lucas, introduced for us as we reached Part 6 of the Bill he rightly stressed the responsibility that we all have as legislators to ensure that the new legislative regime is balanced and that the legitimate interests of all concerned are recognised. If we were to have a director-general of intellectual property, it should also be part of his duty to promote the broader public interest—something that we shall return to repeatedly in our debates on aspects of the clauses in Part 6 of the Bill.

On the other hand, if the remit of this office is as so far proposed by noble Lords, I do not see why the creators and owners of intellectual property should not themselves establish, fund and provide other support for their own champion. That would be entirely appropriate. But the role of government is all the time to seek to balance legitimate interests when they are in any degree of competition or tension. I am not against having a director-general, but further thought is needed. Perhaps a more generous and inclusive definition of the responsibilities of the director-general would be more appropriate.

The other new clause, proposed in Amendment 28D tabled by the noble Lord, Lord Clement-Jones, suggests that there should be an annual report on copyright licensing. That is an entirely good idea and I am happy to support it.

[Lord Lucas]

My Lords, I join the noble Lord, Lord Howarth, in everything that he said. It is important that the Government hold the ring on this. I take my views on copyright from Macaulay—it is a bargain between the producer and consumer. It is a bargain that needs to be kept balanced. A lot of good will flow from that balance. I would not have a director-general of copyright who looked after only the producers any more than I would have bank regulation that favoured only the banks. It is a matter of balance.

If we want to look at what goes wrong when the producers are in charge, we can look back at the history of the music industry and the way that it reacted to Napster. It made a mess of that. Rather than seizing on a new opportunity, it wanted to entrench its rights against the consumer. The industry was rolled over and a jolly good thing too.

Martin Mills is a hero of mine and I am delighted that he is defending copyright so strongly. I am sure that he is right in what he said, but it does not come down to a case of a lack of balance. We as a Government should feel able to enforce copyright strongly because the copyright owners are giving our people what they want—not trying to withhold stuff from them, fail to give them what they want or hold them to ransom, as was the case in that phase of the music industry.

I am entirely in favour of the amendment of the noble Lord, Lord Clement-Jones. What is being done on the copyright hub is of immense importance. I am a copyright producer and user. In both aspects I would be a keen user of the hub. It is a great chance for Britain to be at the start of this and to put ourselves at the centre. If there is anything that we as legislators can do on this to keep the Government’s foot on the gas pedal and pressed firmly pressed to the floor, we should take that opportunity.

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[Lord Clement-Jones]

My Lords, I support Amendment 28DZA in the name of the noble Lord, Lord Stevenson. I agreed with much of his introduction, the broad sweep of which was impressive given the nature of these amendments. He commented that exceptions will be introduced by secondary legislation. I associate myself with those remarks. I do not believe that secondary legislation is the right way to introduce those exceptions. It should be done by primary legislation.

That said, it is worth unpacking the metadata amendment slightly because I think that exactly how the amendment would operate should be on the record. Section 296ZG of the 1988 Act, which was inserted in 2003, provides protection for electronic rights management information by giving a cause of action to rights owners when such information is removed or altered by a third party without authority, provided that the third party has the necessary mental element—that is, that it knowingly and without authority removes or alters electronic rights management information.

The amendment seeks to deal with the specific problem that arises when copies of works or other subject matter are gathered by an automated process. It has particular relevance to the actions of search engines and other operators who “spider” the world wide web. Because copies are gathered and often stored or processed by an automated process, no human mind will normally read rights management information which is associated with or embedded in the protected subject matter. The law is presently unclear about the circumstances in which the operator of the automated process will be deemed to have rights management information drawn to his attention. Therefore, the amendment seeks to provide certainty in this regard. It does not expand the scope of any rights belonging to the copyright holder or other right holder. A person gathering materials is free to disregard any restrictions which may be communicated by means of rights management information if, for example, the acts he is carrying out are protected by a fair dealing defence or for any other reason do not fall within the scope of the copyright or other right.

Subsection (1) makes it clear that the effects of the proposed new clause are restricted to persons who gather or access copyright or other protected materials in the course of a business. Therefore, the circumstances in which consumers might be affected by any restrictions in electronic rights management information are outside the scope of the proposed new clause and remain governed by the law at large.

As the Minister may know, the amendment is supported by a large number of members of the creative industries. There is a strong view that metadata is crucial for the future of copyright protection, that it is central towards an efficient, effective and robust licensing system, that it has part of the solution to diligent search for orphan rights and orphan works, and that it is also helpful in terms of pseudonymous works.

I end by quoting the noble Baroness, Lady Buscombe —I often trawl through the internet to find her best quotations. This one is particularly apt in this set of circumstances. It comes from a House of Lords debate in June 2005:

“For those who make photography their life’s work, protecting their copyright goes beyond the emotive; it is their livelihood. Without adequate protection the photographic image—tomorrow’s cultural heritage—and those who create it will cease to have true value, and without adequate protection a profession dies. Photographers are concerned that, in the digital age, information supplied with the digital image about copyright and the creator is stripped away, often automatically, so that in a matter of moments the world is awash with ‘orphan’ images”.—[Official Report, 22/6/05; col. 1690.]

That was in 2005. We have not done anything about that issue but the passage of this Bill provides a chance to do just that.

[Lord Howarth of Newport]

My Lords, my noble friend has done well to raise the question of metadata in his amendment. I think that we need to be extremely careful about how we legislate on this, whether in primary or secondary legislation. Until such time as the technical means to counter the well known abuses of the intellectual property for digital photography by stripping metadata have been found, we should certainly be cautious, to say the least, about how we proceed to license digitally photographed works on the basis that they are orphan works.

My noble friend Lord Stevenson has also done us a good turn in fixing our attention on the question of what should be legislated in primary legislation and what should be left to secondary legislation. Will the Minister in due course comment on some questions of practicality and principle in this regard?

In what I am going to say, I make absolutely no criticism of the Minister personally. He has only just become Minister for Intellectual Property. I wish him very well indeed in that responsibility, and I hope he stays there until May 2015, and no longer. I wish him well during his incumbency, and the continuity that he may enjoy will undoubtedly be valuable for all concerned. Would it not have been more satisfactory if, when we came to consider clauses in primary legislation seeking to update the law on copyright, we also had before us at least an advanced draft of the secondary legislation to which the primary legislation would give authority? It is very difficult for us to know how to amend primary clauses and what view to take, all in all, about the Government’s proposals in the Bill if we do not know what the secondary legislation might look like as it will flesh out the relatively simple legislative propositions in the Bill.

I remember when it became clear that Clause 43 of the Digital Economy Bill was not going to make it to the statute book because of the imminence of the general election in 2010. I pleaded with the department that as it continued to wrestle with these policy issues it should move towards exhibiting draft regulations at the same time as it exhibited draft primary legislation so that all this could be put out to consultation together once it had been considered with the expert groups, such as those that the Intellectual Property Office is meeting at present. That was three years ago, and it seems to me that the House, and Parliament as a whole, is entitled to expect that the Government had made better progress on preparing the primary and secondary legislation before they presented it to us.

I was the government Whip in the Commons on the Copyright, Designs and Patents Bill 25 years ago, and I think it is fair to say that that legislation was somewhat less bald, somewhat less framework, and attempted to contain a more substantial body of legislative provision. The spirit in which both Houses of Parliament worked on that legislation 25 years ago was entirely collegiate. There was no party politics in it at all. We were all simply seeking to work our way forwards to find an appropriate legislative solution. Our deliberations and conclusions were observed with very great interest in other countries. We can continue to legislate in that spirit, but it would have helped us if the Government had allowed us to know a little more about what the primary legislation would open the way to.

While I reject the suggestions that have been put to us in some of the otherwise very helpful briefings that we have received that Parliament virtually does not scrutinise secondary legislation, I think that the situation, at least in this House, is significantly better than that, and we ought to pay tribute to the committees of this House that examine the quality and appropriateness of secondary legislation. We all know that it cannot be amended, and a great fuss is made if a statutory instrument is rejected by the House, so although we are not quite presented with a fait accompli when we consider secondary legislation, it is not a particularly satisfactory manner of advancing the frontiers of legislation. Much more exposure in draft and much more consultation—I know we will have it in due course—would be preferable at this stage. The Minister has perhaps not had an opportunity to consider this question of process as yet, so I hope that, not today, but at some point, he will feel able to offer some comments on it.

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[Viscount Bridgeman]

My Lords, I speak to Amendment 28DZB, which has been so ably covered by the two movers of the amendment. I support this amendment as far as it goes, but it needs to make the distinction between incidental use, such as a passing shot of a chair on a TV programme, and one with a wider agenda—for example, financial or political. A well known example of the latter is the case about two years ago brought by Unilever, owners of the Marmite brand, against the BNP, whose image of a Marmite pot was a major feature on the BNP website. This resulted in an out-of-court settlement in favour of the plaintiffs. I hope that the Minister will take note of this proposed adjustment to the amendment.

[Lord Howarth of Newport]

My Lords, I support Amendment 28DZB. My noble friend Lord Stevenson of Balmacara has explained to the Committee why the jurisprudence of the European Court of Justice does not require after all that the Government repeal Section 52. I hope that the Government will think again very carefully about what they are doing.

I commend to the attention of the Minister and his officials the submission that other noble Lords will have received from Professor Lionel Bently of the University of Cambridge, which deals authoritatively with this matter. There would be significant and seriously unfortunate implications for teachers, publishers, museums, photographers, artists and filmmakers.

I echo and endorse the points very well made just now by my noble friend Lady Warwick. The impact on the practical ability of teachers of design to teach their discipline properly would be very damaging. If we undermine the teaching of design in this country, we do deep damage to the creative economy and make it less likely that new copyright and intellectual property will be developed for the benefit of our culture and our economy in the decades that lie ahead.

[Baroness Brinton]

My Lords, I particularly support the comments made just now by the noble Baroness, Lady Warwick, and the noble Lord, Lord Howarth of Newport, on how the proposals would affect teachers in schools, colleges and universities. We have already heard that in order to use any type of digital information, users will need to apply for a licence. In addition to teachers, publishers reproducing photographs of industrially produced articles or museums and archives wanting to display them will also require licences. Along with other noble Lords, I am concerned that this will stifle the development of the creative sector, which is vital to the growth of the economy. There needs to be a balance between what is trying to be achieved and the practical problems that teachers and others would face.

I am also concerned that the government impact assessment focuses solely on commercial designs—as was pointed out by the noble Lord, Lord Stevenson—particularly replica furniture and other household goods. It is essential that non-commercial users are also consulted; they are currently covered by Section 52 of the CDPA, as has been mentioned. Those would include academics, museums, archives, libraries and publishers to make sure that the repeal of this provision does not have a negative, unintended consequence.

On Amendment 28EB, I am grateful for the reference by my noble friend Lord Clement-Jones to props in theatre. Unfortunately, the second paragraph of his amendment would create a practical problem. Before I went to Cambridge, I was a stage manager at the BBC. When you ordered a prop, you ordered it in one of three forms. It was either fully practical, for example a phone that would ring and you could speak to somebody; practical, so that you could pick it up and it would look and sound like the real thing; or non-practical—basically wood painted to look like the required item. All three of those were an identical telephone. Unfortunately, the clause would create a real problem, because the intention was to produce the article, as defined here, with no intention at all to infringe any copyright. I suspect that, with phones being so cheap these days, people do not go to the bother that they used to in the early and mid-70s when I was carrying out these orders, but there are plenty of other things within the creative sector that would be caught by this unintentional consequence.

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[Lord Jenkin of Roding]

My Lords, I added my name to the noble Baroness’s amendment. I, too, have had representations from the organisations that represent designers, and emphasise one point made by the noble Baroness: that many of these replicated designs are not made in the EEA, and certainly not in the UK. One group conducted considerable research on this subject and discovered that quite often a UK name is linked with the design, but that when you go behind that you find that it is largely a sham. It is quite clear that all this comes from abroad, so merely repealing Section 52 by itself will not achieve the Government’s intentions. As for their representing it as being of considerable value to designers, I have to say that without the two amendments in this group which the noble Baroness has tabled, it will be largely ineffective.

I hope very much, therefore, that the Government will feel able to accept these amendments. As the noble Baroness said, they complete the reform which the repeal of Section 52 is intended to provide. They add nothing that is extraneous to it, they merely make it effective, and I am sure that that is what the Government want. I hope very much that my noble friend the Minister will feel able to give these amendments a fair wind.

[Lord Howarth of Newport]

My Lords, I oppose these amendments. It seems to me that the extension of copyright design from 25 years to life plus 70 years is altogether excessive. That could amount to something like 120 years, and it would be particularly unfortunate if we were to extend the proposed provisions to apply to designs created before 1957. I entirely support the principle of a fair return to designers and to their estates, but it seems to me that 25 years is sufficient. I am not in favour of protecting the monopoly of the purveyors of Eames chairs, which my noble friend Lady Whitaker cited as an instance, or indeed of Eileen Gray chairs or any other famous and beautiful designs that would be affected by this amendment. It seems to me that the prices that are charged to people who want to buy these pieces of furniture are quite outrageous. I ask my noble friend Lady Whitaker in particular why good design should be available only for the rich? I want to see Eames and Gray designs for the masses.

I further note that the proposals in these amendments are protectionist. That does not seem to me to be particularly constructive. They are keen to keep out replicas that might be made elsewhere. If we were not to perpetuate beyond 25 years the inhibition on manufacturing and retailing in this country, we would do good to a significant sector of our economy and we would enable the quality of life of a significant number of people to be significantly improved. So personally I do not favour the amendments that have been proposed.

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[Lord Jenkin of Roding]

My Lords, I wish to speak briefly to Amendment 28JA. The noble Lord, Lord Clement-Jones, and I have discussed the issue of separate statutory instruments for each exception. As he said, they may have totally different effects and it would be quite difficult for the House to debate one single compendium of exceptions when they may involve very different interests and very different impacts. Mentioning impacts leads me to say that, if there are to be separate statutory instruments for each change passed under this clause, there should be separate impact statements.

Some weeks ago, I collected the impact statement for this Bill from the Printed Paper Office. I have not attempted to weigh it but it is about two inches thick and I must confess that I have not waded through it. Of course, the Bill contains a whole range of issues but one realises that, when departments produce impact assessments on this scale, you have to be a very devoted Peer and have plenty of time to be able to make anything of them. I suspect that some of the changes that may be envisaged as being achieved by order under this clause may be wholly unexceptionable, in which case so be it. However, there may be some which will be very controversial and should be properly debated, in which case they should have a separate impact assessment. That is the burden of the amendment to which I have put my name and I hope that the Minister will take account of it when he responds.

[Lord Howarth of Newport]

My Lords, the noble Lord, Lord Jenkin, is the most diligent of parliamentarians. If he has not been able to read the impact assessment from start to finish, that illustrates that we have problems in achieving satisfactory scrutiny of legislation.

I support Amendments 28H, 28J and 28JA because I agree with noble Lords who have already argued that it is important that we should look at the relevant statutory instruments one by one, in so far as that is realistic and practical.

I believe that it is realistic and practical for Parliament. There may be problems in that, as has already been suggested, the material contained within different statutory instruments may overlap with other statutory instruments to a degree, in which case one must proceed pragmatically. But it is right in principle that Parliament should have the maximum opportunity to examine secondary legislation. One could say that the more minimalist the primary legislation the more important it is to ensure that the secondary legislation that stems from it is thoroughly scrutinised.

We can be a little too defeatist in Parliament about the scope for satisfactory scrutiny of statutory instruments. When I was in the House of Commons, time was all too limited for examining SIs. As a self-regulating House, we are better placed to ensure that we examine statutory instruments more thoroughly in this House. We have committees of the House that take it upon themselves to do a lot of preliminary work on our behalf. There is a disposition and a considerable ability in your Lordships' House to do this job properly.

We cannot overstate the importance of some of this secondary legislation. The creation of new exceptions to copyright law can have a major bearing on the livelihoods of large numbers of people and on the performance of significant sectors of our economy. We owe it to the public whom we serve that we take the greatest care to ensure that these exceptions are properly formulated.

The presumption should be that each one is embodied in a separate statutory instrument and carries with it a separate impact assessment, which I hope will then be on a scale that the Minister and all the rest of us would be able to manage. I hope that the Minister will be able to give a full and formal assurance that this will be the approach of the Government.

[Lord Stevenson of Balmacara]

My Lords, I add my thoughts to those that have already been expressed about these issues and have some specific questions in relation to Modernising Copyright: A Modern, Robust and Flexible Framework, the latest publication dealing with the way in which copyright exceptions are to be brought forward, which was published in December 2012.

We have been blessed with substantial impact assessments. Indeed, we have discussed them. Unfortunately, I dropped mine on my foot as I was coming out of my office today and I am still limping as a result. It was really quite heavy. But it was very valuable because I have been reading it and I have got a lot out of it as has been clear in the comments made so far. One of the themes that we have discussed in this series of debates today is how copyright legislation should go forward. In particular, the example that we have had to use, because it is current, is that of the Hargreaves recommendations.

The Government's proposals, as outlined in their modernising copyright report, are that:

“The Government intends to legislate for a new system of permitted acts for copyright works, incorporating the changes discussed in this document. These changes need to be carried through consistently. In the light of stakeholder comments about the degree to which the existing Copyright Act has been amended since 1988, the Government will therefore introduce the system for Parliamentary approval en bloc rather than piecemeal, through the smallest possible number of Statutory Instruments”.

That is not what we are arguing for. We are saying in our amendments that we want more time and more discrete information to be provided. I would be grateful if the Minister, when he responds, could analyse why the Government have said that in relation to the points that we have made.

The Government go on to say that publishing statutory instruments en bloc,

“will help the system be clear and consistent”,

but we would argue quite the reverse. The Government then say:

“For this reason, the Government proposes that all the measures take effect at the same time, the intention being that they come into force in October 2013”,

which is a relatively short time in parliamentary terms. It will be difficult for us to get through all this in the appropriate way, given the sensibility of the discussions.

I support the amendments in this group. We discussed these issues when they were raised in a number of earlier areas. The Government must be in absolutely no doubt at all that these issues are large in the minds of those who have been corresponding with us. It would be useful if we could have a proper statement from the Minister on how things will go forward.

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[Lord Howarth of Newport]

Does the noble Lord not think that we should be asking a little more from the Minister? We should be asking for an assurance that the presumption will be that statutory instruments will not be bundled and that they will be taken together only when there is a compelling reason by virtue of the interrelatedness of their contents.

[Lord Clement-Jones]

That is a very fair formulation. Certainly, I was also reassured that the Minister confirmed that there would be an impact assessment for each and every one of the uses of the ECA in these circumstances. I look forward to the proper use of House of Lords scrutiny in these circumstances, to which the Minister alluded, because our scrutiny would be extremely valuable. The interpretation that I put on the Minister’s very useful assurances is very much that formulated by the noble Lord, Lord Howarth, so perhaps if the Minister disagrees with that he could indicate that at the same time.

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[Lord Clement-Jones]

My Lords, in moving Amendment 28KA, I shall speak also to Amendments 28LA and 28LB. These amendments provide for implementation of the EU orphaned works directive in substitution for the Government’s proposals. The directive provides for non-commercial use of orphan works by cultural institutions. Although the permitted use is non-commercial, the directive allows sales to recover costs. The major question here is why we are going further than the EU orphan works directive, which EU countries have to implement within two years of this September when the directive was passed. It specifically makes provision for museums, galleries, archives and libraries, educational establishments and public service broadcasts to make use of orphan works. These are all essentially cultural institutions. It may not be a perfect directive at this stage, but surely if it will apply in 27 countries, we should build on it. We can, of course, use the new digital hub to good advantage when applying the provisions of the directive.

The Government’s proposals under Clause 68 go much further by permitting exploitation for commercial purposes, which is a matter of real concern to many, particularly the creators of images, where the metadata has been stripped and attribution lost. That is the reason that equivalent provisions failed to get through Parliament under the Digital Economy Bill before the previous general election.

Has no account been taken of photographers’ strong concerns, voiced during the passage of the Bill and in the Hargreaves consultation? The impetus for orphan work licensing comes largely from cultural institutions. The provisions of the directive, therefore, should largely satisfy the need for orphan licensing among those institutions. On 13 September 2012, the orphan works directive was passed, and it must be implemented within two years. Digitisation for preservation and replacement of any work and supplying copies of unpublished work to other libraries, unless the author has forbidden it, is already permitted under current UK copyright law.

On the other hand, the proposed measure in Clause 68 is designed to make orphan works available for commercial exploitation. That measure would deprive rights holders of their property simply because they have not been found by the would-be user of their work, although the Government have not yet formulated the rules and do not intend to publish them until after the measure has been enacted. Being exercisable by secondary legislation, they will not be fully subject to parliamentary scrutiny.

Those are some of the problems which are not dealt with in the measure. Many works contain other copyright works, such as photographs or illustrations. Unlike the EU directive, there is nothing to protect the owners of those copyrights if the overall work is declared an orphan. Diligent search has been used in a number of fields for many years and produces a high level of false orphans. That is because copyright does not have to be registered and there are no definitive registries of the ownership of copyright works. Some types of works, such as photographs and illustrations, are especially easy to separate from the information about their creators—I mentioned the issues about metadata earlier. In particular, foreign copyright holders are likely to be unaware of the provisions and so will be more likely to lose out as others exploit their works commercially in the UK. Primary legislation should not allow orphan works provisions beyond the EU orphan works directive until it has been drafted to give the same standard of protection to creators as are provided under the directive.

Great concerns have been expressed not only by photographers but by a whole range of others, such as AP, British Pathé, Getty Images, ITN, the Press Association and Thomson Reuters, which are UK, European and worldwide news agencies and audiovisual archives; and FOCAL International, which is the industry body representing commercial and audiovisual archives throughout the world.

The provisions in the clause are premature and should not be introduced in the Bill. If there are flaws in the directive—there may well be—surely we should work on them rather than erecting a totally separate definition of orphan works, which will have few equivalents anywhere else in the world and will certainly be of no use in international rights clearance. I beg to move.

[Lord Howarth of Newport]

My Lords, I shall speak to Amendments 28LA and 28LB, which the noble Lord, Lord Clement-Jones, has introduced. I see these issues very differently from the way that he does. I am sure that he would agree that it would be a pity if we in the Committee excessively polarised the interests of contemporary creators against those of our great cultural institutions and the public, who benefit from the work of those institutions and could benefit so much more if a larger part of their collections were to be made accessible.

The simple answer to the question raised by the noble Lord, both on Second Reading and just now—why we should go beyond the provisions of the European Union orphan works directive—is simply that the directive does not go far enough; it is too limited. Only public sector bodies and educational establishments, not companies, can benefit. That means that public/private partnerships are prevented. Even cultural bodies, are prevented from working in partnership with the private sector. Mass digitisation, which would confer very great benefits for the public, is best carried out with private sector contractors and partners. In that way, the production is made possible for global educational markets.

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[Lord Howarth of Newport]

My Lords, these amendments have at least enabled us to discuss some very important issues. I want to concentrate on the question of diligent search. Whether the proposed United Kingdom orphan works licensing scheme will work depends on whether the regulations ensure that the requirements for diligent search are proportionate and manageable. Unless the time and cost of diligent search are reduced in appropriate circumstances for cultural and academic institutions they, for the most part, will not bother to attempt to use the orphan works in their collections. The noble Baroness, Lady Brinton, briefly described the scale and quantity of orphan works that it is believed are in our national collections. It is thought, for example, that some 50% of archive collections consist of orphan works. There are three very interesting and helpful pages in the impact assessment. I keep on praising the impact assessment—counter-culturally—which gives instances of the scale of orphan works in particular collections and the prodigious volumes of time, effort and cost that would be required to perform a diligent search item by item on all of them.

If the regulations are to be proportionate, they will take account of the nature of the work in question, for example whether it was originally produced for commercial purposes or was unpublished; the use that is proposed for the work—whether, for example, it is intended that there should be free access to it for educational or cultural benefits to the public; a realistic assessment of any risks to potential rights holders; and the feasibility of tracing rights holders. I understand it is the Government’s intention that there should be proportionality in the way the regulations stipulate the requirement for diligent search. However, I would be grateful if the Minister could enlarge on the Government’s intentions in this regard. I hope he will be able to give some comfort to those of us who believe it is important to remove unnecessary obstacles to making orphan works accessible.

Amendments 28M and 28N are totally unrealistic. To require a diligent search for each individual work, regardless of the practicalities, would make digitising orphan works in major areas impossibly time consuming and expensive. Therefore, that would be unreasonable and disproportionate. I hope that my noble friends will not wish to pursue amendments to that effect. I hope the Minister will be able to give us comfort in what he tells us about the Government’s intentions in this area.

[Baroness Warwick of Undercliffe]

My Lords, I also comment on the question of diligent search. I agree that we need clarification about what will constitute diligent search, but I would worry if we set the bar too high, and these amendments ask us to set a very high bar indeed. Many noble Lords appreciate the time and effort involved in tracing the authors of some categories of work. It is essential that this is proportionate to the type of material involved and the likelihood of finding the owner.

As my noble friend Lord Howarth has said, if we do not establish a proportionate system, the requirement will act as a disincentive to use this legal route for using orphan works. Users will either risk infringement by using works without a licence, as some currently do now, or decide not to use the work at all. We have talked a lot about balance this evening. Clearly, we need the right balance in this case. That is the way the working group is already moving and that is the right approach.

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[Lord Clement-Jones]

If I can clarify, we are still on orphan works amendments, which are designed to improve the orphan works provisions in the clause.

[Lord Howarth of Newport]

Before the Minister responds, the noble Baroness, Lady Blackstone, apologised that she had to depart from the Committee because of a commitment, but she asked me to say that, as chair of the British Library, she associated herself with the points that I put forward in my remarks.

[Viscount Younger of Leckie]

My Lords, the amendments cover both the scope and detail of the proposals for a UK orphan works scheme. Amendment 28L would limit who could be authorised to grant licences to use an orphan work and de facto would mean that only a collecting society already operating in the sector could be authorised to grant licences. The amendment assumes that all orphan works will be licensed by collecting societies. However, many orphan works are simply not of a type that is licensed collectively—unpublished works, diaries, old photographs and oral history recordings, for example. There will therefore need to be a separate independent authorising body for orphan works which are not covered by any collecting society.

Amendment 28M seeks to make clear that the orphan works scheme applies to a work where there are multiple rights owners and one or more of these are not known or cannot be traced. The Bill already makes provision for this. The requirement for a diligent search for the copyright owner will be described in greater detail in the regulations. This will include all relevant rights-holders where there is more than one.

Amendment 28N would mean that a separate diligent search had to be undertaken for every orphan work that someone wants to use. The clause already provides that a work must have been subject to a diligent search for the rights holders before it can qualify as an orphan work. However, requiring a separate diligent search for each individual orphan work could result in potential licensees having to conduct repetitious searches. For example, five poems by the same poet whose name is known, published by the same publisher, would require five separate diligent searches.

Amendment 28P is concerned with creators who have assigned some or all of their copyright in a work that goes on to be a suspected orphan work. The diligent search for rights holders will cover all potential rights holders in a work, including the creator. This amendment would also provide an author with a new right to remuneration for the use of an orphan work, even when the author had assigned the relevant copyright in the work to someone else. Only those who are rights holders will be entitled to remuneration for the use of an orphan work. This is exactly the same as for non-orphan works.

Amendments 28Q and 52 seek to clarify what the term “authorised” means in this subsection. In particular, they seek to ensure that those authorised to license orphan works cannot grant themselves a licence. This is an important point and one on which the clause is already clear—in new Section 116A(5)(c) introduced in Clause 68. Any body authorised to issue orphan works licences cannot license themselves to use an orphan work.

Amendment 28R would mean that a licence to use an orphan work must be time-limited and not run beyond the copyright term in a work. I can confirm that regulations will provide for limits for orphan works licences. These will be appropriate to the type of use being licensed and could be a time limit or a limit according to intended use—for example, a print run. In reality, sometimes it will not be possible to tell whether the copyright in an orphan work has expired.

My noble friend Lord Clement-Jones spoke to Amendment 28S, which I shall address at this point. The amendment seeks to clarify that orphan work licences can be granted even when it is not known whether an exclusive licence has been granted. An orphan works licence may be granted where a diligent search does not find all the relevant rights holders, including an exclusive licensee. The noble Baroness, Lady Warwick, raised this particular issue. Where the diligent search reveals the existence of an exclusive licence, the work will not qualify as an orphan work. Where an orphan works licence is granted following a diligent search but subsequently an exclusive licence holder appears, the exclusive licence holder will be treated in the same way as any other absent rights holder that appears. The detail of this will be set out in the regulations. That is why the clause specifically applies to cases where it is uncertain where the copyright subsists.

I turn to Amendment 30. This concerns the very important issue of remuneration being set aside for rights holders when an orphan works licence is granted. I can set on the record that the regulations will provide for the treatment of remuneration. I also draw my noble friend’s attention to the wording in the clause:

“The regulations must provide for the treatment of any royalties or other sums paid in respect of a licence”.

I believe that the term “royalties” is not used in all sectors but it is understood in the Bill to mean the same as “remuneration”. The phrase “other sums” would also cover any other types of fees to be set aside for rights holders. Therefore, the Government’s view is that the clause already provides for remuneration to be dealt with by the regulations.

I should like to pick up one point made by the noble Lord, Lord Howarth. He asked whether there will be proportionality in undertaking a diligent search. I hope that I have that right. Much work is already being undertaken in diligent search work for different types of work. This is being considered by the working group, which includes representatives of museums, libraries and archives.

I hope that in the light of the explanations and assurances that I have given, the noble Lord will agree to withdraw the amendment.

--- Later in debate ---

[Baroness Buscombe]

I rise briefly, given the hour, wholly to support the amendments tabled by my noble friend Lord Clement-Jones. This is an area that I focused on in my Second Reading speech. Without wishing to repeat what my noble friend said, there is something rather disingenuous about saying that this system is voluntary but, at the same time, you have to opt out. I know there is huge concern across the industry with regard to this clause on extended collective licensing. It is important that the Government recognise that there needs to be more clarity around how this system would work. There are big questions about how much such a scheme would be policed and regulated with, I understand, just £10,000 per annum earmarked to administer it, and whether extended collective licensing bodies could license content for the internet, meaning that ECL will spill well beyond these shores. I believe that any new system should be opt-in only. It should be limited to a specific remit, such as extended collective licensing for non-commercial use and orphan works.

[Lord Howarth of Newport]

My Lords, there is a mass of significant matter in these amendments. It is, perhaps, a rather unfortunate degree of bundling that we have them all together. It is particularly unfortunate that the Committee is attempting to deal with them at this stage of the evening. There is important material here that we should not be trying to address under this sort of pressure of time. Noble Lords will be glad to know that I do not intend to comment on each amendment now. I simply want to say a word about Amendment 28SA because I believe it is singularly important. Its effect would be impractical and destructive. As Universities UK has explained to us, limiting the scope of extended collective licences to the UK would require users to manage different territorial permission for some works from a licensing body and not others. It would mean that much broadcast or digital use of these works could not be sold abroad or put on the web and would effectively render extended collective licensing unworkable. The British Library concurs in finding these amendments unmanageable. This amendment also raises issues with regard to existing licences from collecting societies that are de facto extended collective licences that support business and education and already allow use outside the United Kingdom, so, unintentionally, I am sure, this is a wrecking amendment.