Enterprise and Regulatory Reform Bill

Lord Jenkin of Roding Excerpts

Monday 28th January 2013 Grand Committee

Moved by

[Lord Jenkin of Roding]

28C: Before Clause 65, insert the following new Clause—
“Director General of Intellectual Property Rights
(1) The Copyright, Designs and Patents Act 1988 is amended as follows.
(2) In Part VII (miscellaneous and general) at the beginning insert—
“Director General of Intellectual Property RightsA296 Director General of Intellectual Property Rights
(1) The Secretary of State shall appoint an officer to be known as the Director General of Intellectual Property Rights (“the Director General”).
(2) The Director General has a duty to—
(a) promote the creation of new intellectual property,(b) protect and promote the interests of UK intellectual property rights holders,(c) co-ordinate effective enforcement of UK intellectual property rights, and(d) educate consumers on the nature and value of intellectual property.(3) In performing those duties, the Director General must also have regard to the desirability of—
(a) promoting the importance of intellectual property in the UK,(b) encouraging investment and innovation in new UK intellectual property, and(c) protecting intellectual property against infringement of rights.””

[Lord Jenkin of Roding]

My Lords, this proposed new clause calls for a new appointment of a director-general of intellectual property rights.

More than a year ago I started to be approached by a number of bodies, individuals and organisations who voiced their fears about threats to their rights as owners of intellectual property. I held discussions with representatives of publishers from the music industry, the Authors’ Licensing and Collecting Society and a number of others, including those representing designers. I attended a number of meetings where these fears were voiced with increasing intensity and became convinced of the need to ensure that the then projected legislation really did protect the owners of all kinds of IP.

I was interested to read a biography of my great-grandfather recently, who was a distinguished 19th century engineer—the first professor of engineering at Edinburgh University. He and Sir William Thomson, Lord Kelvin, had considerable battles with financiers and others to ensure that they enjoyed the fruits of their inventions by means of patents, which are simply another form of intellectual property. Therefore, my interest in these matters may be to do with my genes.

I have also listened to the strong case for what is called open access: that is, the policy of enabling free access to the results of publicly funded research and other similar sources. This is strongly supported by my right honourable friend the Minister for Science, David Willetts. I remind noble Lords what he wrote in his article in the Guardian last year. The article stated that,

“we will make publicly funded research accessible free of charge to readers. Giving the people the right to roam freely over publicly funded research will usher in a new era of academic discovery and collaboration, and will put the UK at the forefront of open research”.

He added:

“The challenge is how we get there without ruining the value added by academic publishers”,

and, of course, many others. We know that in the other place an amendment was made to the Bill which protects those who publish the results of such research. However, my right honourable friend described this change in open access as a “seismic shift”. The policy covers research councils, universities, libraries, archives and museums. It also covers electronic publications from these sources.

I must make it clear that I warmly welcome this open access policy which seems to me to have a great deal of merit. However, I must, of course, mention the challenges to which my right honourable friend referred. I have been made aware that major commercial interests, many of them in the electronics industry, especially the interactive sources, find the obligations to respect copyright a tiresome and expensive barrier to their business. They appear to claim that they, too, create public benefit and that the privileges of open access should be extended to them as well. Their solution has been to argue strenuously for relaxation of the terms and application of copyright, and some of those arguments are reflected in the Bill. We are faced with the need to reconcile legitimate open access with the essential protection of the rights of the creators of intellectual property. That may be something of a simplification, but we will have ample opportunity to explore that as we go through the rest of the Bill. I must make it clear that I do not wish to trespass upon the debate we shall have on the many particular policy issues dealing with exceptions and orphan works, collective licensing, codes of conduct and the ombudsman, which are all subject to later amendments that deserve very thorough scrutiny.

It is where other interests see this as a route to circumvent the constraints of copyright and other legal protections for property rights—and I assert very firmly that they are property rights and have been seen as such by the courts for very many years—that the conflicts lie. I start by quoting and endorsing the statement by the Alliance for Intellectual Property. It is a long statement, but I will quote only the essential paragraph:

“IP lies at the heart of every British success story. It is essential to the creative industries which support around 1.5 m jobs, contribute over £36 billion to UK GVA (DCMS Creative Industries Economic Estimates). IP is also the basis for the £16 billion which companies invest annually in the UK economy by building brands, and allows the UK’s brand-building industries (including advertising, marketing and design agencies) to generate around £1 billion in Gross Value Added through exports alone. In addition, the design industry employs up to 350,000 people and UK businesses spend around £35 billion on design each year”.

We are not talking about fringe businesses. This lies right at the heart of a great deal of British industry. It is a powerful case, and I have to say to the Minister that I am not wholly satisfied that the Government recognise the strength of that case.

An example of the very real concern that the threat to copyright, including design, patents et cetera, has engendered, was a letter sent to the Times last March signed by members of the Creative Coalition Campaign.

“Copyright is the central intellectual property right that underpins the creative and knowledge economy. Films, music, games, books, could not get made in their present quantity and quality without a robust system of copyright. It provides the legal foundation for the ability of companies to license or sell works, and to invest and innovate”.

There have been other statements as well.

I am sure that noble Lords are aware that on 29 October last, the All-Party Parliament IP group produced a report, The Role of Government in Promoting and Protecting Intellectual Property, which urged the Government to get a grip on how IP policy is made. My honourable friend John Whittingdale, the chairman of the committee, said in a press release:

“The current system of creating intellectual property policy just isn’t working. IP needs a champion within Government, who will recognise its significance and who will have the influence to co-ordinate policy across different departments. From trademarks to patents, design rights and copyright, UK companies depend on their IP rights to succeed and thrive. In this difficult economic climate it’s especially important that Government backs British businesses on IP. We hope that Government will take note of our proposals”.

It was a fairly hard-hitting report, which made the point that the Intellectual Property Office had lost,

“the confidence of a broad swathe of its stakeholders”.

I come to Amendment 28C, which picks up on the group’s call for a champion of IP, calling for the creation of a new post, the director-general of intellectual property rights, a duty to promote the creation of IP and to protect it where it exists. I know that noble Lords will already have studied the amendment, which says in proposed new subsection (2):

“The Director General has a duty to … promote the creation of new intellectual property … protect and promote the interests of UK intellectual property rights holders … co-ordinate effective enforcement of UK intellectual property rights, and”—

this is a very important one—

“educate consumers on the nature and value of intellectual property”.

I add that as an important one, because it is clear that quite a lot of the public think that it is perfectly all right to download all sorts of things on to their computers and telephones without paying for it—because there it is, after all, and they will not be found out. That is the essential of what the amendment points out.

The committee referred to the IPO as having lost the confidence of its stakeholders, but the IPO has an entirely different function, as was made clear by the evidence that it gave to the all-party group. Some of us have had the privilege of listening to people from the IPO in the meetings that we have had. The plain fact is that the IPO may be an efficient registration body for the registration of IP rights, but it is not and never has purported to be a champion of IP. On the contrary, it sees its role as holding the balance between creators and users. This view is reinforced by the general terms of the report, Modernising Copyright, published on 20 December last year and announced by the right honourable Vince Cable when he launched the report. It declares its intention to safeguard the rights of IP creators, but almost every single one of the changes recommended points in the opposite direction. For instance, there should be more exceptions to copyright allowing access without paying. There are many other examples, which we shall no doubt deal with in the respective amendments. Much of the rest are simplifying where practice and confusion have reigned and uncertainty has become rife.

The creators and owners of IP must have someone in government to speak up for them, and that is what the amendment is intended to establish. Since I tabled it, two or three weeks ago, I have been astonished by the wide support that it has attracted. It is seen by a great many of the bodies that represent the creative industries as something that really makes sense.

I referred earlier to the Alliance for Intellectual Property and I also cite the BPI, which represents the British recorded music industry. They ask noble Lords to support the amendment arguing that the director-general should be accountable for ensuring a framework for IP that promotes investment in new content, protects the investment from theft and counterfeit and educates consumers on the importance of UK intellectual property to jobs, growth and export strength to the United Kingdom. There is also the Creators’ Rights Alliance, which speaks for some 14 bodies, including writers, illustrators, picture libraries, composers, journalists, musicians and many others.

Whatever the IPO and my noble friend’s department may say, this widespread demand for a champion for IP seems to have gained a great deal of support. It must not be swept aside. Of course, we will not be voting today because one does not vote in Grand Committee, but this is one of the most important amendments before the Committee. I beg to move.

--- Later in debate ---

[Lord Clement-Jones]

I will respond briefly and leave my noble friend Lord Jenkin to respond to the main amendment. I welcome the fact that the Minister has come out of his corner punching. He has certainly set out the term extension, the charging charities, the anti-piracy measures, the statement by my noble friend Vince Cable about super fast patent procedures, trade mark services and so on. He has also given us a mini update on the copyright hub, which is what I asked for all along on an annual basis. I am not at all convinced by the plea that there will be lots of commercially sensitive data that would have to be included in any report on the copyright hub. I ask my noble friend whether the report on innovation and growth that the IPO is going to be tasked to deliver on an annual basis could include licensing. I believe that licensing is the way forward to innovation and growth for the content and creative industries. It is extremely important, rather than copyright exceptions. There is no reason why it should not be included in the IPO’s report and maybe that is a way of coming to a beneficial conclusion on this.

[Lord Jenkin of Roding]

My Lords, contrary to the figures in front of us on the chart, we have actually spent over an hour on the first amendment. I do not, therefore, want to take more time. I thank all those who have taken part in the debate. I think it justified what I said at the beginning about the level of support there is for, if not this particular amendment then the recognition that “all is not well”—to quote the noble Baroness, Lady Morris. All is not well in the field of copyright. I leave the Minister with this thought. The Government have got to do a great deal more if they are going to regain the confidence of copyright owners. I heard what he said and I shall study it carefully. However, there is no question about it, those of us who have been exposed over recent months to the considerable expressions of dismay and, indeed, fear for the future on the behalf of IP owners are left in doubt at all that, as the noble Baroness said, all is not well.

The argument of the noble Lord, Lord Howarth, for seeking balance, is probably what the IPO claims that it would be doing. The fact of the matter is that it has lost the confidence of all those who are concerned as the owners of IP. Something has to be done in order to get the improvement in the whole copyright structure that is widely sought. It may well be that the director-general proposal will need to be looked at again in the light of what has been said in the debate about it. One point I would make is that the all-party group recommended that it come under the Secretary of State for DCMS whereas the IPO comes under BIS. The amendment says “Secretary of State” and that covers all of them, so the amendment does not distinguish.

I agree with what has been said. There is a lack of co-ordination across Whitehall—a lack of the same kind of recognition of the importance of IP lying at the heart of our economy, and it will increasingly lie at the heart of our economy as it becomes even more based on intellectual property and less on manual labour. We have got to look at this very carefully. Parliament has an opportunity to express its views. I have no doubt at all that we shall want to return to the matter at Report. I give notice to my noble friend that I expect that is what we will do, but we will study what he has said very carefully. In the mean time, I beg leave to withdraw the amendment.

[Viscount Younger of Leckie]

Before my noble friend sits down, I hope that it is in order briefly to answer my noble friend Lord Clement-Jones and to confirm that we can include the detail on licensing within the IPO report in future.

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[Baroness Whitaker]

My Lords, this group of amendments is about Clause 65 as it affects the creators of the work and thus it has a different slant. I apologise for not being able to speak at Second Reading to indicate the line of the amendments in my name and that of the noble Lord, Lord Jenkin of Roding, but they are very much in the spirit of the Government’s repeal of the exception provided in Section 52 of the 1988 Act, which I applaud. I am glad to say that the design industry is in favour of our amendments and I am grateful for its expert comments.

Amendment 28DA simply completes the protection for our creative designs that the Government provide by their initial repeal by applying it also to works of art made prior to June 1957. Most heavily copied classic designs, such as the Eames chair, were created prior to 1957, so without this amendment the Government’s repeal would be of limited value and, incidentally, would leave the UK in breach of the European Court of Justice’s decision in Flos, to which my noble friend Lord Stevenson and other noble Lords have referred.

Amendment 28FA also completes, I submit, the Government’s intention in their repeal. The two provisions in it are almost consequential to Clause 65. The amendment to Regulation 16 of the Duration of Copyright and Rights in Performances Regulations 1995 ensures that the regulations apply to copyrights that were never protected under previous legislation but will be now. If Regulation 24 of those regulations were not amended as we suggest, the making or import of copyright-infringing articles would be permitted indefinitely, on payment of a royalty, in cases where, for instance, a furniture design has been revived. This again is incompatible with EU law. Without this amendment, some of our most important and iconic designs would not receive the protection that the Government appear to have in mind.

Amendment 28EA ensures a short transition period of four months, but with the possibility of a four-month extension if warranted, for third persons who manufacture or who hold stocks of copies of design works within the European Economic Area. Most of these replicas are not made in the EEA—we all know where they are most likely to originate. The repeal of Section 52 will not have any substantial impact on employment or businesses in the UK, so it is reasonable to allow a short time for them to comply, with a proportionate extension to strike a balance—there we go again with balance—between the rights of designers and the interests of undertakings caught by the new law.

In conclusion, I draw noble Lords’ attention to the present situation for our many talented designers who add so much to our economic strength, as the Minister said. Because there has been insufficient protection, the UK has become a safe haven for the sale of replicas of designs that breach copyright. Only two other countries in Europe fall short of good practice in this way: Estonia and Romania. Indeed, there are several criminal prosecutions pending against UK-based suppliers in other countries. The damage to the reputation of our design market—potentially one of our great strengths—is immense. No British jobs are at stake if we implement these amendments and fair competition as well as our international reputation will be improved. Our brilliant design businesses will have more security to develop. It is a win-win prospect. I beg to move.

[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 Clement-Jones]

My Lords, I will speak to Amendments 28G, 28H and 28J. I will not speak to Amendment 28JA, but I support it, and I know that the noble Lord, Lord Jenkin, will speak to it.

As has been discussed, an earlier version of Clause 66 was the subject of extensive debate in the House of Commons, particularly in Committee. As a consequence of the points raised, the clause is amended, and I welcome the fact that the Minister has indicated a further amendment to give greater clarity about the intention behind the Bill since then. The primary intention behind this clause is to allow new exceptions to copyright to be accompanied by the introduction of higher criminal penalties for infringement: the power which the Government do not have under the ECA.

However, many copyright-owners in the creative industries are very concerned even—we heard concern expressed earlier, notably by the noble Lord, Lord Stevenson—that secondary legislation will be used under the ECA, not least the Law Society, of which I am a member. Secondary legislation is difficult to review or challenge, even though subject to the affirmative procedure of both Houses. This is what the Alliance for the Protection of Copyright says: “However, our support”, for Clause 66,

“should not be read as support for the introduction via secondary legislation of the exceptions proposed in the recent Copyright Consultation. Given the potential negative consequences”—

for UK creators associated with “these proposals” changes,

“should … be introduced via primary legislation allowing parliamentarians’ full and proper scrutiny”.

Of course, as I said earlier, following Hargreaves the Government proposed, and have started implementing, a copyright hub that without legislation and by the voluntary participation of rights-holders and users is intended to solve the problems perceived by Hargreaves, at which the exceptions by and large are directed. Therefore, there are many who claim that those exceptions are unnecessary.

However, even if secured by secondary legislation, exceptions that impact so greatly on the UK’s creative industry sector should not be bundled in a take-it-or- leave-it fashion, which would not allow the varying impacts of such proposals on separate creative sectors to be appropriately taken into account. At the very least, they should be accompanied by individual impact assessments and introduced in separate SIs. In the recent Modernising Copyright White Paper, it is stated that the Government intend to make changes to copyright exceptions in the smallest number of statutory instruments. Therefore, if secondary legislation is to be used, each proposed exception to copyright should be subject to an individual statutory instrument, contrary to that statement. Rights holders are concerned that the introduction of any new copyright exceptions, whether through Clause 66 or the ECA, must be done through careful consideration of each individual exception.

The other possibility—that exceptions be bundled together in a single statutory instrument—would prevent Parliament being able to accept some changes while rejecting others. Such a take-it-or-leave-it approach to copyright reform is wholly unsuited to the nuance and detail of the subject and risks there being a fudge across a number of different issues—for example, conflating questions around photocopying educational text books with the question of burning CDs.

There may, however, be some exceptions which are linked and which could be dealt with together. Some of the exceptions are interrelated. For example, I gather that the IPO believes that the exception on private study links with the exception for research and with the exception which permits libraries to copy for a researcher. Therefore, there is not an unreasonable demand where there are links. It will be important to ensure that changes across exceptions are consistent, and separate SIs for each proposed change could lead to problems of inconsistent law.

Each proposed exception should have its own associated economic impact assessment. As the economic evidence which accompanied the Hargreaves review of IP and growth sadly demonstrated, the economic analysis underpinning some proposed changes to copyright is either lacking or flawed. Officials have indicated that new impact assessments will be published alongside any proposed changes to copyright, and I would certainly welcome reassurance from the Minister that that will be the case. I beg to move.

[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.