Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014

Lord Scott of Foscote Excerpts

Tuesday 29th July 2014 Lords Chamber

[Lord Berkeley of Knighton (CB)]

My Lords, I suppose I should declare an interest, being both a composer and a broadcaster. I am grateful to the Minister for underlining once again the Government’s support, commitment and gratitude to the creative industries. I am not surprised at that gratitude, since they bring in a huge amount of money to this country and, perhaps even more important, a huge amount of cultural kudos.

However, I am profoundly concerned by these copyright exceptions. I will not rehearse completely the words of the noble Lord, Lord Stevenson of Balmacara, or, indeed, the noble Lord, Lord Clement-Jones, since they could not have been more clear, but I want to stress one very important point. The Government have argued—again, this follows on from the speech of the noble Lord, Lord Clement-Jones—that there is no more than minimal harm arising out of the private copying exception. However, what empirical evidence do the Government possess to support what may otherwise appear to be just an assumption? If the Minister has not already done so, please could she ask her departmental research team to commission further evidence on damage, given the questionable evidential base they are currently relying on? How, precisely, do the Government intend to monitor harm arising out of the exception once it has come into force, given that in practice it is likely not to be the same as has been predicted in theory? Indeed, the level of harm can be expected to change over time as markets develop. Will the Minister give the House an undertaking that if the Government find evidence of harm, the legislation will be promptly amended to provide for a compensation mechanism?

Many people working in the creative industries live on fairly modest means. Their royalties need to be protected—without them, they will find it very hard to survive. Not everyone has the kind of income generated by incredibly successful pop groups or commercial composers, yet those composers who are perhaps working at the sharp end—those artists and photographers—are precisely those who spread the word about the cultural life of this country. I fear that we may be bolting the stable door after the horse has disappeared; but I am hoping that we might be able to prevent more horses following suit. I strongly urge the Government to listen to the points that have been made by noble Lords thus far and which I am now emphasising.

[Lord Scott of Foscote (CB)]

My Lords, I declare an interest in this debate. I was a member of the Select Committee that produced the report to which reference has been made. I agreed with the contents of that report wholeheartedly and recommended the forcefulness of the views expressed in it to your Lordships.

The importance of this is plain. There are a number of individuals who create copyright works on which they rely for their livelihood. They are entitled at the moment to the protection of the law of copyright so that the work they have brought into existence is not taken advantage of by others, without reward for them. The regulations now before the House will have a very serious effect indeed on people of that sort.

I agree with the noble Lord, Lord Stevenson, and others that this is a change in the law that would have been better brought about—if it was to be brought about at all—by primary legislation. The House could have gone into Committee and amendments could have been put forward and fully debated. To use regulations to bring about a change in the law of this extent seems to me a misuse of the legislative procedure that has been adopted.

I do not want to add to what the noble Lords, Lord Stevenson and Lord Clement-Jones, and my noble friend Lord Berkeley of Knighton said. I agree with what they said but want to draw attention to the aspect of contract override, which was discussed in the Select Committee. The Minister who gave evidence to the Select Committee was the noble Viscount, Lord Younger, accompanied by Ms Heyes. He defended the legislative proposals that your Lordships are now considering and raised the matter of contract override. He and Ms Heyes informed the Select Committee that the effect of the provisions in the regulations,

“would not be retrospective, but would apply only to new contracts; and that the provisions were precedented, inasmuch as an existing exception allowing material to be photocopied in schools could not be overridden by contractual terms”.

However, we are not talking now about education but about private use.

The text of the private use regulation does not confirm the assurance that we thought was given by the noble Viscount, Lord Younger, that the provisions,

“would not be retrospective, but would apply only to new contracts”.

However, in Regulation 3, new Section 28B(10) of the relevant Act states:

“To the extent that a term of a contract purports to prevent or restrict the making of a copy which, by virtue of this section, would not infringe copyright, that term is unenforceable”,

so it is retrospective. It would apply to negate the content of contracts that have been entered into, perhaps since the Minister appeared before the Select Committee in May and gave the assurance to which I have referred, which is set out in the report. That assurance may have been relied on but the proposition that this retrospection can now be incorporated in the regulations seems to me quite wrong. I hope that the Minister will comment on that when she replies to the debate.

The proposition that personal use copying should be permitted and should be free from any copyright infringement is obviously a very important one for all producers of copyright material. What does personal use mean? Does it mean that it would be a breach of copyright for the person who acquires a copyright work to copy it for the benefit of his children? Presumably, that would not be his personal use. How would the personal use limitation be enforced? How could the copyright proprietor possibly know what was being done with his copyright work by the person entitled to copy it for his personal use? Can you copy it and give it to friends as Christmas presents or give it to your children to take to school to show their school friends?

I respectfully suggest that it is not a satisfactory limitation at all. I suggest that this is precisely the sort of legislation that ought to have been referred to Committee to be gone over paragraph by paragraph, with amendments being put forward, discussed and voted on. I thoroughly support the Motion of the noble Lord, Lord Stevenson.

[Baroness Morris of Yardley (Lab)]

My Lords, I am grateful to the Minister for presenting the statutory instruments but I agree with everyone else who has spoken. I have real doubts about what they will mean for the creative industries. I know that her predecessor noted how much consultation had taken place round the issue, and my noble friend Lord Stevenson made the same point. The history of this is very long, and we are left asking if after all those years of consultation and all those meetings, with everyone being opposed to it, what is it doing here in the House about to be passed? Consultation has an element of taking people with you, or persuading people and putting them in the position of seeing the strength of the argument. That has not happened in the sector, which is the sadness of today. As it is not primary legislation we know that it will go through at the end of this debate, and in terms of a responsible House and good-quality legislation that is to be very much regretted.

I have two points to make on a particular aspect of the statutory instrument, but before doing so I declare an interest as a director of the Performing Rights Society and, along with the noble and learned Lord, Lord Scott, as a member of the Secondary Legislation Scrutiny Committee, which considered this legislation. I agree with the Minister that we need to bring the position up to date. I can see that the legislation looks old fashioned and is not fit for purpose, but people are unwittingly breaking the law day after day. It is not an argument against bringing legislation to the Houses of Parliament but an argument against the detail. If we take the example that we have to make it legal for somebody to download or transfer information from their CD to their iPod, I cannot disagree with that. It is what happens and it makes sense. It is allowing the user to take advantage of new technology and I do not think that many rights holders would complain about that.

I want to concentrate on the fact that the statutory instrument extends the right to private copying to the cloud service. This is new technology. A lot of the other private copying exceptions that have been given as examples are not about new technology; it is legislation catching up with the past. With the cloud service—locker service being new technology—this statutory instrument will set the framework for this technology for many years to come. It is a golden opportunity. New technology is not within the legal framework of protecting rights, so this is our chance to ensure that the signals we give do not repeat earlier errors of a creative sector that is not in line with the technology and the way in which people want to use it.

I know that the statutory instrument says what is not allowed—but ask anyone in the film industry about how it has suffered from what was not legally allowed but what was easy to happen. In introducing the debate the Minister said that it is quite clear in cloud technology that it is for personal use only and does not allow friends, family or anyone else to use it. However, it is easy to happen. We will see exactly what happened in the film and music industries. Half the world will say it is illegal and the other half will say that it is easy and everyone does it, so it will continue. To introduce that for new technology with cloud services is a wasted opportunity. I wonder whether the Minister realises the full range of services operated by the cloud locker services. With Dropbox, which many people access now, it is so easy to share information and data with other people. It is almost possible to do it inadvertently or by accident. It is almost that easy that people will assume that that is what the technology is for.

Now is the time to give a message, but is there education on this? Is there any good-quality information in the guidance that goes with the legislation about how this should be interpreted and what should happen? There is not. Why have the Government not put an obligation on the people who run cloud locker services to provide information to customers about what they can or cannot legally do? None of that happens but there is legislation, which includes in its title,

“Personal Copies for Private Use”,

and which by its lack of understanding of the cloud locker services gives the message that it is possible. We have missed the opportunity to give a message about what is and what is not legal. Moreover, we have given the opposite message that copying is possible with this new technology.

--- Later in debate ---

My noble friend Lord Clement-Jones asked why there was no separate consultation on contract override and whether the impact on inward investment had been fully considered. Again, as my predecessor stated in the December debate, contract override has been fully consulted on and considered, including in respect of the impact on inward investment.

[Lord Scott of Foscote]

The noble Viscount, Lord Younger, gave evidence, in terms, that the new provisions would apply only to new contracts.

[Baroness Neville-Rolfe]

I thank the noble and learned Lord and will come back to him on that. I think that I addressed the issue—perhaps we could look at Hansard together and have a further word on this important point.

The noble Lord, Lord Stevenson, my noble friend Lord Clement-Jones and the noble Baroness, Lady Morris, were interested in compensation schemes and the EU law on this, which is set out in the EU copyright directive, also known as the information society directive, or infosoc. Article 5(2)(b) of the copyright directive permits member states to introduce exceptions for private copying, such as the one before us today. The article requires that any exception must include certain conditions, for example that the copy must be for ends which are neither directly nor indirectly commercial. The exact wording is on page 2 of the instrument before us. The article states that the right holder must receive fair compensation when copying takes place under the exception. It is what exactly is meant by “fair compensation” that is at the crux of this question. In interpreting this phrasing, the Government have been guided by recital 35 of the copyright directive. This states:

“In cases where rightholders have already received payment in some other form, for instance as part of a licence fee, no specific or separate payment may be due”.

Later it goes on to say:

“In certain situations where the prejudice to the rightholder would be minimal, no obligation for payment may arise”.

In other words, fair compensation can mean no compensation, as long as the exception causes no, or minimal, harm, or if an appropriate payment has been received. This is how the exception before us has been designed, and it therefore falls within the margin of discretion that the directive allows.

As I said earlier, this view is supported by many, including several eminent legal experts. The JCSI noted in its report that there are persuasive arguments in the Government’s favour. Furthermore, European case law to date, although not directly addressing the question as to what is meant by minimal harm, is consistent with the Government’s approach. I would add that there is no guarantee that the European Court ruling in the Copydan case will have any bearing on the UK’s exception for personal copying. The recently published Advocate-General’s opinion confirms once again the wide latitude that member states have in this area.

The Government do not deny that ultimately only the European Court of Justice can rule definitively on the definition of minimal harm, and it has not done so to date. However, uncertainty—for the reasons I have already articulated—is not a justification for inaction, particularly when the evidence and reasonableness of a change is clear. For all these reasons, the Government believe that the regulations are intra vires.

In response to the request from the noble Lord, Lord Stevenson of Balmacara, the Government do not routinely publish their legal advice, and I am not persuaded that an exception should be made in this case. The Government are confident in the advice they have received that the exception proposed is compatible with all the relevant EU case law and also with our international obligations, such as the Berne convention. On the question of EU law, it was right to mention that there are talks going on in Brussels in this important area. This is a new area that I will be looking at, and I have spent a lot of time in Brussels. But the fact that there may be new measures coming in at an EU level is no reason not to proceed with a package which is useful and important, both to copyright holders and to consumers. The personal copying exception before us today is narrowly drawn, and merely legitimises existing consumer behaviour. This policy is right and fair to both rights holders and consumers.

The noble Lord, Lord Clement-Jones, asked whether the changes will be evaluated, as did others. I reassure the House that the impact of these changes will be evaluated in line with evaluation best practice, and the results of this evaluation will be published within the five-year evaluation period. The Government believe that these changes will have a positive effect on the economy including the creative industries. Additionally, the strategy for carrying out the evaluation will be published. The evaluation will seek to study a range of impacts, including on the creative industries. The Government will obviously be keen to hear from experts and from noble Lords on the proposed evaluation.

The noble Lord, Lord Clement-Jones, asked whether there were really 50 exceptions to copyright law. There are around 50 exceptions in Chapter 3 of the Copyright, Designs and Patents Act 1988. They are found in Sections 28 to 76.