Intellectual Property Bill [HL]

Lord Stevenson of Balmacara Excerpts

Wednesday 22nd May 2013 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I thank the Minister for introducing the Bill and for the courtesy of the meeting that I had with him yesterday. We look forward to working together on this legislation.

I am joined on the Front Bench by my noble friend Lord Young of Norwood Green, a veteran, he tells me, of the Digital Economy Act 2010—which we discussed at Question Time but which seems to have disappeared. That means that he has form in this area, and I give warning to the Minister that there will many detailed discussions in Committee on some areas of the Bill. Like the Minister, we look forward to the maiden speech of the noble and learned Lord, Lord Walker of Gestingthorpe.

The UK’s intellectual property framework, which includes copyright, design rights, patents and trademarks, should support and encourage companies large and small as well as individuals to innovate by introducing new products and processes or through opening up new markets. Our IP framework has evolved over time, but we live in a fast-moving world and ongoing effort by government is required to simplify and streamline the IP framework and make sure that it better serves the needs of the UK.

After a long period of inactivity, the Government have produced two Bills dealing with intellectual property in the space of barely 12 months. I would like to think that this is because they have finally woken up to the need to modernise our IP regime and to support our creative industries, but given the considerable time and effort which had to be put into the ERR Bill and the ongoing furore about the Hargreaves recommendations on copyright exceptions, which are due to come before the House in a series of SIs later this year, we have to recognise that the jury is out on this matter.

This slim Bill hardly lives up to the rhetoric in the gracious Speech, let alone its Long Title, and so slim is it that one might almost wonder whether it started out as a minor section tagged on to the end of a much bigger Bill—perhaps the missing communications Bill, about which we heard so much in the early days of the coalition Government but which seems to have died a death. Is this yet more evidence of the strains within the main government party?

Whatever its provenance, the Bill is yet another attempt by the department to tinker with one or two fringe areas in IP. It represents another piecemeal approach, picking up issues that happen to be at the top of the pile, rather than doing what the industry is crying out for and what was recommended by Hargreaves; that is, a root-and-branch job with strong evidence within a coherent plan that will provide crucial support for our creative industries to grow and prosper and, in turn, contribute to the rebalancing of our economy.

It is worth recalling that some of the measures that were included in the Enterprise and Regulatory Reform Act will have the effect of gifting lengthy and valuable copyrights back to companies that manufacture chairs and other objects, and wallpapers. Many of the copyright exceptions that will come forward in secondary legislation later this Session will directly impact on profitable businesses that currently trade on rights purchased and acquired over many decades. Changes to the IP regime are not to be taken lightly and they need to be considered properly and with due regard both to fairness and enterprise.

I suspect that the problems which arise in this area stem in part from the continuing split in responsibilities for IP between BIS and DCMS which bedevils this area. The Minister styles himself as the IP Minister—indeed, he referred to himself as such earlier—but, with DCMS directly responsible for film, broadcasting, the performing and the visual arts, and the cultural industries more generally, that claim has a hollow ring. Having said all that, I agree with the Minister that this modest Intellectual Property Bill is broadly a positive measure and, while we will be doing what we can to improve it, we will do so in a constructive manner, as we want the Bill to go forward.

As the Minister said, the Intellectual Property Bill is intended to help businesses better understand the protections afforded by IP law, to reduce the need for costly litigation and to provide greater certainty for investors in new designs and technologies—something that we can all get behind.

The measures in Part 1 flow, as was said, from the Hargreaves review of intellectual property, published in May 2011. They have been crafted after extensive work and consultation by the IPO, which we acknowledge, and after several years of energetic lobbying by the design industry, which has long argued for greater protection for design work. However, the Hargreaves report found that our design system is amazingly complex. There are five ways to protect designs—UK registered designs, UK unregistered designs, UK copyright, community registered and community unregistered designs. Indeed, the Hargreaves report recommended that no action be taken until a much more detailed survey of evidence had been prepared.

The issue is complicated by the wide range of industries involved. Different industries have different levels and types of need from the IP framework. For example, the fashion industry lives with a high rate of appropriation of its designs. It does, however, frequently pursue infringement of trade marks.

Evidence submitted to the Hargreaves review was predominantly concerned with protection and enforcement issues and raised the discrepancy in levels of protection between design rights, which protect technical design, and copyright, which largely protects artistic designs. This applied both in terms of the duration and availability of rights and their enforcement. Unlike copyright, which is supported by criminal sanctions and is therefore of interest to police and trading standards officers, design rights offer only civil sanctions. However, Clause 13, which sets out to change that, applies only for registered designs, not unregistered designs.

Clearly, there is a case for offering effective remedies to designers who find that their ideas are simply taken over and used without compensation, and this situation is exacerbated in the small companies that make up the design community, which have often invested time and money in developing these designs but either could not afford to take enforcement action or found the law inadequate to do so. Can the Minister explain the rationale for excluding unregistered designs, when ACID reports that the majority of the UK’s 350,000 designers rely on unregistered design rights, with 18,000 to 25,000 unregistered designs lodged with ACID each year, compared with only 4,000 registered with the authorities annually? The development of the copyright hub may well be relevant to the design sector and perhaps the Minister could say whether it is envisaged that it will include design interests of interest to this Bill. If it does, that needs to be taken into account.

The Government rely on saying that,

“blatant, deliberate copying of designs, for commercial gain safe in the knowledge that many of the victims will be unlikely to have the resources to respond, is an act worthy of punishment”,

and believe that the UK needs,

“a coherent approach to the protection of intellectual property rights”,

as copyright and trade mark infringements can attract criminal penalties in certain circumstances. The Government say that their approach is supported by a number of respondents to the IPO consultation, in particular SMEs and independent designers, who criticised the time, cost and uncertainty of existing civil remedies and said that they found it difficult to protect their designs against deliberate copying. On the other hand, the measure is opposed by the IP Federation, the Intellectual Property Bar Association, the City of London Law Society, the Chartered Institute of Patent Attorneys and a number of IP lawyers and specialists, as well as Dyson and the Ministry of Defence.

In particular, this group questions the evidence relied on by the Government to argue that such a measure is necessary. It argues that this area of law is too complex for juries to consider and that criminalisation would require specialist courts. It says that criminalisation is inadequate in the context of a civil wrong and that criminalising design infringement would be akin to criminalising breach of contract. On the comparison with trade mark and copyright, it points to the fact that prosecution largely occurs in cases where the rights are clear and a serious public harm has occurred. Finally, and perhaps crucially, it argues that criminalisation would create a “chilling effect” on innovation, where deliberate activities are genuinely believed to be non-infringing, but would have no defence.

In this context, creating a serious criminal offence punishable by a maximum penalty of 10 years’ imprisonment for copying of a registered design needs careful consideration. I look forward to hearing why the Minister thinks that existing remedies for design infringement, which include injunctive relief, damages and costs, are inadequate; and why he thinks it necessary to introduce the stigma of a criminal record into what is a highly technical field.

Part 2 of the Bill amends the Patent Act 1977 and the main measure here, as we have heard, is to provide for the Agreement on a Unified Patent Court to be brought into effect in the UK. We on this side welcome the agreement, which establishes a unified patent court within participating EC countries. The agreement means that it will be possible to apply to the European Patent Office for a single patent that will have effect across all participating countries and, for some issues, can be litigated in the new unified patent court. This seems to be a very good example of the EU working together and countries coming together to harmonise regulation and assist businesses. I trust that this is not one of the issues on which the Prime Minister will be seeking a UK opt-out. There is likely to be sufficient work allocated to the UK to justify two centres for the UPC in the UK. Can the Minister confirm that this is the case and that, if so, a sensible approach here would be to locate one of these in Scotland?

Part 3 of the Bill creates a new exemption under the Freedom of Information Act 2000 for continuing programmes of research intended for future publication, which we welcome. This formed an amendment that my noble friend Lady Warwick of Undercliffe, with several other noble Lords, notably the noble Baroness, Lady Brinton, who is in her place, argued for during the passage of the Protection of Freedoms Bill. The Justice Committee of another place took up this argument and the Government have finally accepted that some real harm could flow from the premature exposure of ongoing research material. I congratulate the Government on taking this step.

We also welcome the requirement being placed, under Clause 20, on the Secretary of State to report annually to Parliament on how the activities of the IPO have supported innovation and growth in the UK. If I recall correctly, suggestions for an annual report on IP were discussed during the ERR Bill in an amendment moved by the noble Lord, Lord Jenkin, who is in his place. The terms of the report as specified in the Bill are rather narrower than was suggested in our discussion, and this is something to which we might return in Committee.

Finally, there are some areas of IP law that have not made it into the Bill, but which we might consider in Committee. These include various considerations of the differences across the design rights legislation and the way in which criminal offences already in existence do not seem to match well with that. We will come to these in Committee, to which I look forward.