Intellectual Property Bill [HL]

Lord Stevenson of Balmacara Excerpts

Tuesday 30th July 2013 Lords Chamber

The defence is within the spirit of that set out in trade mark legislation, but the Government believe that the proposed formulation will result in a clearer and simpler application of the law. Noble Lords will recall that it sits alongside the existing defence of reasonable belief on the question of the validity of the registered design. In conclusion, the amendment will ensure that those who had sufficient reason to believe that their activity was not infringing would not be guilty of a criminal offence. This is a further safeguard for businesses which act innocently. I beg to move.

[Lord Stevenson of Balmacara]

My Lords, the arguments for and against criminal sanctions for designs have been extensively aired over our discussions on this Bill. Proponents feel that current civil enforcement is expensive for small innovators and that current civil sanctions are not dissuasive to large infringers. Opponents are concerned that unexamined IP rights are a dangerous basis for taking criminal sanctions and that there is a risk of stifling competition in useful products.

We understand the Government’s aim in this Bill. As the Minister said, we were anxious to see if we could move towards a common position. However, we are still concerned about whether it is appropriate and proportionate, whether it would really deter those pirates and counterfeiters whose behaviour the public would consider criminal and whether it may turn out to have a stifling effect on innovation and competition.

One concern, which we have expressed previously, is that the proposed provision could turn into a tool to be used by unscrupulous companies to the detriment of UK designers. It is reasonably inexpensive to register a design, especially as there is no effective examination involved. An unscrupulous company could apply to register designs it copied from a UK designer, then threaten that designer with criminal sanctions for producing his or her own designs. The prospect of defending a criminal action might be enough to make the designer give in. What sort of fairness does that speak to?

As the Minister says, the Government’s intention is 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 they believe that the UK needs a coherent approach to the protection of intellectual property rights. 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. I put it to the Minister that it may not turn out to be a brilliant career move for the IP Minister to cross swords, as he has done, with Sir James Dyson and, indeed, the Ministry of Defence on this point.

As Roger Burt, president of the Chartered Institute of Patent Attorneys, says,

“the Intellectual Property Bill could result in people being charged with criminal offences and locked up for up to 10 years, just for producing a design that looks ‘substantially’ like an existing design”.

We tried to find a compromise position with the Government on this point. We wanted the Government to raise the bar for criminality so that criminal penalties could be considered only in cases, using the words used by the Minister, of “blatant, deliberate copying of designs, for commercial gain”, but we failed. However, we are glad that the Minister listened to one part of our argument, which is that the legislation as drafted might open a Pandora’s box of unintended consequences, potentially discouraging the very kind of legitimate, competitive risk-taking that policy makers have been keen to encourage as a driver of growth.

We therefore welcome the government amendments tabled today, which propose a defence for anyone who reasonably or in good faith believes that their actions were non-infringing. We will continue to oppose the introduction of criminal sanctions for registered design infringement as a matter of principle. However, we are pleased that there will now at least be a defence for any person who reasonably believes that they are not infringing. The objective test of reasonableness should cover situations such as where someone has taken legal advice on the issue, or where an opinion of non-infringement is secured from the IPO opinion service.

They should also extend more broadly to cover competent self-analysis and explanation by a defendant as to why he or she believed that an informed user would perceive the product as creating a different overall impression to the registered design. This is an important amendment and we are happy to support it.

[Lord Clement-Jones]

My Lords, as the Minister knows, I have always been a supporter Clause 13. I know that many small designers will be delighted to see it contained in the Bill and I hope that it survives its passage through the Commons.

Although I did not feel that the clause needed a huge amount of amendment or that it will be the blunt instrument that some people have predicted, if the addition of the amendment makes it more acceptable, it must be welcomed. I welcome the fine tuning that the Minister has carried out.

In welcoming the amendment, and given the restrictions on speeches at Third Reading, I want to thank the Minister for the accessible and receptive approach that he has taken throughout the Bill. I hope that as the Bill goes through the Commons the further discussions that he has promised on lookalikes—and, in particular, on the comparative advertising issues which may be applicable to lookalikes—and on the kind of penalties that might be appropriate to digital copyright infringement will bear fruit.