Lord Young of Norwood Green
Main Page: Lord Young of Norwood Green (Labour - Life peer)Intellectual Property Bill [HL]
Lord Young of Norwood Green Excerpts“(b) at the end insert—“( ) In this section “qualifying country” means—
(a) the United Kingdom; and(b) another member state of the European Economic Area.””
Lord Young of Norwood Green
My Lords, let me reassure the noble Lord, Lord Clement-Jones, that I am not big enough to frighten the horses—a small group of chickens, maybe, but that is about it.
The benefit that we have in this Committee is that we can probe, which is what we are seeking to do, not to be obstructive or negative but genuinely to probe areas that are complicated, as the Minister himself recognises. My apologies for the length of the contribution, but it is meant in a constructive and positive way.
The amendment is a probing one, designed to understand the nature of the change and the reason for the meaning of “qualifying country”. The definition of the current UDR has come in for substantial judicial criticism. In Dyson v Qualtex, Jacob LJ referred to the existing wording of CDPA Section 213, subsections (1) to (4) and observed:
“It has the merit of being short. It has no other”.
That could be a description of myself. He went on,
“Jonathan Parker J. considerably understated the position, when he said ‘regrettably, the drafting of s.213 leaves much to be desired’. (Mark Wilkinson Furniture Ltd v Woodcraft Designs (Radcliffe Ltd) (1998 F.S.R. 63 at p.27). It is not just a question of drafting (though words and phrases such as ‘commonplace’, ‘dependent’, ‘aspect of shape or configuration of part of an article’ and ‘design field in question’ are full of uncertainty in themselves and pose near impossible factual questions). The problem is deeper: neither the language used nor the context of the legislation give any clear idea what was intended. Time and time again one struggles but fails to ascertain a precise meaning, a meaning which men of business can reasonably use to guide their conduct. The amount of textbook writing and conjecture as to the meaning is a testament to its obscurity”.
At present, Section 213(4) states:
“A design is not ‘original’ for the purposes of this Part if it is commonplace in the design field in question at the time of its creation”.
There is a nice bit of tautology for you.
Viscount Younger of Leckie
My Lords, Amendments 2 and 5 address various points in relation to the qualification criteria in the Bill. I will first turn to Amendment 2, which would change the definition of qualifying country in relation to the meaning of “original” in Section 213(4) of the Copyright, Designs and Patents Act 1988.
The amendment would change the definition to the United Kingdom and European Economic Area. In practice, that will mean adding Iceland, Liechtenstein and Norway to what is currently proposed and removing a number of countries—I hope that noble Lords will bear with me and not succumb to slumber as I read the whole list. Those that would be removed are: Anguilla, Bermuda, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Channel Islands, Falkland Islands, Gibraltar, Hong Kong, Isle of Man, Montserrat, New Zealand, the Pitcairn Islands, Henderson, Ducie and Oeno Islands, St Helena and Dependencies, South Georgia and the South Sandwich Islands and the Turks and the Caicos Islands.
The amendment would mean that the geographical areas used in the definition of “commonplace”, which is under debate here, and “qualifying country”, which is in Section 217(3) of the Copyright, Designs and Patents Act 1988, would be different. This would create an anomaly in the Act and a level of complexity, which the Bill, on principle, is trying to remove.
I would like to pick up on some points that the noble Lord, Lord Young of Norwood Green, made because he asked for and deserves a more substantive answer on the reasoning behind the decisions that we made. Aligning the geographical coverage and qualification is a logical harmonisation. Legal rights should be subject to the same eligibility tests wherever they arise. Otherwise, examples of unfairness would occur. It will make it easier for a person to know whether they qualify for an unregistered design right and it will help to resolve disputes more quickly. It will be easier for businesses and users to understand how they can qualify for an unregistered design right.
Furthermore, I want to explain why the Government were consulting on changing the definition of “commonplace”, as in Clause 1, to cover the whole of the EEA, even though the Bill is only amending coverage in the EU. Following the consultation and on further reflection, the Government came to the conclusion that an additional layer of complexity to the law would be created in the eligibility criteria for design right if the geographical areas were different for the definition of “qualifying country” and for “commonplace” to which the noble Lord alluded.
Similarly, Amendment 5 would introduce a new definition. It proposes a change to the requirements for businesses that qualify for unregistered design right, specifying that the business must have,
“a real and effective industrial or commercial establishment”,
in any qualifying country.
The current definition of a business that qualifies for the UK unregistered design right includes the requirement that it must carry on a,
“‘substantial business activity’” in a qualifying country”.
The term “substantial business activity” is already used elsewhere in the Act—for example, for qualification criteria for copyright performances in Section 206. The term is not defined in the Act, but does not appear to have been the subject of significant case law, which suggests that the term has not caused problems in practice.
Although the wording suggested in Amendment 5 has its basis in EU law, the Government believe that to introduce this term into UK law could create confusion and uncertainty about the qualification criteria for unregistered design rights. The Bill is trying, where possible, to reduce complexity in the law. The Government believe that these amendments would lead to additional complexity, not reduce it.
The noble Lord, Lord Young of Norwood Green, asked whether there was a definition of “commonplace”. There is no statutory definition in terms of its meaning. However, the word “commonplace” has to be tested objectively in the design field in question. The case of Fulton v Totes puts a gloss on the meaning of the territorial extent of “commonplace”, suggesting that the UK market is relevant. Therefore, the Bill seeks to clarify the territorial scope of the definition of commonplace and align it with qualification requirements. I ask the noble Lord to withdraw his amendment.
Lord Young of Norwood Green
I thank the noble Lord, Lord Clement-Jones, for his contribution, which, in a much more succinct manner, referred to the two key objectives—if we could achieve them—of coherence and ensuring that this legislation does not lead to a UK-business disadvantage. I thank the Minister for his reply but, given the range of his response, I wondered whether, in relation to the criteria that one is trying to establish—not making things more complex than they already are—any registered or unregistered design right had ever emanated from the Pitcairn Islands. No doubt the Bill team can give us that information at some point.
To be serious, we will reflect on the Minister’s answers and, in the mean time, I beg leave to withdraw the amendment.
Lord Young of Norwood Green
Noble Lords will be relieved to know that this will be a much briefer contribution.
In their consultation, the Government stated that they would introduce safeguards and transitional provisions for third parties which had commissioned designs, but they failed to do so. This amendment would require the Secretary of State to introduce transitional provisions for commissioned designs for a period of six months after the Act comes into force. Clause 22 allows transitional provisions to be brought forward, but this is an issue of considerable concern in the design community and it seems right for this provision to be in the Bill.
In the consultation document, the Government raised the question of whether there should be “statutory” safeguards for commissioners for a transition period. Why the change? Why not have this on the face of the Bill? The consultation document also acknowledges the concerns about changing the status quo and says that,
“the IPO will work with bodies representing and promoting designers, as well as IP legal advisers to publicise these and other changes to the law, and their potential impact”.
It expresses the view:
“This should help alleviate some of the concerns about this change in particular”.
Can the Minister say what progress has been made with this laudable initiative and with whom the IPO has been working, and can he give us an assessment of the IPO’s success in alleviating the concerns that it recognises exist in this area? If this work has not yet started, can he outline the proposed programme and the time it will be likely to take? I beg to move.
Lord Howarth of Newport
My Lords, I have one question for the noble Viscount. In legislating to effect this change, how does he intend to secure the position of people who have commissioned designs? They have invested capital and made an important personal commitment to commissioning a design. In future, the design right of that design is to be vested in the designer and not the commissioner. I do not object to that in principle but I should be grateful if he would clarify how the commissioners’ interests are to be secured in this new situation. Is it to be by way of contract between the commissioner and the person he employs? If so, what ought the commissioner to stipulate in the contract of his employee? However, supposing that the designer is freelance or an independent contractor, how strong will be the protection for the entrepreneur who has commissioned the design and whose interests I think none of us would want to see neglected?
Viscount Younger of Leckie
The noble Lord again makes a good point. The default position is that it is down to the wording of the contract. However, having said that, I will write to the noble Lord to clarify what further protections there might be for the commissioners. As a matter of clarification, where a designer is employed, the employer will be the owner of the design. I hope that, in the mean time, this provides sufficient reassurance to the noble Lords, Lord Young and Lord Stevenson. I ask the noble Lord, Lord Young, to withdraw his amendment.
Lord Young of Norwood Green
I thank those who have participated in the debate. My noble friend Lord Howarth raised an interesting point about the balance of rights between the commissioner and the designer. We have had some explanation from the Minister, but I welcome the fact that he will write to us, too. The Minister also talked about working with stakeholders to ensure greater understanding in this area. Again, we would welcome more details of the nature of that work. I do not necessarily expect the noble Viscount to have the answer here, but perhaps he could let us know. Finally, we have been talking about contracts. Is there potential for an unfair contracts Act in relation to what we have been discussing? With those questions, I beg leave to withdraw the amendment.
Lord Young of Norwood Green
My Lords, in moving Amendment 10, I shall refer to Amendments 12 and 19 as well. Amendment 10 is quite simple. We would leave out subsection (3), which gives a Henry VIII power to the Secretary of State to amend the Act by order. Amendment 12 would implement the Delegated Powers Committee recommendation but goes slightly wider by requiring all orders under Clause 8 to be subject to affirmative procedure. Amendment 19 would also implement the Delegated Powers Committee recommendation, but it goes further by requiring all statutory instruments to be subject to the affirmative procedure. This was referred to in the recent report from the committee.
These amendments were laid before we had sight of that DPRR committee report, but the committee has drawn our attention to the Henry VIII powers contained in this Bill and, as good democrats, we should be careful of approving such powers without good reason. Indeed, the committee went a little further, saying that it would,
“expect to see some justification for the negative procedure”,
that the Government are proposing.
The committee is sceptical of the case put forward by the Government, saying that it detects,
“some inconsistency of approach between what is said in paragraph 8 of the memorandum and the explanations given in paragraphs 25 and 35 about the choice of … powers”.
It would be good to hear the Minister clear up that ambiguity.
The rest of the group, which we share with the noble Lord, Lord Clement-Jones, reflects the recommendation of the Delegated Powers Committee and proposes its solution to the issue, which is that it considers the case for negative procedure has not been made for orders under proposed new Section 15ZA, and that the affirmative procedure should apply instead. I look forward to the comments to be made by the noble Lord, Lord Clement-Jones, and beg to move.
Lord Clement-Jones
My Lords, the noble Lord, Lord Young, has encapsulated the argument pretty well. It merely takes a reading of the report from the Delegated Powers and Regulatory Reform Committee to see that, although on slightly different bases and for rather different reasons, it is not happy at all with negative procedure for either Clause 8 or Clause 11. In addition to the amendments tabled between us, I have some sympathy with Amendment 10 as well. I very much hope that the Minister will be able to give either convincing reasons for continuing with the negative procedure or will accept the fact that the committee has delivered a pretty strong opinion, particularly in terms of being able to amend primary legislation, and that therefore he will accept or put forward his own amendments to change it to the affirmative procedure in the case of both clauses. Simply reading the committee’s report is pretty persuasive by itself.
Viscount Younger of Leckie
My Lords, Amendments 10, 11 and 12 would require regulations made under the power of Clause 8 to be subject to the affirmative resolution procedure. In addition, Amendments 18 and 19 would require regulations under the power of Clause 11 to be subject to the affirmative procedure.
Noble Lords will have had the opportunity to consider the report of the Delegated Powers and Regulatory Reform Committee, which was published on 6 June. While the committee accepted the majority of the delegated powers included in the Bill, the report recommended that the powers included in Clause 8, which concerns the Hague agreement, and Clause 11, which relates to the design opinions service, should require the affirmative procedure. I very much welcome the committee’s report and the time that its members have dedicated to scrutinising this Bill. The work of the committee is very important in ensuring that the implications of legislation are fully considered, and I wish to put on the record how much I value its detailed consideration of the Bill.
The report was published only two sitting days ago, so I hope that noble Lords will allow me a little more time to discuss with my colleagues across government the committee’s very worthy proposals in the appropriate level of detail that the report deserves. I have listened very carefully to all comments made this afternoon by noble Lords and I am certain that this issue will be returned to on Report.
The noble Lord, Lord Young, asked why there was a difference of approach with regard to negative versus affirmative resolutions. Traditionally, regulations in design law have been commenced by negative resolution, including in relation to a similar international agreement—namely, the Madrid protocol, which the noble Lord may be aware of. However, at this current time, I hope that I have given certain reassurances and I ask the noble Lord to withdraw his amendment.
Lord Young of Norwood Green
My Lords, I welcome the assurance given by the Minister. In the circumstances, it is perfectly reasonable that he requires a bit more time, and I therefore beg leave to withdraw the amendment.
Lord Stevenson of Balmacara
I thank the Minister for his contribution and my noble friend Lord Howarth for making additional points in relation to the proposal in the amendment. Behind this short debate lurks the proposal later in the Bill to have an annual report to Parliament on IP work, and it is helpful that the Minister finished on that point. To anticipate that debate, we will be arguing that to draw the report in the rather narrow terms currently specified in the Bill may be too tight, so perhaps we can come back to this issue when we get to that clause because the recent exchange gave us examples of that. It would be helpful to have a better understanding of how engagement with the wider group involved in the creative industries and in design, in particular, is going. Simply reporting on the economy and growth will not get across that engagement in sufficient detail, so this may be something to which we will return.
This matter also raises whether, as was argued during our discussions on the ERR Bill, having an IP Minister is sufficient in relation to intellectual property work and the support of the creative industries more generally or whether something more grandiose than even a noble Viscount, such as a tsar, will be required. I can see the noble Viscount reaching out across Whitehall and drawing things together much in the style of the films of Eisenstein.
Lord Stevenson of Balmacara
I was not going to mention Ivan the Terrible in particular, but there are other tsars of recent memory who would have been as effective, without necessarily all the killing, in getting people to understand what is important about intellectual property and in thrilling them with the opportunities that I am sure will flow from the Hague agreement.
The idea that somehow the IPO, however many thousands of Twitter followers it has, can do this with 140 characters per tweet does not fill me with enthusiasm. This needs engagement on a much greater scale, as has been mentioned. We will return to this issue, so I beg leave to withdraw the amendment.
Lord Young of Norwood Green
My Lords, in this clause there is a proposal to add a new Section 28A to the Registered Designs Act 1949 to enable the registrar to provide opinions about designs. We and the respondents to the consultation generally welcome this proposal. However, we believe that proposed new subsections 28A(6) and 28A(7) seem to be contradictory. Subsection (6) of the proposed new section seems to say that an opinion is not a decision. If it is, presumably it has no legal force and is therefore not appealable. There is logic in that formulation. However, subsection (7) seems to provide that such opinions are appealable. Why is that? On what grounds are they appealable and to whom? Would a successful appeal change the nature of the opinion? If it had been tested in the courts, it would suggest that it would be different. Can the Minister therefore provide us with some clarification? Our amendment seeks to provide only an opportunity for the noble Viscount to read some suitable words into the record. I beg to move.
Viscount Younger of Leckie
My Lords, Amendment 17 would remove the right of appeal to an appointed person in respect of opinions given under the design opinions service. The Government believe that the right of appeal is extremely important. In this case, businesses who receive a design opinion from the registrar should have the right to appeal that decision to an appointed person. This ensures that a person who is aggrieved by an opinion is able to get a second view on whether the opinion was arrived at correctly in the first place. In particular, it is an important next step before parties consider formal legal proceedings, which could be time-consuming and costly.
Offering a route of appeal for the design service reflects the principles established in the existing patent opinions service. The patent service has been well used, as has the ability for the opinion to be subject to a review procedure. Furthermore, a right of appeal was considered particularly important in the light of the European Convention on Human Rights: an adverse opinion could affect the value of the right and hence the proprietor’s ability to make use of it in business. It is therefore important to offer an appeal for design opinions to ensure that the necessary safeguards are in place.
Noble Lords commented that the routes of appeal against a decision by the Intellectual Property Office include an additional route of appeal to the High Court. This is because decisions by the IPO can be legally binding and can have an impact on a party’s rights. In contrast, the opinion provided by the opinion service is non-binding—indeed, it is an opinion, as the noble Lord, Lord Borrie, pointed out. That is why in subsection (6) of Clause 11, the proposed new section sets out that:
“An opinion given by the registrar under the regulations is not to be treated as a decision of the registrar for the purposes of section 27A.”
The opinions service is designed to be low cost and non-binding. The route of appeal available—an important principle to uphold, given the underlying economic value of the property right—is also low cost and appropriate to the non-binding nature of the opinion offered to parties. The noble Lord, Lord Borrie, raised an issue of cost. I can reassure the noble Lord that the cost of the service will be subject to compensation. In the mean time, I ask that the noble Lord, Lord Young, withdraws this amendment.
Lord Young of Norwood Green
My Lords, I thank my noble friend Lord Borrie for reminding us that this is a helpful, low-cost route and further testing whether the wording in the Bill is right. I thank the Minister for the clarification but would ask that he checks the wording to ensure that it does not introduce any ambiguities. In those circumstances, I beg leave to withdraw the amendment.