Digital Economy Bill (Seventh sitting)

Matt Hancock Excerpts

Committee Debate: 7th sitting: House of Commons
Tuesday 25th October 2016 Public Bill Committees

[Thangam Debbonaire (Bristol West) (Lab)]

I rise to speak in support of these amendments and new clauses, and to add a bit of colour and flavour to some of the arguments that have already been made. We often talk about rights holders, but we need to be aware that behind those rights holders are individual artists, musicians and technical people. It is not just about my hon. Friend the Member for Cardiff West; it is about the technical people involved in any recording, film or e-book. Many people are involved in those processes, and every time we deny their right to be paid, we are denying them the right to continue working in the way that we would want them to work.

Which of us here has not skipped gaily around the Palace of Westminster, at least in our imagination, with a song in our heart or a tune in our head? Maybe that is just me. Most of us have a favourite film, and we have music at special family occasions. A poem will be read at a funeral and a song will be danced to at a wedding, and all the people involved in producing them need to be paid properly for their work.

There should not be this wild west of a shopping mall where people can access whatever they want for free, without proper provision for reimbursing those involved. Unfortunately, search engines in particular, but also other providers, are allowing that illegal shopping mall to exist, and so artists, writers and others involved in the creative industries are not getting their proper deserts. That is important.

The hon. Member for Selby and Ainsty and my hon. Friend the Member for Cardiff West both mentioned economic value. I emphasise that according to the Government’s own website, the creative industries are contributing £9.6 million an hour to the UK economy. Since we sat down to work, the creative industries have contributed £9.6 million. UK music alone contributes £4.1 billion each year, which is something to think about. The creative industries are growing at twice the rate of the UK economy, at 8.9%, and we want them to continue to grow. We do not want to deny them part of their income—admittedly the minority, but it is still significant.

We tabled these amendments because we need to harmonise copyright and ensure that licensing laws work across the online and offline world. We want to help Conservative Members to fulfil their commitment in the Tory party manifesto, and new clause 3 would help

“the Government to fulfil its manifesto commitment to reduce copyright infringement and ensure search engines do not link to the worst-offending sites.”

We seem to have a degree of cross-party unity on the value of that measure. I look forward to hearing what the Minister has to say, because there is otherwise an absence of a specific provision in the Bill to achieve this.

I want us to make sure that the good examples, such as Get it Right from a Genuine Site, are taken up and followed, to avoid the unfortunate misdemeanours of others, such as search engines that can remain nameless—we can all guess who they are and others may have already mentioned them. It is not okay for search engines to drive—wittingly or unwittingly, but they should reasonably have known—towards illegal sites.

Consumers do not want musicians, film makers and others to be robbed of their just deserts. Mostly, we want to be able to be sure that when musicians have made a piece of music we love, they get properly paid for it. It is incumbent on search engines and others to make sure that that happens, and to use the power we know they have to create their algorithms to work properly in this respect. We would not tolerate a shopping mall in which signs and property space were given to illegal shops selling illegal goods. This is the equivalent.

I am absolutely convinced that the Minister would want to honour the commitment in the Tory party manifesto to rectify that. On Second Reading, the former Secretary of State, the right hon. Member for Maldon (Mr Whittingdale) said,

“there may well be a case for including a legal provision encouraging providers to establish a voluntary code.”

He also said:

“we cannot allow Google and other search providers to go on allowing people access to illegal sites.” —[Official Report, 13 September 2007; Vol. 614, c. 785.]

I am convinced that the Minister will want to take up the mantle he has been thrown by the former Secretary of State and I urge him to do so.

[The Minister for Digital and Culture (Matt Hancock)]

What a pleasure it is finally to stand to respond to the long interventions and speeches from Labour Members. It is a joy to hear that at least some of them understand and believe in property rights. Conservative Members certainly do.

The discussion has turned into a debate not only on amendments 92 and 93 and new clauses 3 and 33 but essentially on clause stand part. I therefore hope that Committee members will understand if I explain the whole clause in my response.

[Kevin Brennan]

The Minister is seeking to chair the Committee now as well as being the Minister.

[The Chair]

And he is doing it extremely well but it will be my decision.

[Matt Hancock]

It is a team effort.

The amendments are to clause 26, which increases the maximum sentence for online copyright infringement from two to 10 years, which is equal to the sentence for physical copyright infringement. The case for this has been made powerfully by Government and Opposition Members and it is an important change. Whether online or offline or a combination of the two, copyright infringement is IP theft and it is right that the maximum sentence is the same.

This sends a clear message that copyright infringement of either kind will not be tolerated and affirms that creators who produce the content that we all enjoy are valued. Furthermore, enforcement agencies will now have proportionate sanctions to tackle this serious criminality, whether offline or online.

We recognise that the maximum sentence of 10 years, even if only for the most serious cases, must be carefully targeted. Consequently, clause 26 also makes changes to the existing offence of online copyright infringement to make it clearer when that offence is committed and who should be considered liable. The amendments speak to some of those points.

The concept of prejudicial effect in the existing legislation will be replaced with a requirement that the infringer intends to make a monetary gain for themselves or knows or has reason to believe their actions will expose the rights holder to a loss or risk of loss in money. I will come to the debate around definition of that in more detail.

The point of this clarification is to act as a safeguard to ensure that the increased maximum penalty is applied only to serious criminals who deserve it and will not apply to those who share material accidently or without knowledge of the consequences.

Turning to the points made by the hon. Member for Cardiff West, or at least the ones that were pertinent—

[Kevin Brennan]

On a point of order, Mr Streeter. Am I right in saying that as the Chair of the Committee, had I made any points that were not pertinent, you would have ruled me out of order?

[The Chair]

I can certainly confirm that you were in order all the way through your comprehensive speech.

[Matt Hancock]

Undoubtedly in order and sometimes very broad ranging. A person who accidentally shares a single file without the appropriate licence, particularly when the copyright owner cannot demonstrate any loss or risk of loss, is not expected to be caught by this offence. I hope that gives the hon. Gentleman assurance on that point. However, of course, criminal infringement will be dealt with on a case-by-case basis and a court must be satisfied beyond reasonable doubt that all elements of the offence have been made out.

[Kevin Brennan]

We are getting to the crux of the matter: the words the Minister uses are very important. All joking and jibing aside, which he enjoys, there is a serious reason for laying these matters firmly on the record in Committee—that is our serious purpose here and our constitutional role. He said, “is not expected to be caught by this offence”. I fear that that is not really strong enough in response to my points. We need to understand whether it is possible for individual consumers to be captured by it. If so, the Minister should tell the Committee.

[Matt Hancock]

As I said, it is for the courts to decide about criminal infringement on a case-by-case basis, but I am making clear that that is unlikely and not the expected outcome in the case of a person who accidentally shares a single file without the appropriate licence. The reason I do not go further and make it absolute is to ensure that the court can make a fair judgment on this, rather than be bound. I want to go further, because there is another important point here about the impact of this on activities that are currently lawful. We do not expect things that are currently lawful to be caught by this change. This is a change in the scope of the sentence rather than in the definition of the offence. I want to make that very clear.

On the second point that the hon. Member for Cardiff West made about the legal distinction between “owners of copyright” and “owners of the rights”, “owners of copyright” relates to the offence of communicating to the public, whereas “owners of the rights” relates to the performer’s right of making available. This is a legal distinction: they are two separate offences but there is no substantive difference in the meaning of the two. The reason has to do with the legal drafting of the offence rather than the lay understanding of the meaning of the two.

The hon. Gentleman also raised the issue of trolls. I want to be clear that while we understand that some people may receive threatening letters from so-called trolls, we are not aware of any successful court case by these so-called trolls in this area. We do not endorse such aggressive tactics and we understand that this tactic is not widespread, but we will keep it under review.

Going more broadly into the debate that we have just enjoyed, since 2002, when the maximum custodial sentence for copyright infringement was changed, this has clearly been wrong. I am glad that there is all-party agreement on the change to 10 years, but in addition to increasing the maximum sentence, we have recast the relevant offences to include an additional element to the offences, which must be proved before an offence is made out, namely that the infringer intends to make a monetary gain for themselves or another person, or knows or has reason to believe that their actions will cause loss to the rights holder or a risk of loss in money. Amendments 92 and 93 would remove this additional element, but there are several reasons why it should be retained. We should remember that serious incidents of online copyright infringement or infringement of a performer’s making available right already fall within the scope of criminal law, as I mentioned.

It is right that the courts should be able to apply serious sanctions where they are warranted and apply the equivalent sanction to that available for physical copyright infringement, but it is our view that it is important to include the words, “risk of loss” to capture cases where the loss has not yet materialised. We believe that these same scenarios would fall within the current drafting of the offences, which relies on the prejudicial effect, but we have tightened the notion of prejudicial effect following consultation, to be more precise and targeted in the wording being examined today. I hope that satisfies the understandable request by the hon. Member for Cardiff West for clarity to be put on the record as to the intent of clause 26.

I now wish to turn to new clause 3 on search engines. We had a serious debate on the impact of search engines. We come from a position of being strong believers in the protection of property rights, and we want to ensure that the UK retains one of the best IP regimes in the world. Without content, there is no IP to protect, so I pay tribute to the BPI’s work: to support take-downs and to make the eloquent case for stronger IP protection. I also pay tribute to Get it Right from a Genuine Site, which does important work in making sure that culturally it is unreasonable—and seen as unreasonable—to take IP without paying for it.

I turn to my hon. Friend the Member for Richmond (Yorks) who made an important point on newspaper articles that appear in search engines. We support fair remuneration and we encourage content providers and online platforms to work together on this. This is an issue that has been raised with me directly, and it is pertinent to the debate. We want to encourage investment in new content, and we support returns for investigative journalism and other kinds of journalism, and I hope we come to a resolution on fair remuneration between content providers and online platforms, in the first instance. However, my hon. Friend’s intervention is noted.

In relation to clause 3, as the Committee knows from the discussion, the Minister for Intellectual Property, Baroness Neville-Rolfe, has been working closely with search engines and representatives of the creative industries. We are fulfilling our manifesto commitment to ensure that there is a fair return, and the group is currently considering a voluntary code of practice. I agree with the thrust of the arguments made by my hon. Friend the Member for Selby and Ainsty, who put the case strongly. Our intention is for the voluntary negotiations and the voluntary code of practice to come to a successful fruition, and the people involved in those negotiations will doubtless have heard the argument and understood the strength of feeling on this Committee. Given this ongoing work and the existing remedies for removing or blocking infringement content, I hope that hon. Members will agree that now is not the right time for a broad reserve power.

[Kevin Brennan]

Surely now, when we have a legislative vehicle in front of us that could not have been better designed for this very purpose, is exactly the right time. Committee members would have a right to be annoyed if, in making this broad assertion that now is not the right time, the Minister were subsequently to concede on this point at a later stage in the Bill’s progress, in another place and in an unelected House. Will he tell us truthfully what the Government’s intentions are on this point?

[Matt Hancock]

I care about the substance of getting this Bill through right. There are, of course, important parts of parliamentary process both here and in the other place. Given that the round-table discussions are ongoing, including a meeting next week, now is not the right time for the broad reserve power.

New clause 33 seeks to expand the criminal liability to include the supply of IPTV boxes for criminal infringement. As hon. Members will understand from the tone of my remarks, as a strong believer in property right protection, I understand the concern. The hon. Member for Cardiff West referred to the Copyright, Designs and Patents Act 1988 and the fact that the Minister for Intellectual Property had committed to making sure that we looked at this, and we have done so. This activity is already covered by criminal law under the Fraud Act 2006 and the Serious Crime Act 2015. The City of London police force is investigating cases. It seized over 500 set-top boxes earlier this year and arrested a man for fraud and IP offences.

There is a danger in the digital world of legislating for a specific technology as opposed to legislating for the offence in a technology-neutral way. I strongly prefer the latter. As the law is already in existence in the two Acts that I mentioned, the best thing to do is to prosecute under the existing Acts, rather than try to chase a particular technology, which may well be out of date. Our strategy for tackling IP crime includes a specific commitment to developing an understanding of the challenges posed by IPTV. We now need an approach that tackles the problem, rather than just current IPTV set top-box technology, which will no doubt be superseded in due course by future technologies. The existing criminal offences provide a legislative framework that is broad enough to protect our creative industries. However, I will of course keep this area under review.

I hope Members have been reassured of the work we are doing to make sure we apply the existing criminal law and make sure that intellectual property is protected. I concur with all the remarks made by Committee members about the importance of the creative industries, the importance of supporting content providers and the importance of intellectual property. I hope that with these explanations, the hon. Member for Cardiff West will feel able to withdraw the amendment.

[The Chair]

Before I call Mr Brennan, it may help the Committee to know that it is not my intention to allow a wider debate on clause 26. We have had a good old canter around the course.

[Kevin Brennan]

Thank you, Mr Streeter, for letting us know your decision—not influenced at all, I am sure, by the efforts of the Minister to chair the Committee as well as leading for the Government. I will take into account in my response that you are including clause stand part in this part of our debate.

I made it clear at the outset that amendments 92 and 93 were probing amendments and I am very grateful for Minister’s explanation of the meaning and intention of the wording. As I have made clear, it is not our intention to push the amendments to a Division, but I think we need to cogitate a little further before Report and the latter stages of the Bill and perform a more careful exegesis of what the Minister said when he used the phrase “not expected”.

[Matt Hancock]

I can go yet further on that. The reason this is rightly done on a case-by-case basis is that we are talking about an existing offence. It is important to remember that. We are not making something illegitimate which is currently legitimate; we are adding to what is required to make out an offence. We are not making something that is currently legitimate now illegitimate. That is why it is reasonable to proceed on that basis, with the language that I used.

[Kevin Brennan]

I am grateful for the further clarification and for the Minister engaging in the discussion. We will think further about what he has said. I think it has been a very helpful exploration of the issue. I am not sure that he is right when he receives advice that the trolling issue is not widespread, which was the phrase he used. Obviously we can dig into that a bit further as we progress with scrutinising the Bill, but I welcome the fact that he said he would keep that under review. This is a very real issue and the fact that there may not be many prosecutions around it is often related to the fact that such activity is not necessarily illegal—the point I made in my contribution. Nevertheless, it can bring great distress to vulnerable individuals. We all know that the issue of vulnerable individuals being targeted by unscrupulous individuals, organisations and networks online is growing.

[Matt Hancock]

The challenge, though, is to ensure that reasonable protection of intellectual property is not ruled out by stopping any such speculative activity. There is a genuine policy challenge in how to support the protection of intellectual property. We are not aware of any successful legal cases by the trolls. People should therefore be reassured.

--- Later in debate ---

[Kevin Brennan]

In a nutshell, that is the reason for new clause 3, and I am sure that was exactly the thinking of the hon. Member for Selby and Ainsty when he tabled it.

It might help if the Minister indicated when he expects the talks to conclude. He says he hopes there will be a positive outcome to them and that this is not the right time for new clause 3. He likes to talk softly; if new clause 3 were incorporated into the Bill, he could carry a big stick while talking softly about this matter. If he is not prepared to amend the Bill, perhaps he could tell the Committee when he believes the talks should conclude, as that would help to focus minds a bit. Perhaps he could put it on record that he is not happy to allow the talks to drift on and on inconclusively, as they have for many years.

We are not satisfied with the Minister’s response on new clause 3, and I repeat that it is my belief that at some point during the progress of the Bill the Government will concede on that point. It would be a terrible shame if they did not concede to the hon. Member for Selby and Ainsty—one of their own elected Members here in the Commons, who has tabled a sensible amendment—but did so in another place, giving the credit, yet again, to the unelected House for being a wonderful House in revising legislation. There is plenty of expertise right here in the Committee and in this House, among elected Members who know about the subject and know that this is the right thing to do. I urge the Minister to change his mind about new clause 3, if not now, perhaps on Report, when we will no doubt return to the issue.

Finally, I hope it is helpful to you, Mr Streeter, to be aware that it is not my intention to divide the Committee on new clause 33. As for the Minister’s response, I think I referred to the shortcomings of the current offence. I did not say we did not think that people could currently be prosecuted, under the Fraud Act 2006 or the Serious Crime Act 2015; in fact, I specifically mentioned those Acts—it might have been while the Minister was searching for something online. I also mentioned why the Acts were inadequate, and the Minister did not respond. First, they require a great deal of expertise in the area on the part of the police, which is not necessarily a resource that is sufficient to meet the growing size of the problem. Secondly, by amending the Copyright, Designs and Patents Act 1988, my new clause would have not just allowed but compelled trading standards to get involved and would have allowed the body to take action.

It would be useful to hear from the Minister why he does not think it a good idea that trading standards should be brought into play in that way, rather than simply relying on a police force that is under pressure and has many things to investigate—an ever-growing problem. Is it the Government’s position that is it wrong that trading standards would be the right body to involve? It would be extremely useful if the Minister felt able to clarify that. He said that he would keep the matter under review. I welcome that, and I hope he will be able to tell us more about the issue at a later stage, but if he told us at this stage why trading standards is not the right body to involve, that would be helpful.

We have had a fairly comprehensive debate. I do not think I need to add much on clause stand part, apart from that the latest data, published by the IPO, demonstrate the need for Government action. The research found that 15% of internet users—6.7 million people—still access copyright-infringing content, so it is absolutely right that the Government should act. I hope that the Minister feels able to add a bit more, in light of what I have said.

[Matt Hancock]

Very briefly, I mentioned that one of the meetings in the negotiations with search engines is next week. We expect the meetings to conclude over the next few weeks, and that is why the timing is appropriate.

[Kevin Brennan]

Perhaps I am speaking against what I said earlier, but if the Government do not give way on that point and the talks conclude unsatisfactorily before Christmas, while the Bill is still before Parliament, will they consider amending the Bill at a later stage?

[Matt Hancock]

I do not want to get into answering conditionals that are dependent on some future action. I have made the case for why now is not the right time and I have given the hon. Gentleman the timeframe over which discussions are taking place.

The hon. Gentleman made the case against new clause 33 very well. These are criminal activities, and it is the police’s role to police them. There are increased resources for the police in this area and I look forward to their taking it on. Our principle is not to legislate for specific offences based on an individual technology when offences already exist that can be used to prosecute the illegal activity.

For instance, many IP TV boxes are sold without any software on them; some have it inbuilt and some do not, and the ones that do not can be used for legitimate and illegitimate purposes. It is far better to have an in principle criminal measure on the statute book and to prosecute with that. Everybody can see the united strength of purpose to ensure that such IP theft does not go unpunished.

[Calum Kerr]

I thank the Minister for his explanation. I know that he and the Government are not fans of amendments that would oblige them to do a report to see how they are doing in the area. However, is there a way of looking at it on an ongoing basis, so that progress can be monitored and we can see how many prosecutions are actually occurring under the current legislation?

[Matt Hancock]

That would be an excellent idea, if the Culture, Media and Sport Committee chose to take it up. That is what Select Committees are for; I know the hon. Gentleman does not like them, but I think they are excellent at scrutinising the Government and everything that is going on. With that response, I ask the hon. Member for Cardiff West to withdraw his amendment.

[Kevin Brennan]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 26 ordered to stand part of the Bill.



Clause 27

Registered designs: infringement: marking product with internet link

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

Can the Minister confirm in his response whether that assessment of the clause’s purpose is reasonably accurate? Has any assessment been made of the impact on the costs of design registration? Can he give us any practical examples of how the current law is causing problems—in other words, the problems that the clause seeks to rectify? Practically, how could the clause have prevented such problems, and how will it prevent them in future if approved by the Committee?

[Matt Hancock]

First, that was an extremely good and unusually succinct description of the clause. The hon. Gentleman asked about costs; we think that it will reduce costs to business. In terms of the current problems, physically changing the required registration details on products imposes a cost. For instance, some businesses produce labels that must be applied to every single product. Such costs are unnecessary if a single label or web address can be built into the design and the update can then be done digitally rather than physically. It is, after all, illegal to claim that a product is registered when it is not. Therefore, the changes are required by law, and it is far cheaper for everybody if they are made on a website that is referenced on the physical product, rather than on labels, or sometimes labels stuck over labels. I am glad that there is cross-party understanding of and agreement on the clause, and I commend it to the Committee.

Question put and agreed to.

Clause 27 accordingly ordered to stand part of the Bill.

Clause 28

Copyright etc where broadcast retransmitted by cable

[Nigel Adams]

I beg to move amendment 63, in clause 28, page 27, line 31, leave out subsections (3) to (5).

This amendment, together with Amendment 64, are probing amendments to identify a timeframe for the repeal of section 73 of the Copyright, Design and Patents Act 1988 as it is not clear when the repeal will come into force. The amendments would mean that repeal of section 73 of the CPDA would come into force as soon as the Bill receives Royal Assent.