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10.38 pm

The Minister for Competition and Consumer Affairs (Dr. Kim Howells): I congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on bringing the debate to the House tonight. I did not know, and I am not sure whether anyone else in the Chamber knew, that Great Grimsby was the branding capital of the United Kingdom food industry. That is fascinating, but I am not sure that Great Grimsby will remain so, after my hon. Friend described companies such as Tesco, Sainsbury's and Safeway, whose own products sometimes look a little like branded products, as leeches.

Mr. Mitchell: I did not express myself very well. Many of the supermarkets' own brands are also produced in Grimsby. They are not leeching on the production of the branded products. It is the copycat products that, like leeches, are exploiting the investment in the branded products.

Dr. Howells: I thank my hon. Friend for clarifying that; I am sure that those huge companies will be glad that he did so.

The Government recognise that brands are essential to building consumer confidence, act as a guarantee of quality, and prevent consumers from being confused as to who made the goods and where they come from. Brands are a key factor in promoting trade in the marketplace, and brand owners play a key role.

Brands are important to consumers because, as my hon. Friend said, they help to identify the origin and quality of goods, and their manufacturer. They also help consumers to identify genuine goods.

As my hon. Friend said, fake goods may be of poor quality, defective, or even dangerous or damaging. They offer no guarantees or service agreements. We are greatly involved in educating consumers about the long-term effects of buying fake goods, which affects legitimate industry's ability to invest in the creation and development of new products.

I know that the hon. Member for Montgomeryshire (Mr. Öpik) is worried about the effects of counterfeiters and others who try to sell the unsuspecting public products that can be dangerous, especially pharmaceuticals, household goods and associated products.

Mr. Lembit Öpik (Montgomeryshire): Does the Minister agree that even when the quality of the lookalike products is not terrible, they stifle innovation? A turnover of £50 billion in branded products, and the ability to innovate, will be harmed if people always have to look over their shoulders. Having to compete with lookalike products reduces the opportunity for investment. Those products freeload on the reputation of branded products.

Dr. Howells: The hon. Gentleman put the point well. However, although I have great affection and respect for him, I do not entirely agree with him. Emulating products and their packaging sometimes promotes healthy competition. I am instinctively suspicious of the use of this place to build fortress walls round specific products. I acknowledge that adequate protection must exist and that

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adequate returns must be made on the original investment. I do not have much time, but I shall try to explain what I mean, and I hope that the hon. Gentleman will bear with me.

The Government appreciate the damage that intellectual property crime does to legitimate business. We are committed to working to improve matters. Indeed, our legislative programme, which includes specific improvements to the criminal provisions in intellectual property law, the implementation of the e-commerce and, in due course, copyright directives, will help in the fight against counterfeiting and piracy. Other initiatives, such as raising consumer awareness, improving co-operation, and the co-ordination of enforcement effort, are also important. The Government are currently involved in much activity in that context.

My hon. Friend the Member for Great Grimsby and the hon. Member for Montgomeryshire asked why there is insufficient protection against copycat or look-alike products. The Government are not convinced of the need for a change in the law to extend brand owners' rights against those who sell products in so-called look-alike packaging. The Trade Marks Act 1994 introduced several new provisions, which extended trade mark protection to, for example, trade dress, three-dimensional shapes, colours, sounds and smells. The Trade and Industry Committee studied the subject carefully and concluded that brand owners were not using legal remedies such as passing-off. I support those conclusions, and I do not believe that the law is deficient.

We believe that United Kingdom law on intellectual property is compatible with all the international conventions to which we are signatories. They include the World Trade Organisation's trade-related aspects of intellectual property rights agreement, which deals with unfair competition, and incorporates, as my hon. Friend pointed out, article 10 bis. However, I believe that that was an article in the Paris convention.

Mr. Mitchell: Although my hon. Friend says that the power of brand owners to protect themselves exists in legislation, manufacturers do not believe that it is worth the effort. Cases are difficult to prove in law; they are long and tortuous, and the verdicts have not been satisfactory. It is difficult to get people to come forward and say, "I was daft enough to buy this product instead of that one. I was deceived." The burden of proof is the problem.

Dr. Howells: I have to tell my hon. Friend that, as Minister for Competition and Consumer Affairs, which is one of my little titles, I receive scores of letters of complaint about all sorts of things ranging from new and used cars to sunglasses, which he mentioned. However, no constituent has ever written, or been to see me, to complain about being confused by a look-alike product on a supermarket shelf.

Mr. David Taylor (North-West Leicestershire) rose--

Dr. Howells: No, I will not give way because we have gone on for long enough on this one.

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Indeed, were I to take home an own-brand packet of cornflakes instead of Kellogg's, my kids would throw it out of the window. They are not daft, nor are most consumers daft enough to fall for such a thing. When the British Brands Group lobbied me, as it has done several times, it came up with a ludicrous example: some zappy young executive might charge into a supermarket, mistakenly pull out a bottle of Tesco's look-alike Fairy Liquid instead of the genuine article, and be dreadfully disappointed on arriving home, which would upset her executive evening. I simply do not believe that such things occur. Most consumers are a lot sharper than that; they are capable of making decisions. If companies are not satisfied with the deal that they get from their main retailers--the supermarket chains--let them sue.

Mr. Öpik: Will the Minister give way?

Dr. Howells: For the last time.

Mr. Öpik: I thank the Minister for giving way again, but does he not accept that the problem is serious but less dramatic? Brands innovate and copycats copy the brand image, but not necessarily the brand performance. Over time, expensive innovations are undermined by cheaper copycats, which makes it more difficult for brands to innovate. That harms the whole economy, not just the brands.

Dr. Howells: I agree, but there is a fine line here and a difficult balance to strike. We could talk all night about parallel imports, which my hon. Friend the Member for Great Grimsby mentioned, but would not fencing in the big established brands create hurdles too high for competitors to cross? I acknowledge that I am an unashamed proponent of competition--fierce competition--which brings the best products to the market and provides most benefit to consumers. Having to compete in fierce but fair open markets allows the best companies to evolve. However, as my hon. Friend and the hon. Member for Montgomeryshire said, the rules must be fair. I believe that the rules in this country are fair. I am no more in favour of the balance swinging violently in favour of rights holders than I am of all the controls being removed.

Mr. Taylor: Will my hon. Friend give way?

Dr. Howells: I will, as my hon. Friend has been present since the start of the debate.

Mr. Taylor: Can my hon. Friend confirm whether the Government have a timetable for reviewing the law on branding and the protection that it offers, particularly to firms in my constituency, which contains major distribution warehouses for the goods to which my hon. Friend the Member for Great Grimsby (Mr. Mitchell) referred?

Dr. Howells: My hon. Friend will understand that we all have factories, shops and distribution centres that sell--[Interruption.] Yes, including food shops. We grow some food in Wales, and we process it and sell it. I hope that he realises that I cannot undertake to put legislation

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on the statute book. I am not even convinced that things are so askew in this country as to warrant such a review in the first place. However, I give him, my hon. Friend the Member for Great Grimsby and the hon. Member for Montgomeryshire an undertaking that we will continue to keep a sharp eye on this subject. If we do not,

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the paradigm of fierce open competition that I described will not occur. A fine balance must be struck. That is the secret of a good economy.

Question put and agreed to.


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