Copyright, etc. and Trade Marks (Offences and Enforcement) Bill

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Michael Fabricant: I said that.

Mr. Waterson: My hon. Friend has made that point, and it bears repetition. It also reminds me of the situation that I have become involved with, because I represent a constituency on the south coast, of criminal gangs that have moved out of drug trafficking and other high-risk activities into tobacco smuggling, because the penalties for that are much lower but the rewards are almost as great. That provides another example of the flexibility of criminals in terms of how they make their ill-gotten gains. Crimes such as trafficking and trading in pirated CDs are almost as profitable to them—if not more so—than some of their other activities, but if they end up in court for committing them they are likely to face much lower sentences.

The alliance has also provided evidence from the police service in Northern Ireland about the strong links between crime and terrorism. We know that terrorism is a business, as much as it is anything else; that is certainly the position in Northern Ireland. There is powerful evidence that organisations such as the Real IRA are involved in the counterfeiting of goods such as CDs and DVDs. There is also a reference to a threat assessment by the National Criminal Intelligence Service that states that organised criminals are increasingly getting involved in counterfeiting and the theft of intellectual property.

With regard to the matter under discussion, it is important not to lose sight of specific examples, of which there are many. I will refer to only a couple of them. It is important to state that we are talking not only about money and profits, but lost jobs. We are talking also about significant threats to public heath, and to people's lives. The example of the pirated Star Wars figures highlights that; they were found to contain 50 per cent. more lead content than is allowed by health legislation, and that is very dangerous for young children.

I was also struck by examples of the growing trade, particularly in the third world, in pirated pharmaceuticals. Fake Losec, which is an anti-ulcer drug, was impounded as it entered the United Kingdom. It had been made in Italy, and its manufacture was financed by Russian mafia bosses. Zantac, which is also an anti-ulcer drug, was also being manufactured illegally.

A disturbing report was published in The Lancet in June 2001. Researchers studied the pharmaceuticals that were available in Nigeria, and they found that counterfeiting was taking place on a massive scale. Almost 50 per cent. of the samples that they examined

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had not been made by the usual manufacturers. That has vast implications for the United Kingdom and the third world with regard to resistance to drugs, side effects and people dying from, and continuing to suffer from, conditions that such drugs are meant to alleviate. For all of those reasons, and many more that time does not permit us to discuss, the Opposition welcome the Bill. We hope that it will have a painless and swift passage, rapidly become law and allow all the relevant authorities to enforce intellectual property rights. I commend the Bill to the Committee.

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): I welcome you to the Chair, Mr. Benton, and wish you, all hon. Members and everyone who assists us in our work as Members and Ministers a happy new year.

On Second Reading, the Government said that the Bill would have our full support. Intellectual property crime affects businesses, consumers and society in general, and proven links exist with serious organised crime. We therefore welcome the Bill, which brings about rationalisation and harmonisation of the existing criminal provisions in intellectual property law, and we look forward to it being enacted.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2

Search warrants

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

Dr. Cable: I shall say a few words about the clause, which introduces one of the three substantive changes. It is a means of widening the scope available to the police for seeking an effective search warrant from a justice of the peace, thereby making enforcement more effective.

Currently, much of the investigatory work is carried out by trading standards officers in conjunction with the trade. Twickenham is the centre of the organisation called FACT—the Federation Against Copyright Theft—which does much of the investigatory work. However, the police become involved, and must secure a search warrant. Powers already exist under various pieces of legislation—in relation to intent to defraud, for example—and copyright provisions already exist under the 1988 Act. The powers are somewhat circumscribed, and under the existing legislation the police must be able to demonstrate that there is a good reason to believe that the people involved in copyright crime are involved in large-scale importing—the Chinese triad phenomenon—or that their UK operation is producing the goods in-house to sell them.

The most common manifestation of copyright crime is likely to be a stock of goods, which is available for sale through a street market. That, in itself, does not constitute ground for a search warrant. The purpose of the clause is therefore to widen slightly the scope for a search warrant to enable the police to secure it on good grounds of suspicion that a substantial amount of

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counterfeit goods is involved for sale. They will have to prove that, and give evidence on oath—there will be no serious encroachment of civil liberties in terms of search warrants—but the clause will remove one of the potential anomalies under existing provisions.

One of the other tidying-up aspects of the Bill—a thread that runs throughout the clauses, some of which are complex—is that the nature of copyright and intellectual property is changing. Since the existing legislation was passed in 1988, new concepts, such as decoders for satellite television, have come into existence. Much copyright theft is associated with that—for which current legislation does not provide—and the Bill enables such concepts to be built into the law. All the policy implications will be dealt with next Monday when the House considers the communications Bill. The Bill before us deals with copyright theft in relation to search warrants, and applies it especially to aspects such as decoding machines and music recording, for which existing legislation does not provide.

Mr. Chris Bryant (Rhondda): I note the hon. Gentleman's comments on the changing nature of technology and how that inevitably affects copyright law, which is effectively a creative right, as Adam Smith would have it. How confident is he that the Bill will stand the test of the incorporation of the European copyright directive into British law?

Dr. Cable: I was in Brussels about six weeks ago and I asked that question of officials and Members of the European Parliament whom I met in the relevant directorate. I discussed briefly the Bill with them and they were confident that the two are compatible. However, as the hon. Gentleman said, we are discussing radically changing technology and, in five years' time, we may well need to amend the legislation.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Clause 3

Forfeiture: infringing copies, etc

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

Dr. Cable: This will be the last contribution that I shall make, unless members of the Committee wish to challenge other clauses.

The clause is long and raises a separate set of issues. The reason for the length of the clause is almost entirely legal to achieve compatibility with different bodies of legislation. The clause relates to forfeiture, which is a problem that arises when the courts and authorities must make a decision about how to dispose of goods that come into their possession on a large scale. A typical problem arises when authorities accumulate many counterfeit goods because of a raid on a market stall and the stall holder cannot be prosecuted because he or she disappeared or gave a wrong name. There must be provisions in the law to dictate how to deal with the goods.

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Specific legal technicalities are associated with copyright because if one deals with trade mark law, the courts may order that the trade mark label is removed and allow the goods to be simply sold or disposed of. However, that would not be practical if considering counterfeit compact discs. The law must be couched to deal with the problem. Under the clause, the forfeiture provisions will be compatible with trade mark law, when appropriate, and will be brought under the all-embracing framework of the Consumer Protection Act 1987, which deals with the forfeiture of unsafe goods.

The clause is essentially a legal tidying-up operation that provides for the proper disposal of forfeited goods.

Question put and agreed to.

Clause 3 ordered to stand part of the Bill.

Clauses 4 and 5 ordered to stand part of the Bill.

Clause 6

Search warrants

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

Mr. Waterson: I shall not detain the Committee for long. However, before we bid farewell to the Bill at this stage, I shall raise two or three points with the hon. Member for Twickenham about enforcement. No matter how well intentioned and excellent the provisions of the Bill may be, it is important that they are enforced after it becomes law. I fervently hope that it will be enacted. If there is not proper enforcement, the process in which we are involved will be almost a complete waste of time. Will the hon. Gentleman confirm that the Bill will not increase dramatically criminal penalties but will harmonise criminal penalties for cases in which there are current anomalies?

I return to a point that I made in an intervention about the tariff, which I address more to the Minister and his advisers. It is desperately important that we do not pass maximum sentences. Ten years is a sensible maximum sentence given that we may be discussing hardened criminals—I shall not make the obvious joke about stealing the intellectual property rights to viagra—and serious sums of money are involved in such activities. For both reasons, a court may well wish to impose a sentence of up to 10 years. The tariff adopted after the Bill becomes law should reflect that. The committee of judges which decides the tariff may set it at a low rate when considering such crimes in comparison with others. We must send a message—and this is my only way of sending it to those who produce the tariff—that such crimes are potentially very serious, involve large sums of money and damage respectable businesses and our economy.

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The second point, which I do not wish to labour, concerns the potential damage to people's lives caused by, for example, toys having a dangerously high lead content, badly constructed Christmas tree lights or counterfeited defective Bob the Builder toys. The

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worst example is of drugs being pirated on a massive scale, especially in India, and then sold to countries in Africa and elsewhere.

Who will enforce the provisions? The explanatory notes are more helpful than usual. In paragraph 15, assurance is given that the Bill will not involve any additional public expenditure and that there may well be cost savings. The following paragraph states that

    ''increases in manpower are not anticipated.''

That is a tad worrying because, as those of us who have been closely involved with our local authorities know, trading standards departments are under enormous pressure. They are almost always the first to experience cuts and have a massive range of legislation to enforce, ranging from noise and nuisance through to dodgy timeshare selling. Not matter how well intentioned and committed the men and women who work in those departments are, they do not have time to do everything.

The police would also be involved, and I should not need to mention the problem of police numbers and so forth. A question of priorities would arise. The Government must consider the issue of resourcing. In fact, I am surprised not to have received a brief from the Local Government Association on the under-resourcing of trading standards officers. Such points should be considered, otherwise what we do in Committee will make no difference. I welcome the Bill, wish it a fair passage and hope that it is on the statute book as soon as possible.

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Prepared 9 January 2002