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Lord Islwyn: My Lords, in considering the amendments and new clauses moved by the noble Lord, Lord McNally, the basic question which I think needs to be asked is whether the Government recognise that there is a problem. If they do, then it follows that I should ask: what are they going to do about it? I feel it is essential to recognise what a lookalike product is. As I understand it, a lookalike product is one with packaging which deliberately imitates, mimics if you like, that of a brand.

In putting these few points to noble Lords, I wish to point out that I have no financial interest whatever. The imitators have similar colours, pack shapes, labels and names which are used to achieve the deception. The lookalike products are produced by retailers, domestic manufacturers and overseas manufacturers. I should have thought that this commercial piracy should be outlawed.

The products are not to be confused with own label supermarket products, which are distinctly packaged. Needless to say, consumers are confused by the packaging, they tend to believe that there is a connection between the brand and the lookalike when none exists. Consumers face far less choice through the disincentive to innovate because of incessant copying.

So far as I am able to ascertain, this Competition Bill does not cover that issue of lookalikes. My understanding is that the World Intellectual Property Organisation--a United Nations body--has put forward proposals which would answer the problem. Those would tackle the lookalike problem and consumer confusion, and, not least, the damaging of a competitor's goodwill and reputation. Distinctive packaging costs as much to produce as lookalike packaging, so there will be no additional cost to the consumer.

We should all recognise that brands are important in a free market economy. They are the basis on which a differentiation can be made between products and the basis on which there is competition. By comparison, lookalikes distort competition by deceiving consumers and by reaping a financial reward from a competitor's

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ideas, investment, effort and risk. There would seem to be a weakness in UK law which makes this country particularly vulnerable to lookalikes.

The Bill and the amendment put forward could deal with the problem once and for all. I urge the Government to consider the issue seriously.

Baroness O'Cathain: My Lords, I oppose this amendment and in doing so, I declare an interest as a non-executive director of Tesco. But that is really not why I am speaking on this issue.

First, the noble Lord, Lord McNally, said that shoppers were confused. I assure your Lordships that shoppers are not confused. I pray in aid of that comment the fact that the Consumers' Association and the National Consumer Council--and I believe we all have great respect for both bodies--do not believe that shoppers are confused. At present there is an Institute of Grocery distribution code; there is the Trade Marks Act 1994; and there is the tort of passing off. That provides the trademark owners with adequate protection against infringement.

The noble Lord who has just spoken said that own-label products are not the same as lookalikes. But part of the argument seems to be that lookalikes are own-label products. Own labels are brands that have been built up by the retailers themselves. I believe that there is more confusion about this issue on the Floor of this House than there is outside on the part of the canny shopper buying the goods in the supermarket. I hope that this amendment will not be accepted.

Lord Fraser of Carmyllie: My Lords, after that brief intervention, I rise with some trepidation to say to the noble Lord, Lord McNally, that he has no need to apologise for having tabled these amendments again. My noble friend Lady O'Cathain is correct to say that this is far from an easy issue to resolve immediately.

However, from the last time we discussed this matter, it seems that some profitable progress has now been made because the Minister, Mr. Nigel Griffiths, has, I understand met with the British Brands Group and has given some indication of the recognition of a problem existing. If that is the Government's position, it would certainly be worth while to have that recognition placed on public record.

It may be that the Minister will have to say that that is not the appropriate time or there is not sufficient time to incorporate an amendment into the Bill. However, perhaps he will bring us up to date on where matters stand after that apparently useful meeting with Mr. Nigel Griffiths. I have no doubt that a large number of people and concerns would welcome such a statement from him.

11 p.m.

Lord Haskel: My Lords, as other noble Lords have pointed out, we discussed this matter in great detail in Committee. Then, as today, we have heard a range of opinions and I am grateful to noble Lords for giving us the benefit of their experience in this matter and for explaining to us their views about lookalikes. Clearly, it

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is important that a consensus is reached on the need to change and, if so, on the extent of any change. There obviously is a divergence of opinion and we have heard that reflected in the Chamber this evening.

These amendments would add a substantial new dimension to the Bill. They would create new rights and remedies which are far more extensive than those which owners of existing intellectual property and similar rights already possess. Under the guise of unfair competition they will widen the rights of the owners of such rights, amongst other things, to exclude their competitors from offering products that are similarly got up but not so as to confuse the consumer. I am not sure that the noble Lord, Lord McNally, is right when he says that his amendment will advance the cause of competition.

Amendment No. 209C in particular goes well beyond providing protection for branded goods from lookalikes. In effect it covers virtually any commercial activity which lessens or would be likely to lessen the distinctive character or advertising value even of the appearance or the presentation of a product or service. This would create a new right of action of an extremely wide scope. Much has been made of the confusion that consumers might suffer as a result of the practices which these amendments are designed to address. However, these amendments would create rights of action whether or not the act or practice causes confusion.

These amendments would effectively make redundant almost all existing trade mark legislation because of the much larger range of activities that would be actionable than is currently the case. Indeed the UK might find itself out of step with other member states in granting greater protection to registered trade marks than is provided under the EC Trade Marks Directive. Clearly, the implications of this need to be considered very carefully, in particular the impact that the adoption of very rigid unfair competition laws would have on the consumer. It is therefore important that all parties are given the opportunity to put their views forward.

Nevertheless the Government recognise the concerns which brand owners have expressed about the current remedies available to protect their products. The noble Lord is quite right: following the debate on this issue at the Committee stage, the Competition and Consumer Affairs Minister, Mr. Nigel Griffiths, met representatives of the British Brands Group and another trade group, Anti Copying in Design, which has similar concerns.

While it remains our view that this Bill is not an appropriate vehicle to deal with this issue, it has been agreed that those two groups will make further representations to Ministers on this matter. These groups are in touch with officials. I should again point out that there is not a consensus on this issue; in particular the Government are concerned to ensure that the interests of the consumer are fully represented and considered.

Opportunities to discuss unfair competition have also arisen since the Trade Marks Bill was debated in 1994, notably before the Standing Advisory Committee on Industrial Property. That committee has not

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recommended that there is a need for unfair competition legislation. The committee is continuing to review the issue as further evidence is presented.

I hope noble Lords will see that we are prepared to explore with the industry and consumers the appropriate response to the concerns that have been raised this evening. Meanwhile, there are effective remedies in common law and under the Trade Marks Act 1994 where confusion is caused in the mind of the consumer. I gave examples in Committee. Lookalikes in the form of the alleged imitation of packaging can be dealt with by the common law tort of passing off, which has proved effective. I referred to the Penguin v. Puffin case.

As I have said, these amendments in any instance would go well beyond the issue of defining unfair competition as acts or practices which would cause confusion to consumers. Given this, as well as the lack of consensus on what, if any, further remedies are needed in this area, and the Government's willingness to consider the representations I mentioned earlier, I invite the noble Lord to withdraw his amendment.

Lord McNally: My Lords, I am grateful for the support I received from the noble Lord, Lord Islwyn. Also, but for a bereavement, my noble friend Lady Hamwee would have been here this evening to speak in my support.

Picking through the Minister's reply, there were signs of some encouragement and some movement on this issue. I cannot agree with the noble Baroness on this. The amount of effort that goes into imitating a brand into which tremendous investment has already poured is the give-away. The own-brand products of the supermarkets stand and stand (I almost said "fall") because they are quality products based on the name of the supermarket. For example, people associate the names Tesco and Sainsbury with quality. We do not object to that. We are objecting to what has always seemed to me to be quite blatant passing off.

The Minister has gone through his brief pointing out that there have been attempts at legislation and that there are opportunities in the courts. I did receive one "behind the chair" intervention from the Government Chief Whip, which in the circumstances either reveals the horrid reputation I have in this House or his own suspicion. He asked me whether I intended to divide the House. Ministers already know that my interventions are meant only to be helpful in making progress so far as this Bill is concerned. I know that at five minutes past eleven the Minister is already considering whether there are not better ways of earning a living, such as running an international oil company. So in those terms and in the light of the noble Lord's reply, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 209B to 209D not moved.]

Clause 67 [Offences by bodies corporate etc.]:

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