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26 Jan 2010 : Column 1361

Amendments 211C to 211J (to Amendment 211B) not moved.

Amendment 211B agreed.

Amendments 212 and 213 not moved.

7 pm

Debate on whether Clause 17 should stand part of the Bill.

Lord Clement-Jones: My Lords, I hope that the Committee will bear with me as I was very forbearing and did not make a speech in the debate on the last group of amendments. The view on these Benches, and I suspect on several other Benches, is that this clause should not stand part of the Bill. Members on these Benches bow to no one in terms of being keen to see that our creative industries flourish and that their intellectual property rights are properly protected, but we do not believe that this clause should be part of that scheme.

Let us look at some aspects of Clause 17. We must recognise the anomaly here. Clauses 4 to 16, along with all the amendments proposed to those clauses that we have discussed throughout our consideration of the Bill, have concerned the Communications Act 2003, not the Copyright Act 1988. A moment ago the Minister justified this on the basis that it is all a matter of the tools being available. That is a strange justification and no doubt he will expand on it. The Government also claim that the clause itself has been improved by the amendments that are now to be made to it, but essentially its scope, as opposed to the procedures, remains unchanged. In fact, the Constitution Committee believes that the new amendments now to be incorporated could extend its scope. So these amendments and the Minister's arguments in their favour do not achieve this evening's silk purse award, I am afraid.

The purpose of Clause 17 is to amend the Copyright Act 1988 for the purpose of preventing or reducing the infringement of copyright by means of the internet. Why is this clause designed to allow changes to be made to the underlying intellectual property rights of creative copyright owners? No other part of the Bill deals with this aspect. Orphan rights are considered later, but Clauses 4 to 16 do not address this issue. Why is this clause not designed to provide more flexibility for the enforcement powers conferred by the Communications Act 2003? That is another conundrum.

This clause could make major changes to the underlying intellectual property rights available to copyright owners. Certain exemptions such as fair dealing could be deleted in certain circumstances. New rights could be asserted. It could redefine what is meant by and who essentially is infringing a copyright, particularly as regards the duties on ISPs. The Government claimed in their evidence to the Delegated Powers and Regulatory Reform Committee that they need to respond to technological change, and the Minister has today used the term "future-proofing". The industry, on the contrary, talks about particular threats: torrent sites, forums, blogs, streaming sites, aggregators and search engine sites. It also refers to video-to-audio conversion, stream ripping and hybrid sites. Many of these are hosted by cyberlockers, to which the noble Lord, Lord Lucas,

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referred, which are based outside the UK. I believe that there is also the concept of the newsgroup facilitator which encompasses some of these types of activities. All these are very specific activities, but what further powers to assert copyright under the 1988 Act are needed that are not possible under the provisions of the Communications Act 2003 as it is shortly to be amended?

The Government point to the defects in new Section 97A of the Broadcasting Act 1990 in tackling non-peer-to-peer infringement. That is all well and good, but where do the new provisions in the Communications Act 2003 actually fall down? Why has no specific clause amending the 1988 Act been suggested? The current threats are well known and the industry has enumerated them in considerable detail, but there is no clear evidence that underlying intellectual property rights are under threat and need to be changed.

Clause 17 explicitly does not create new criminal offences, but some would say that the gaps in the criminal law are far greater than those in the civil law. The noble Lord, Lord Fowler, referred to this earlier; I hope that the Minister has managed to give him some reassurance that the Fraud Act will cover camcorder use in cinemas, but there are other areas, and certainly some of the issues raised by the recent failed prosecution in the OiNK case beg questions about the criminal law. However, they will not be covered by Clause 17. Again, many would say that dealing with some of the criminal law aspects is a great deal more urgent than trying to deal with some speculative aspect of the civil law. The Government need to explain in what way Clauses 4 to 16 will be ineffective outside peer-to-peer infringement and they need to suggest a different process, probably as a way of amending the 2003 Act.

Over the years, copyright law has been shown to be reasonably flexible and adaptable. In our view it is the Government, despite reports such as the Gowers Review of Intellectual Property, which was excellent in many ways, who have failed to bring forward legislation to make the reforms that have been suggested-and after several years of labour into reviews such as Gowers. An example of this is that I believe the noble Lord, Lord Lucas, has tabled an amendment later in the Bill to reflect one of the key recommendations made by Gowers, which is that consumers should be allowed to shift formats. That is not included in this Bill. Why is that issue regarded as a second order reform when it concerns consumers so closely? Yet we get a sledgehammer of a provision in the form of Clause 17.

The sub-committee of the Delegated Powers and Regulatory Reform Committee recognises the changes, as the Minister made clear, but goes on to make the point that primary legislation is more suitable for these kinds of changes. The super-affirmative procedure is not an adequate substitute for Parliament's established way of dealing with matters of complexity and importance-through primary legislation. With Clause 17 we could be placing draconian new duties on ISPs and preventing access to certain websites. "Tackling online infringement", to use the wording of the clause, is not a narrow purpose when in the future probably most of us will derive our entertainment over the internet.

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We must agree with the words of the Constitution Committee in the final paragraph of its report,

Lord Triesman: My Lords, I am among those in the Committee who did not know whether they should have spoken on the last group or on this group, but this is probably as good a time as any, because I hope to argue that the noble Lord, Lord Clement-Jones, is fundamentally wrong-he put the issue in the starkest terms-about whether this clause, or something very like it after the Minister and his team have given it further thought, which they have committed themselves to do, is needed.

I sense that there is a good deal of agreement, perhaps consensus, that if something is written that is effective in ensuring that what happens in the future can be safeguarded, there will be a great deal of support for it. It is very important that that should be said, because we are talking about a sector that is approximately 8 per cent of our economy. It is quite hard to measure; I know that some research teams in universities have been trying to measure it, but it is hard to know exactly how to define it. However, the figure is certainly of that order or greater. This is also the sector which is growing fastest, which shows the greatest capabilities in innovation and invention and which will be very important to us in the future. It is also a sector in which many new small firms, which are probably our economic future, will emerge.

I do not think that it would be wrong or-I say this with respect to the noble Lord, Lord Howard-contemptuous were Parliament to think hard about what it might do to protect those interests in the long run, since they are so fundamental to us, if we can get the right formula for doing it. I think, though, that the noble Lord, Lord Clement-Jones, wants to have his cake and eat it. He says that he is in complete sympathy with everybody in the Committee who has argued that these are very important parts of the economy, that we want to protect these properties and that we want to protect copyright, yet he wants to take a step that would destroy the possibility of doing that in future.

I take a simple view of this; it is an evidence-based view based on having been the Minister for Intellectual Property and having heard the arguments over quite a long period. It is not simply a matter of theory, although there are, of course, important issues, which I greatly respect, about the powers of Parliament and Parliament's scrutiny of legislation-one could not other than agree about that-but the evidence is pretty significant. I shall give two examples of why I so profoundly, but respectfully, disagree.

The first comes from a firm that is very large and has significant UK interests-BT. I have no interest in BT other than to use it as an example. In deciding how to allocate its research funds-which sorts of research might be beneficial in the future-and because its research funds were very large in an industry that was moving rapidly, it had what was, in effect, a research council inside the company. It looked at all the competing demands for research, both internally and in some cases externally, it evaluated them and it tried to work out what it had best do in the future.

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What interested me a great deal was that, in doing that, BT tried to identify, over a period of a decade in advance each time it did it, what was likely to happen, not just in its industry, but in a number of industries where there might arguably be some sort of link between what it did and what others were doing. This was because the commercial interests and the capacity of that firm were dependent on having some sort of sense of the future. Occasionally, it identified things that would happen; occasionally, it identified them at the wrong time. However, it will come as no surprise to your Lordships that, broadly speaking, it missed a high proportion of the things that were going to happen, because these are very hard to predict.

I suggest to the Committee-before I come to my second example, which I hope your Lordships will feel is significant evidence-that the reason for that is straightforward. The reason why it is difficult is that, although it may not be easy to predict a major development when a paradigm has shifted, usually many of the things that have led to it in science and technology and engineering have been reasonably visible to a significant part of the research world as it was happening. However, once one of those events has happened, innovation within that paradigm happens incredibly fast and incredibly unpredictably. Anybody who tells me that they know that it is going to happen or can chart its characteristics-in the way that the noble Lord, Lord Clement-Jones, believes that, in listing the things that we know currently, we might be able to say what will happen in the future-misconceives that kind of development and how it happens.

7.15 pm

That is why I want to illustrate the point with a second example-the example of Shawn Fanning, who will be known to at least some in the Committee by history. He was a freshman student at Northeastern University in Boston who was looking for a simple way to share the music that he liked, at the ripe old age of 18, with his friends. He was an affable sort of bloke and he liked to share the things that he liked. He decided, soon before he turned 19-he did it when he was 19-that staying at university was not the best way of spending your time and he set off, with the help of a friend and his uncle, to find a way of turning the MP3 format, a really innovative code and innovative way of compression, into a means of sharing the music that he liked. In that way, Napster was born.

I know that Napster finally fell foul of the law and was suppressed and many other variants then came about, but the reason I mention the example is that the period from the first moment when he seemed to be thinking about this and nobody else knew to the moment at which he almost undermined the music industry in a fundamental way was nearly 18 months. In fact, the period from the time when anybody might have observed it happening to its happening was rather more than five months, but only just.

I make the proposition to the Committee that our method of legislating, of which we are rightly proud-it requires a great deal of detailed interrogation of information in order to ensure that we do it in the right way-is not really in a race with events of that

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kind. It truly is not. We are a bullock cart going against a jet aeroplane, when you think of the speed and ability of that kind of innovation.

That is where I come to the point that I find so hard to understand about the argument that has just been put as to why this clause should be struck out. It is not hard to list all the things that have happened and say, "Have we covered them in legislation?". However, when you look at Napster, or at the efforts that were made by BT, which I have tried to illustrate at least briefly and I hope with enough detail for your Lordships to recognise the process, what you cannot do is say, "By the way, these are the next things that are going to happen and this is the speed at which they are going to happen and we have got a grip of all of them and will be able, by primary legislation, to deal with them". We will not be able to do that. That is a straightforward fact-we will not do it by primary legislation. If it is insisted on, then we have decided not to do it.

I am fully receptive to the powerful argument that there may be alternative economic models-we would want to see those-but the argument that we will do this through primary legislation is simply not credible in these circumstances. Therefore, we will have to have a clause of this kind and it will have to have the effect of this kind of clause. I do not personally have huge difficulties with the clause as it is.

Just in case anybody wishes to say to me, "You would say that", because, like the noble Lord, Lord Lucas, I have intellectual property rights, which are sold in the football industry-I declared that interest earlier in Committee-let me say that I know perfectly well that what we know about streaming now will be superseded. I do not know when or how fast it will happen, but I know that it will most certainly happen, just like every other innovation has happened. It will catch us by surprise and affect a number of the things that are fundamental. The way in which we fund grass-roots football is potentially eliminated in significant part. That will be true in other parts of the sports world as well, including the Premier League and a number of other sports.

I hope that the Committee will forgive me for the length of the intervention, but I ask noble Lords to ensure, if we are serious about these industries and their value to our economy, that either we have the current Clause 17 or something very like it or we stop pretending that we intend to protect these industries.

The Earl of Erroll: My Lords, what I have said throughout the Bill has not been about trying to hit rights holders. I think that that has been misunderstood by several people who are very concerned about the economics of this-particularly, and I fully agree, the economics of producing things that require a lot of capital input, such as films, sports, games and music, which are expensive to put together and put on. I am not challenging the idea of trying to protect copyright. My challenge comes when someone says, "We've got to do something". The law is not here for PR purposes. It is not about sending a message. Laws have to be effective or they are pointless. Sending messages that do not work merely debases the law in the public's eyes, because then they just ignore it.

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It has always been realised that copyright is much weaker than other rights. Patents get only 30 years to recover because they are better protected and easier to enforce; the whole law is orientated that way. Copyright is a harder right to enforce, particularly because you can get copyright both in the original work and in derivative works. It is a much more complicated situation. That is why copyright now gets lifetime plus, I think, 70 years, which is probably excessive-a very long period in which to recover your initial investment. I worry, like the noble Lord, Lord Lucas, about effectiveness. Will this work or not?

Unfortunately the noble Lord, Lord Fowler, is not here to hear my next point: camcorders are covered perfectly well. It is unlawful, it is a breach of copyright, to take a camcorder into a cinema and make a copy of a film. This Bill does not cover that at all; it is about communicating and distributing over the internet. If you put that camcorder copy out over the internet for free on whatever network, the Bill will cover it. If you sell that copy, it becomes a criminal offence and comes under the Fraud Act. The law is there already to deal with camcorders and I am delighted to hear that people who do these things have been prosecuted under it, as they should have been. The existing law is adequate.

I agree entirely with the noble Lord, Lord Puttnam, that the situation is a mess. That is our problem. I have said for a long time that we need to rewrite the Copyright, Designs and Patents Act 1988, which is not right for the digital age. It will be a complicated process; any new Act will have to balance a lot of rights and look at the international aspects, such as how other countries do it and what is effective, so that we are not just doing our own thing. That needs to be done at a parliamentary level, not just by a Minister in consultation with people whom he thinks should be consulted.

I come on to the wise words of the noble Lord, Lord Clement-Jones. What exactly is modifying that Act going to do? It is not going to cure technical points, because I do not think that the Act deals with such points-unless we want to put a whole technical section into it, which would be a very strange thing to do. The Act could in fact be used to loosen copyright, which might be a good idea, so that mashups, for instance, were no longer a grey area. I could take a short clip from one of the films of the noble Lord, Lord Puttnam, overlay it with a bit of music by one of the noble Lords here, put my own content underneath it and put it on YouTube, at which point I would have breached maybe three copyrights. This is going on the whole time. Because it is so general, at the moment the question is, "Where's the copyright?". Maybe the Minister has secret ambitions to do that behind the scenes; I do not know.

I cannot understand why the Act is modified in the Bill. The noble Lord, Lord Triesman, talked about Napster, but Napster was always unlawful; it was always covered by the law. Trying to change the copyright Act would have made no difference to Napster at all. The 1988 Act predated Napster, so it was covered. We did not have to change any part of the law. If we had had to change it, Napster would be operating in Britain right now quite legally, because we have not

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changed the law to cover it. It has always been unlawful to download stuff in that way. That is exactly what we are dealing with now.

The Copyright, Designs and Patents Act 1988 is adequate for dealing with these things. The challenge arises because rights holders could not keep up with the variety of material that was being transmitted over the internet. That is what the Bill is for: to try to introduce some measures whereby it is easier to offload some of the problems of trying to catch up with the people responsible on to those who can track them-that is, the ISPs-and then use some legal process in order to crack down on them, doing in a different way some of the things that are normally done through the civil courts as a breach of copyright. The Government have started to interfere in civil law by producing measures where they are going to mandate a crackdown. That is an interesting precedent because it can be used elsewhere for other things that the Government do not like, which is why I do not like the provisions between Clauses 4 and 16. Clause 17 is even more dangerous.

The noble Lord, Lord Puttnam, has talked about Britain almost as if it were a sea of piracy in an otherwise law-abiding world: if we do not pass a law that lets us crack down on this, Britain will be isolated, all the creative people will abandon it and so on. But America is just as bad, as is the rest of the world. The French have failed to get a similar measure through. They still hope to, but it got knocked out by the French Parliament-Sarkozy did not get his way. I may have the right players in there, I may not, but it does not matter; I do not think that the French got the "three strikes and you're out" clause through, although they are hoping to bring it back and get it through. Sweden does not have such measures-it did not dare go that far. It sent some letters and there has been a bit of a crackdown, but levels are back up where they were. We are not an isolated case.

It will make zero difference where anyone locates themselves. Our creative people will still face the challenges that they do now: to get the right contract from day one with the people who will sponsor them or, if they do not get a nice contract or do not get someone to sponsor them, how to get out there into the wider world, get their stuff on to the internet and find other methods of distribution.

Now I come on to Clause 17. I wanted to put in context why the clause is totally unnecessary and may have all sorts of unintended consequences that will be very dangerous. Even the super-affirmative method of bringing statutory instruments is dangerous. Look at the Government's general dismissive attitude to 90 per cent of our suggested amendments. Will that be any different just because there is a super-affirmative statutory instrument? No, it will not, because they do not have to amend anything. We cannot force any amendments through; at the end of the day, we have to accept it.

The previous time when I ran into this business of trying to block statutory instruments, which was over the Regulation of Investigatory Powers Act when we forced through an amendment that meant that the Government would have to come back within a year with a better statutory instrument, there were mutterings off that this was a constitutional crisis, this was not the way that things should be done, it was going

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against the whole way that Parliament worked and so on. We were threatened behind the scenes and told that we should not be doing it; it would bring the place down. The Minister was so frightened that he spent 25 minutes trying to introduce a minor statutory instrument.

Anyway, these powers are far too wide, they are quite unnecessary and I cannot see any purpose to them-except possibly to start putting mandatory charges on people because it allows us to impose charges, fees and so on, but that is not the sort of thing that the Act should be for. If we are worried about amending things, I note that we manage to have a criminal justice Bill every year to amend huge tranches of legislation and we seem to have an education Bill about every two years. Maybe the Home Office could give up some of its Bills and we could just sort out copyright.

7.30 pm

Lord Howard of Rising: My Lords, there is an underlying problem here. The powers that the Secretary of State is claiming are necessary to deal with the problems connected with our creative industries are incompatible-or sit uncomfortably, whichever way you want to look at it-with a parliamentary democracy.

I am sure that he did not mean to do it, but to my mind the noble Lord, Lord Triesman, argued strongly in favour of the amendment of the noble Lord, Lord Clement-Jones, because if things move so quickly, the 90-day window asked for by the noble Lord, Lord Puttnam, will be meaningless. It will all have happened. If it is all going to happen anyway, why are we giving these extraordinary powers to the Secretary of State and not retaining Parliament as the ultimate arbiter of what happens?

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