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Grand Committee

Monday, 28 January 2013.

Enterprise and Regulatory Reform Bill

Committee (9th Day)

3.30 pm

Relevant documents: 9th and 10th Reports from the Delegated Powers Committee.

The Deputy Chairman of Committees (Baroness McIntosh of Hudnall): My Lords, I remind the Committee that in the event of a Division in the Chamber the Committee will adjourn for 10 minutes from the sound of the Division Bell.

Amendment 28C

Moved by Lord Jenkin of Roding

28C: Before Clause 65, insert the following new Clause—

“Director General of Intellectual Property Rights

(1) The Copyright, Designs and Patents Act 1988 is amended as follows.

(2) In Part VII (miscellaneous and general) at the beginning insert—

“Director General of Intellectual Property Rights

A296 Director General of Intellectual Property Rights

(1) The Secretary of State shall appoint an officer to be known as the Director General of Intellectual Property Rights (“the Director General”).

(2) The Director General has a duty to—

(a) promote the creation of new intellectual property,

(b) protect and promote the interests of UK intellectual property rights holders,

(c) co-ordinate effective enforcement of UK intellectual property rights, and

(d) educate consumers on the nature and value of intellectual property.

(3) In performing those duties, the Director General must also have regard to the desirability of—

(a) promoting the importance of intellectual property in the UK,

(b) encouraging investment and innovation in new UK intellectual property, and

(c) protecting intellectual property against infringement of rights.””

Lord Jenkin of Roding: My Lords, this proposed new clause calls for a new appointment of a director-general of intellectual property rights.

More than a year ago I started to be approached by a number of bodies, individuals and organisations who voiced their fears about threats to their rights as owners of intellectual property. I held discussions with representatives of publishers from the music industry, the Authors’ Licensing and Collecting Society and a number of others, including those representing designers. I attended a number of meetings where these fears were voiced with increasing intensity and became convinced of the need to ensure that the then projected legislation really did protect the owners of all kinds of IP.

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I was interested to read a biography of my great-grandfather recently, who was a distinguished 19th century engineer—the first professor of engineering at Edinburgh University. He and Sir William Thomson, Lord Kelvin, had considerable battles with financiers and others to ensure that they enjoyed the fruits of their inventions by means of patents, which are simply another form of intellectual property. Therefore, my interest in these matters may be to do with my genes.

I have also listened to the strong case for what is called open access: that is, the policy of enabling free access to the results of publicly funded research and other similar sources. This is strongly supported by my right honourable friend the Minister for Science, David Willetts. I remind noble Lords what he wrote in his article in the Guardian last year. The article stated that,

“we will make publicly funded research accessible free of charge to readers. Giving the people the right to roam freely over publicly funded research will usher in a new era of academic discovery and collaboration, and will put the UK at the forefront of open research”.

He added:

“The challenge is how we get there without ruining the value added by academic publishers”,

and, of course, many others. We know that in the other place an amendment was made to the Bill which protects those who publish the results of such research. However, my right honourable friend described this change in open access as a “seismic shift”. The policy covers research councils, universities, libraries, archives and museums. It also covers electronic publications from these sources.

I must make it clear that I warmly welcome this open access policy which seems to me to have a great deal of merit. However, I must, of course, mention the challenges to which my right honourable friend referred. I have been made aware that major commercial interests, many of them in the electronics industry, especially the interactive sources, find the obligations to respect copyright a tiresome and expensive barrier to their business. They appear to claim that they, too, create public benefit and that the privileges of open access should be extended to them as well. Their solution has been to argue strenuously for relaxation of the terms and application of copyright, and some of those arguments are reflected in the Bill. We are faced with the need to reconcile legitimate open access with the essential protection of the rights of the creators of intellectual property. That may be something of a simplification, but we will have ample opportunity to explore that as we go through the rest of the Bill. I must make it clear that I do not wish to trespass upon the debate we shall have on the many particular policy issues dealing with exceptions and orphan works, collective licensing, codes of conduct and the ombudsman, which are all subject to later amendments that deserve very thorough scrutiny.

It is where other interests see this as a route to circumvent the constraints of copyright and other legal protections for property rights—and I assert very firmly that they are property rights and have been seen as such by the courts for very many years—that the conflicts lie. I start by quoting and endorsing the

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statement by the Alliance for Intellectual Property. It is a long statement, but I will quote only the essential paragraph:

“IP lies at the heart of every British success story. It is essential to the creative industries which support around 1.5 m jobs, contribute over £36 billion to UK GVA (DCMS Creative Industries Economic Estimates). IP is also the basis for the £16 billion which companies invest annually in the UK economy by building brands, and allows the UK’s brand-building industries (including advertising, marketing and design agencies) to generate around £1 billion in Gross Value Added through exports alone. In addition, the design industry employs up to 350,000 people and UK businesses spend around £35 billion on design each year”.

We are not talking about fringe businesses. This lies right at the heart of a great deal of British industry. It is a powerful case, and I have to say to the Minister that I am not wholly satisfied that the Government recognise the strength of that case.

An example of the very real concern that the threat to copyright, including design, patents et cetera, has engendered, was a letter sent to the Times last March signed by members of the Creative Coalition Campaign.

“Copyright is the central intellectual property right that underpins the creative and knowledge economy. Films, music, games, books, could not get made in their present quantity and quality without a robust system of copyright. It provides the legal foundation for the ability of companies to license or sell works, and to invest and innovate”.

There have been other statements as well.

I am sure that noble Lords are aware that on 29 October last, the All-Party Parliament IP group produced a report, The Role of Government in Promoting and Protecting Intellectual Property, which urged the Government to get a grip on how IP policy is made. My honourable friend John Whittingdale, the chairman of the committee, said in a press release:

“The current system of creating intellectual property policy just isn’t working. IP needs a champion within Government, who will recognise its significance and who will have the influence to co-ordinate policy across different departments. From trademarks to patents, design rights and copyright, UK companies depend on their IP rights to succeed and thrive. In this difficult economic climate it’s especially important that Government backs British businesses on IP. We hope that Government will take note of our proposals”.

It was a fairly hard-hitting report, which made the point that the Intellectual Property Office had lost,

“the confidence of a broad swathe of its stakeholders”.

I come to Amendment 28C, which picks up on the group’s call for a champion of IP, calling for the creation of a new post, the director-general of intellectual property rights, a duty to promote the creation of IP and to protect it where it exists. I know that noble Lords will already have studied the amendment, which says in proposed new subsection (2):

“The Director General has a duty to … promote the creation of new intellectual property … protect and promote the interests of UK intellectual property rights holders … co-ordinate effective enforcement of UK intellectual property rights, and”—

this is a very important one—

“educate consumers on the nature and value of intellectual property”.

I add that as an important one, because it is clear that quite a lot of the public think that it is perfectly all right to download all sorts of things on to their computers and telephones without paying for it—because

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there it is, after all, and they will not be found out. That is the essential of what the amendment points out.

The committee referred to the IPO as having lost the confidence of its stakeholders, but the IPO has an entirely different function, as was made clear by the evidence that it gave to the all-party group. Some of us have had the privilege of listening to people from the IPO in the meetings that we have had. The plain fact is that the IPO may be an efficient registration body for the registration of IP rights, but it is not and never has purported to be a champion of IP. On the contrary, it sees its role as holding the balance between creators and users. This view is reinforced by the general terms of the report, Modernising Copyright, published on 20 December last year and announced by the right honourable Vince Cable when he launched the report. It declares its intention to safeguard the rights of IP creators, but almost every single one of the changes recommended points in the opposite direction. For instance, there should be more exceptions to copyright allowing access without paying. There are many other examples, which we shall no doubt deal with in the respective amendments. Much of the rest are simplifying where practice and confusion have reigned and uncertainty has become rife.

The creators and owners of IP must have someone in government to speak up for them, and that is what the amendment is intended to establish. Since I tabled it, two or three weeks ago, I have been astonished by the wide support that it has attracted. It is seen by a great many of the bodies that represent the creative industries as something that really makes sense.

I referred earlier to the Alliance for Intellectual Property and I also cite the BPI, which represents the British recorded music industry. They ask noble Lords to support the amendment arguing that the director-general should be accountable for ensuring a framework for IP that promotes investment in new content, protects the investment from theft and counterfeit and educates consumers on the importance of UK intellectual property to jobs, growth and export strength to the United Kingdom. There is also the Creators’ Rights Alliance, which speaks for some 14 bodies, including writers, illustrators, picture libraries, composers, journalists, musicians and many others.

Whatever the IPO and my noble friend’s department may say, this widespread demand for a champion for IP seems to have gained a great deal of support. It must not be swept aside. Of course, we will not be voting today because one does not vote in Grand Committee, but this is one of the most important amendments before the Committee. I beg to move.

3.45 pm

Lord Clement-Jones: My Lords, I will speak first to Amendment 28C and then to my own Amendment 28D. I support the amendment proposing a director-general of intellectual property rights, put forward so eloquently by my noble friend Lord Jenkin. I was extremely interested to hear about his Scottish connections, his great-grandfather and his relationship with Kelvin. There was a programme recently on the BBC about innovation that described how Matthew Boulton, James

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Watt's partner, succeeded in making sure that Watt derived benefit from his inventions and the modifications that he made to the Newcomen engine. It must be one of the few cases where innovators and inventors received a proper reward for their inventions. That was heartening. Perhaps it was as a result of Matthew Boulton's commercial enterprise that the Scots have been so inventive over the past couple of centuries.

As my noble friend mentioned, the UK is a world leader in intellectual property. He put some significant figures forward in terms of employment and the value of the creative sector. Therefore, how the Government develop IP policy is vital for our economy. We hear much about becoming a knowledge-driven economy. IP is vital for that and for those whom it supports, such as in manufacturing.

There is concern, however, extremely well reflected by my noble friend, that the IPO is not in fact a champion of intellectual property. I was a member of the All-Party Parliamentary IP Group inquiry into the IPO. From the evidence that I saw, officials did not see their role as being to champion intellectual property. Indeed, officials found it difficult to describe intellectual property as a property right even though nearly all creators believe that fundamentally. In fact, there were three important conclusions. My noble friend mentioned them but they bear repeating: IP is a vital foundation of economic growth, there is no champion of IP policy within government and that the IPO's policy-making function has lost the confidence of a large number of its key stakeholders. That is pretty unusual. The third point bears repeating as it is a very important conclusion.

It is significant that in their paper last year on the role of the IPO, the Government came to certain conclusions, which I think bear quotation:

“In coming to this conclusion, he”—

Hargreaves—

“argued that intellectual property policy had been insufficiently directed towards the objective of economic growth and that there had been instances in which IP policy had been developed in ways that were inconsistent with the economic evidence”.

Noble Lords can see the thrust. They continued:

“To improve the focus of IP policy on growth, the Review proposed that the Intellectual Property Office, as the Government body responsible for advising Ministers on the development of IP policy, should have an overarching legal mandate to promote innovation and growth, and state that IPO decisions will be based in evidence and take due account of the impact of the IP system on innovation and growth”.

I should say in parenthesis that your Lordships will note that there is no statement about the importance of intellectual property in the middle of that statement about innovation and growth. They go on:

“The Government wishes to retain the current structure of the IPO as an Executive Agency, combining practical experience of the IP system, gained through rights granting and advisory services, with policy responsibility. There are advantages in maintaining an organisation which has a blend of technical expertise and policy development skills, and the development of policy should not be done at arm’s length from Ministers”.

That was the major conclusion—that the IPO would pretty much stay as it is, with a stronger emphasis on innovation and growth.

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Some of this is disappointing, especially in the light of the kind of proposal that we have here, but it is also fairly breathtaking. I shall not dwell on those comments unduly but the fact is that, as was recently demonstrated by Professor Hargreaves before the Culture, Media and Sport Select Committee, the evidence base for his own reports has been flimsy at best when justifying certain copyright exceptions. The impact assessments for most of the relevant clauses in this Bill are also wholly inadequate as a result. The mantra that somehow copyright is a barrier to innovation and growth runs through the Hargreaves report and the work of the IPO, I am afraid.

Let us contrast that with the recent report on access to finance for the creative industries by Ian Livingstone, which is very positive about the need to recognise and build on the value of creative content. He fully recognises the benefit derived from promoting the creation and retention of intellectual property, alongside finance, skills creation and other factors.

Therefore, I hope—especially in the light of this amendment—that the Government will rethink their approach to intellectual property policy. As the feasibility studies by Richard Hooper and the work thereafter show, ambition within the UK’s collective licensing bodies and the creative industries to form hubs with other copyright owners—for example, for licensing music for services of every kind—right across the globe, making the UK a global licensing centre, really does exist to a powerful degree. The UK’s collective licensing bodies are investing in the technical expertise, processing power and administrative efficiency to handle billions of uses of music and other intellectual property, and to charge, collect and distribute income with precision.

I believe that that is of far greater significance across the board in the technology sector and the creative industries than the copyright law reforms proposed, whether in this Bill or in the proposed exceptions put out before Christmas. The Government should match this ambition and champion IP as much as possible. The IPO clearly needs to be more overtly a champion for IP. The United States has obviously benefited from having an IP tsar, otherwise known as the Intellectual Property Enforcement Coordinator, who is responsible for a national strategy and works directly to the White House. Creating a director-general of intellectual property rights to sit within the Intellectual Property Office and serve as a champion of IP rights within and across government would increase the influence of the IPO across government and also strengthen the hand of the Minister responsible for IPO, if I may say so to my noble friend.

My noble friend quoted the Alliance for Intellectual Property and I should like to take another quotation. It says:

“We believe such a post is needed to ensure that this success is properly recognised, celebrated and built upon to ensure its contribution to growth, employment, culture and society is properly maximised; for IP to be championed in a way it is in other nations”.

Statutory underpinning of the IPO will give British IP-based industries the confidence that they need both at home and abroad.

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Turning to Amendment 28D, as I mentioned, one of the most significant developments—in my view, far more significant than changes to copyright law—is the work following from Richard Hooper’s feasibility studies into a digital copyright exchange, otherwise known as the digital hub. Now the work following that feasibility study has been entrusted to a broadly representative voluntary group, the Copyright Licensing Steering Group. That has proved to get buy-in right across the creative sector. It is important to have an annual report on the follow-up to Professor Hooper’s recommendations and the progress made by the group in streamlining copyright licensing. He refers to that in paragraph 167 of his final report. We need to keep momentum going: how? He sets out several possibilities, but the one that I am attracted by is his fourth recommendation:

“Industry and the Government could also look at whether there is any productive and cost-effective overlap between reporting on and monitoring all the work described in this final report and Ofcom’s reporting requirements under the Digital Economy Act. This approach has the advantage of an independent voice but the disadvantage of perhaps moving away from the industry-led and industry-funded philosophy underpinning all this work. Given Ofcom’s new role in relation to copyright enforcement this may be an important idea for industry to consider given their concerns about copyright enforcement not being forceful enough”.

That is one suggestion; there are others; but they all surround the need to keep the momentum going and have a proper report to Parliament about progress on licensing. There is support for that approach from the Government’s paper on the role of the IPO that I mentioned previously. It states:

“The Government therefore considers that the most effective way of strengthening the IPO’s focus on innovation and growth would be to require it to report annually on the extent to which its activities had promoted those two ends. This increased transparency would act as a powerful incentive to develop policy based on the best available evidence, and to be clear about the respective weightings given to economic and social impacts on individual policy issues. Where the data are not as robust as we might like, a requirement to report will act as a spur to improve the quality of evidence”.

Surely, what is sauce for the goose is sauce for the gander in that respect.

I close by citing some very wise words from the closing paragraphs of the second Hooper feasibility study. I think that they apply across the board to both amendments.

“In conclusion, the political dimension of our work, introduced in our first report, remains constant: if the creative industries ensure that they have done all they can to make licensing and copyright work easier for rights users and therefore consumers, then the ball is firmly at the feet of politicians to ensure appropriate measures are in place to reduce the incidence of copyright infringement on the web … There must be a sensible balance between the rights and requirements of licensors and of licensees, of producers and of consumers, a balance that is beneficial to both parties leading to further and sustained growth and innovation in the UK creative and internet industries … But intellectual property across copyright, trademarks, design rights and patents is at the heart of the success of a modern knowledge-based economy it must be sensibly protected against theft and improper use”.

Amen to that.

Baroness Buscombe: My Lords, I have added my name to Amendment 28C, following my noble friends Lord Jenkin of Roding and Lord Clement-Jones. It was

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interesting to hear from my noble friend Lord Jenkin about his genes. It made me think about my genes, and my grandfather, who invested a great deal of time, energy, love and passion in developing motor racing cars back in the 1950s and 1960s. I remember as a young child the privilege of being able to stand within what we called the works to watch those incredible machines being built. That was wonderful. The specifications used to build those machines, and their protection, were paramount to their success as flagship examples of British industry, for jobs, investment and advancement of technology within the motor industry and the motor racing industry. Of course, the principles that were clear then, in the 1950s and 1960s, are no different today. The protection of copyright is crucial for certainty. Everybody involved in the creative industries needs certainty. Often, as we know, people in the creative industries are taking enormous risks—very often on their own—whether they are a lone photographer or a filmmaker or a record company representing multiple interests.

4 pm

I do not want to spend long on my feet this afternoon because noble friends who preceded me have made the case loud and clear for a director-general for intellectual property. However, let me use one example of the mass lobbying that we have all had over recent months—I think absolutely understandably. People care passionately about what they create and about how their ability may be at risk to continue to do their jobs and create some of the brilliant successes within our economy.

I want to quote Martin Mills, the co-founder and chairman of Beggars Group, the UK record label for the artist Adele who has been the biggest selling artist in the world for the past two years. Martin Mills won the American Billboard magazine icon award at the MIDEM conference in Cannes yesterday. In accepting the award, Martin made a stinging attack on the Government and their attitude towards copyright.

“Creative industries are built upon strong and defendable intellectual property rights, and without that they will inevitably wither and fail. It is impossible to make the investments to produce new creative goods without the security that ownership of them is protected.

Yet governments are seduced daily by elements of the new technology industry into diluting and compromising that security. Often in the name of the importance of those industries to today’s economies, often in the name of open Internet philosophy. But all of these arguments are aimed self-interestedly at compromising the value and the integrity of creative goods. These creative works are a priceless national cultural and economic asset, which should be treasured, not dumped”.

These rather fierce words were heard yesterday in Cannes—incredibly unfortunate but opportune. The Government have an opportunity to listen to those who argue, and the number is growing in support of my noble friend’s amendment, for a director-general who can focus entirely on a critical component of the British economy. Here is an opportunity. It should not be missed.

Lord Smith of Finsbury: My Lords, I support very strongly both the new clauses in front of us, but especially that proposed in Amendment 28C. I declare an interest as a non-executive board member of PPL,

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the collecting society for broadcast music rights, and also a rather minor member of the Authors’ Licensing and Collecting Society. I have one even more important interest and that is as a passionate believer in the importance, economic value and the future of the creative industries in this country. Intellectual property and the copyright that protects the value of that intellectual property are at the very core of the economic importance of those creative industries.

The creative industries represent something like 7% or 8% of our GDP these days. Even at a time of recession they remain strong and, in many respects, growing. They are incredibly important for us as an advanced industrial country because they are where much of our wealth creation is going to come from over the years and decades ahead.

For the creative economic sector, intellectual property is where that wealth resides. We have to make sure that we protect and nurture that intellectual property securely. That is why having a champion for the value of intellectual property such as is proposed in the amendment would be transformative in ensuring that our Government, Parliament and the world in general take intellectual property more seriously than they sometimes do at the moment.

Sadly, the report from Professor Ian Hargreaves was deeply disappointing in this respect. It contained a number of serious flaws and was based on flimsy evidence. The report from Richard Hooper was considerably better. I hope that the Government will take forward many of the proposals from Richard Hooper's report rather than placing too much reliance on the Hargreaves report.

Having a champion for intellectual property rights would be of great importance and great value. I do not think that the IPO could do it. The IPO is part regulator and part registrar. Its job has not until now been seen as being a promoter of the value of intellectual property. If the Government said, “We do not need a separate director-general: we will give this duty to the IPO”, I confess that I would be deeply worried. The work of the IPO has fallen down in much of its analysis and work recently. We have only to look at the glaring errors, for example, in its recent Collecting Societies Codes of Conductdocument to see that it would not necessarily be the right place to put this responsibility.

Having a director-general with this very specific task, with a direct line through to Ministers, would be a far better solution for this vital section of the UK economy. We need the advocacy—the championing—that can come from such a role.

Lord Howarth of Newport: My Lords, I enter a note of caution. I feel as strongly as everyone else about the importance of intellectual property—that we should generate and protect it. That is a key dynamic of our economy and our creative economy in particular. However, I have some reservations about the proposition, as framed by the Alliance for Intellectual Property and as developed and powerfully articulated by the noble Lords, Lord Jenkin and Lord Clement-Jones, and the noble Baroness, Lady Buscombe. It seems to me that the specific remit of the proposed director-general of intellectual property rights as set forth in the amendment

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is insufficient and unbalanced. I am not opposed to anything contained within the proposed new clause, but if the Government are to create a functionary whose job it is to promote rights, it is important that the remit of that person and office should be balanced.

Everything that is proposed in the amendment for the director-general to do is directed towards advancing the interests of the creators and owners of intellectual property rights. That is fine in itself but there are also, very importantly, the interests of consumers and users. Ultimately, all of us believe that there is not a reason. If we have an appropriate regime for the promotion and protection of intellectual property rights, the whole of society will benefit, and I do not dissent from that. But in the near term or even the medium term, there are, as we know, tensions.

In the debate that the noble Lord, Lord Lucas, introduced for us as we reached Part 6 of the Bill he rightly stressed the responsibility that we all have as legislators to ensure that the new legislative regime is balanced and that the legitimate interests of all concerned are recognised. If we were to have a director-general of intellectual property, it should also be part of his duty to promote the broader public interest—something that we shall return to repeatedly in our debates on aspects of the clauses in Part 6 of the Bill.

On the other hand, if the remit of this office is as so far proposed by noble Lords, I do not see why the creators and owners of intellectual property should not themselves establish, fund and provide other support for their own champion. That would be entirely appropriate. But the role of government is all the time to seek to balance legitimate interests when they are in any degree of competition or tension. I am not against having a director-general, but further thought is needed. Perhaps a more generous and inclusive definition of the responsibilities of the director-general would be more appropriate.

The other new clause, proposed in Amendment 28D tabled by the noble Lord, Lord Clement-Jones, suggests that there should be an annual report on copyright licensing. That is an entirely good idea and I am happy to support it.

Lord Lucas: My Lords, I join the noble Lord, Lord Howarth, in everything that he said. It is important that the Government hold the ring on this. I take my views on copyright from Macaulay—it is a bargain between the producer and consumer. It is a bargain that needs to be kept balanced. A lot of good will flow from that balance. I would not have a director-general of copyright who looked after only the producers any more than I would have bank regulation that favoured only the banks. It is a matter of balance.

If we want to look at what goes wrong when the producers are in charge, we can look back at the history of the music industry and the way that it reacted to Napster. It made a mess of that. Rather than seizing on a new opportunity, it wanted to entrench its rights against the consumer. The industry was rolled over and a jolly good thing too.

Martin Mills is a hero of mine and I am delighted that he is defending copyright so strongly. I am sure that he is right in what he said, but it does not come

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down to a case of a lack of balance. We as a Government should feel able to enforce copyright strongly because the copyright owners are giving our people what they want—not trying to withhold stuff from them, fail to give them what they want or hold them to ransom, as was the case in that phase of the music industry.

I am entirely in favour of the amendment of the noble Lord, Lord Clement-Jones. What is being done on the copyright hub is of immense importance. I am a copyright producer and user. In both aspects I would be a keen user of the hub. It is a great chance for Britain to be at the start of this and to put ourselves at the centre. If there is anything that we as legislators can do on this to keep the Government’s foot on the gas pedal and pressed firmly pressed to the floor, we should take that opportunity.

Baroness Morris of Yardley: I support Amendments 28C and 28D, and draw the Committee's attention to my entry in the Register of Lords’ Interests as a director of the Performing Rights Society.

I listened carefully to the two preceding speakers. It is difficult to argue against a balance. Who would be against a balance in favour of a bias? But to some extent the amendments that have been presented seek to correct an imbalance that already exists. That is the problem. We are not starting from a level playing field and building in an imbalance: there is a feeling that intellectual property is not protected. The amendments seek to correct an imbalance that the two previous speakers mentioned.

A lot has been said about the importance of this industry and I shall not go over that again, but I have two points. This is probably a pivotal time in that this industry is growing, it is new and it is fast moving. We saw what happened when the sector itself failed to respond to new technology in the appropriate way 10, 15 or 20 years ago, and I think that we have been picking up the pieces ever since. However, things have moved on since then. It is right that, as a society, the Government and the industry now look at what is happening and ask, “What do we need to do to make sure that we can guarantee the future of this industry, giving people new ways of accessing music design and all those things, but protect the copyright holders as well”. Getting that right is what this legislation is about. Given how fast things are moving, if we get it wrong now, we will find it very difficult to go back and get it right again in the future. This is a really important point. In relation to this amendment, perhaps I may say to the Minister that I do not think we can see how it goes and come back in 12 or 18 months’ time to reflect and then take things forward. Now is the time to act.

4.15 pm

The second point that I want to make in terms of background is that we talk about people accessing the intellectual property that exists at the moment. That is part of the structure that we are building, but in some ways it is about ensuring a continuing flow of intellectual property for the industry in the future. Those producing intellectual property are businesses and they, just as

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much as anybody else, need a guarantee of a return on their investment. We now have a wonderful system whereby people can access existing intellectual property but, if we do not act for the future, we will have done nothing at all to make sure that we have a continuing flow of intellectual property to make this industry stronger and more robust.

My thoughts on this come from two sources. One is a junior Minister in the Department for Culture, Media and Sport, and I notice that there is a glut of former DCMS Ministers with me on the Back Bench at the moment. Secondly, the noble Lord, Lord Clement-Jones, referred to the All-Party Parliamentary Intellectual Property Group, on which I also sat, although I was not able to attend all the sessions. The Minister may tell me that things are very different now but, quite honestly, going back to my days in the DCMS, I was horrified at the lack of co-ordination of intellectual property across government. I spent seven years or more in government and I never felt as much animosity about copyright as there was between the DCMS and the DTI, as it was in those days. The two departments were on different sides. There was no coming together in the national interest, and the IPO—I choose my words carefully; I do not want to overstate it—was not seen as a friend of the DCMS. The DCMS saw itself as promoting the creative industries.

That is what is wrong. There is no co-ordination across government departments to act in the interests of the future of this industry and the future growth of intellectual property. Of course, the Minister may tell me that it is all now sweetness and light and that there is a wonderful relationship between the two departments. However, if you put that together with the evidence that we took on the All-Party Parliamentary Intellectual Property Group, I fear that that is not the case. The sector that produces and those who represent the producers are still not convinced that there are people across government who understand them. It is not so much a case of acting in their interests but of making sure that they give what they should be giving this joint enterprise of becoming a society that makes the best use of IP. To have the IPO as the body to which the creative industries can turn being almost despised —I do not think that that is overstating it—cannot be right.

My starting point is that all is not right and all is not well so far as concerns protecting intellectual property and making sure that its niche in the wider area of promoting the creative industries is looked after in the way that it should be. Both the amendments put by the noble Lords, Lord Jenkin and Lord Clement-Jones, and the noble Baroness, Lady Buscombe, would do the trick. Perhaps before Report there needs to be some reflection on this matter, and we can always do that. That would be a good thing and I would very much support it.

Perhaps I may end as the noble Lord, Lord Jenkin, did, by talking about the importance of education. It is good to see that this would become a responsibility of the new post. I am not sure whose responsibility it is at the moment. The sector itself, as it should—it is its responsibility—has invested in and launched a number of initiatives over recent years, running education

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programmes in schools and other education institutions and in wider society. This is important, and the Government have a role here as partners in education and copyright—not taking it over and doing it instead of the sector but being partners.

The Government under either party have not done that so far. It was drawn to my attention that the IPO has said that it would launch an educational initiative; I understand that it was announced in December. The Minister may want to say what has happened to that, but whatever he says I think that I will not be convinced. We are talking about changing entrenched public behaviour and perceptions. If you look at what has had to be done to change areas such as smoking, drinking, alcohol and drugs, you can see that it is a massive thing. I do not have confidence that the IPO can be the lead for the Government in educating on the proper safeguarding of intellectual property. So I very much welcome the amendment, which was put forward with great force and skill, and hope that it finds favour with the Minister and the Government.

Lord Stevenson of Balmacara: My Lords, it has been a very good debate, and it has got us off to a very good start this afternoon in our task to whip through the various clauses on copyright. I start where my noble friend Lady Morris ended. We have to be clear that in addressing these clauses we adjust for the realities of the digital world in a way that makes sense to consumers. We have to start with where people are at present, not where we would like them to be. The points about education are really important here.

We are playing a big price for the lack of reform in recent years from schools unable to make use to libraries unable to make preservation copies of films and television programmes that they hold in the national interest. Copyright raises issues of reasonable social and cultural freedom as well as one very key issue with economic ramifications. The presence of the internet allows all sorts of new forms of creativity, so we need a copyright set-up that encourages one-click licensing for a long tail of material that is out there and which could bring economic and cultural growth. But without a well balanced and modernised framework, we will put ourselves at a big disadvantage over some other countries, most obviously the US but also other emerging players. Countries such as Singapore and Iceland are seeking roles as leading edge players in creative product licensing.

Technological change will mean that we in the UK need to keep on adapting our rules, because our fair dealing regime is part of a European system that requires us to exploit fair dealing exceptions, rather than the US fair use system that enables the regime to flex in response to changing attitudes, behaviours and court decisions. I wonder whether the time has not come to think hard about why we differ from the US on this key point.

As we have heard, the argument for the post of director-general of IP is that such a post is needed to ensure that the successful record of IP generation in the UK is properly recognised, celebrated and built on to ensure its contribution to growth, employment, culture and society. As the noble Lord, Lord Jenkin, said, the key to that is definitely education.

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The noble Viscount, Lord Younger, is the newest IP Minister, and I note that he is the sixth person to hold this position since it was created about six years ago. This will undoubtedly lead to a lack of continuity and policy uncertainty for businesses. It is not an exact parallel, but before the creation of the Department for National Heritage, which is now DCMS, there was a period when there were 18 different Ministers with responsibility for films in the then sponsoring department, the DTI, over a period of 17 years. As I was working at the BFI in part of that period, I know what that does to industry. I shall leave it to the Minister, who is barely 18 days into his post, let alone 18 years, to assess whether his location in BIS makes cross-government co-ordination more difficult and sporadic, as has been rather persuasively argued.

One problem for those working on this section of the Bill is that the creative industries do not generally feel that they are being looked after properly. Indeed, there is a wide sense of unease, as the noble Lord, Lord Jenkin, called it, and of imbalance, as my noble friends Lady Morris, Lord Smith and Lord Howarth also mentioned. This is in part because of the rather unfortunate split in responsibilities between BIS and DCMS, which can sometimes—or, indeed, all the time—appear to pull in different directions. My noble friend Lady Morris put it well; she spoke from experience, and I think that she spoke the truth. IP is not well served by the current system. But it is also because there have been no real opportunities to debate in this House and the other place some of the issues in the foreground of this sector’s thinking at a time of great change in every aspect of its businesses. The occasional SI does not compensate for this—something that we will return to in other debates. That is why, to me, the idea of an annual report and a subsequent debate in Parliament seems such a good idea, which I am happy to support.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie): My Lords, first, as a Scot, I recognise with a little pride the Scottish historical links with intellectual property which have been highlighted today.

Amendment 28C would create a new statutory role of “Director General of Intellectual Property Rights”, with a duty to promote intellectual property rights. As Minister for Intellectual Property, I have a role to champion the IP system as a whole—a point to which I shall revert later. This system recognises the different interests of rights holders, consumers and other users—an important point raised by the noble Lord, Lord Howarth of Newport, and supported by my noble friend Lord Lucas.

A balanced intellectual property system promotes strong and competitive markets; encourages innovation and creativity; and is a foundation of the knowledge-based economy. I ask noble Lords how the proposed director-general would fit into that system. The frameworks for patents, copyright, trademarks and designs serve sets of different needs, and function in different ways. It is not clear how introducing a new duty, cutting through those distinct, complex and largely effective systems, would affect their operation.

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We recognise the importance of promoting and educating about intellectual property. As my noble friend Lord Jenkin highlighted with some impressive statistics, and was highlighted by the noble Lord, Lord Smith, intellectual property is an important agenda for businesses and consumers alike, but although the Government understand the intention behind Amendment 28C, there is a need to deliver a balanced approach.

Amendment 28D would create a new obligation on the Government to report annually on the state of copyright licensing in the UK, and between the UK and our trading partners. The Government are keen to ensure that the intellectual property system as a whole works well. We have ourselves proposed that the Secretary of State will present an annual report to Parliament setting out his view on how the activities of the Intellectual Property Office are facilitating innovation and growth.

The Government agree with Professor Hargreaves that intellectual property policy should be based on reliable evidence. However, the reporting obligation created by this new clause would not be a proportionate tool to do that. Moreover, copyright licences are private agreements, and the Government do not intervene or monitor individual transactions unless circumstances are exceptional.

Collating large amounts of commercially sensitive data could also cause concern within the markets, and could have an impact on the competitiveness of UK interests. Headline figures showing the health of the creative industries are already available. It is not clear that the proposed report would add value to that existing data.

The UK’s creative industries are among the most influential and successful in the world. Our creativity is, quite rightly, highly marketable, award-winning and sought after, and creative industries contributed 2.9% of UK gross value added in 2009.

At this point, I should like to address some points raised by my noble friend Lord Jenkin and the noble Lord, Lord Smith, concerning the value of the IPO. The Government recognise the value of the creative industries, and it is worth emphasising some progress. The Government have done a lot for UK creators and are doing more. We have supported term extension for music performers; introduced charging of charities for music use; are pressing ahead with the antipiracy measures of the Digital Economy Act; and rejected the notion of introducing US-style fair use in the UK.

The Government are also supporting the creative industries abroad through our growing IP attaché network. Those attachés provide practical support to UK businesses, build relations with intellectual property agencies in host countries and improve UK influence overseas. The UK has attachés in south-east Asia, China, India and Brazil. The changes proposed in the Bill will bring the copyright framework up to date and reduce administrative burdens on both creators and users of content. My noble friend Lord Jenkin also questioned the direction and strategy of the IPO, supported by my noble friend Lord Clement-Jones, who questioned whether the IPO is indeed a champion of IP.

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4.30 pm

It is worth pointing out that on 17 December 2012, the Business Secretary, Vince Cable, set out his vision for developing the UK’s intellectual property landscape to encourage growth and a renewed programme of action for the IPO. The plans involve a step change in the way the IPO delivers services and include launching a super fast patent processing service to deliver patents in just 90 days and a faster trade marks examination service which will deliver a full examination report in five days instead of 10. There is a campaign to educate smaller businesses on getting the best value from their creativity, and innovation and action to help consumers and young people understand the importance of respecting IP and the harm that counterfeiting or illegal downloading can do. The Intellectual Property Office is working with key partners such as the City of London Police to tackle IP crime such as counterfeiting and online piracy.

My noble friend Lord Clement-Jones raised the impact assessments for copyright provisions in the Bill. The Government’s copyright exception proposals are accompanied by impact assessments which show that changes could contribute more than £500 million to the UK economy over 10 years on a conservative view, with likely additional benefits of around £290 million each year. The Government’s copyright proposals are accompanied by impact assessments that have been scrutinised by the independent regulatory policy committee. The Government have also consulted extensively on these proposals through the Hargreaves review, a formal consultation and numerous discussions with stakeholders and industry representatives. We have considered all responses very carefully. The Government will bring forward secondary legislation to introduce these changes in 2013. Prior to this we will publish the draft regulations for technical review. The Government will make every effort to ensure that all interested parties have the opportunity to comment on the draft legislation before it is laid.

On Amendment 28C, my noble friend Lord Clement-Jones referred to a proposal for a tsar to enforce intellectual property, much as there is in the USA. I reconfirm that I am the Minister for Intellectual Property. I believe that no other country has such a post. This Government have carried out a range of activity to support the enforcement of IP. The UK’s legal system convicts pirates and counterfeiters: 80% of criminal cases under IP legislation in 2009 led to a guilty verdict. In 2009, the UK convicted nearly eight times as many copyright offenders as in 2002. The assets seized from IP criminals amounted to £21 million in 2010-11, which was more than twice the previous year’s figure. Figures vary from year to year but there has been an increasing trend in the value of assets recovered since 2004-05. Therefore, the IPO has made a substantial investment in creating an IP crime intelligence capability. The IPO also provides direct support for enforcement activities through its intelligence hub. The hub holds in excess of 50,000 reports and this year alone has processed some 3,000 data searches against the database for the enforcement community.

The noble Lord, Lord Smith, mentioned the Hooper report recommendations. I am pleased that he supports the report. Hargreaves recommended that the copyright

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hub be set up. As Hooper found, it is now for the industry to work together to set this up. The Government will, of course, help where appropriate.

In conclusion, I assure noble Lords that the Government understand the importance of the UK creative industries and of promoting a balanced intellectual property system, which, indeed, my noble friend Lord Jenkin has acknowledged. The Government have considered these issues carefully. On the basis of what I have said, I ask the noble Lord to withdraw the amendment.

Lord Clement-Jones: I will respond briefly and leave my noble friend Lord Jenkin to respond to the main amendment. I welcome the fact that the Minister has come out of his corner punching. He has certainly set out the term extension, the charging charities, the anti-piracy measures, the statement by my noble friend Vince Cable about super fast patent procedures, trade mark services and so on. He has also given us a mini update on the copyright hub, which is what I asked for all along on an annual basis. I am not at all convinced by the plea that there will be lots of commercially sensitive data that would have to be included in any report on the copyright hub. I ask my noble friend whether the report on innovation and growth that the IPO is going to be tasked to deliver on an annual basis could include licensing. I believe that licensing is the way forward to innovation and growth for the content and creative industries. It is extremely important, rather than copyright exceptions. There is no reason why it should not be included in the IPO’s report and maybe that is a way of coming to a beneficial conclusion on this.

Lord Jenkin of Roding: My Lords, contrary to the figures in front of us on the chart, we have actually spent over an hour on the first amendment. I do not, therefore, want to take more time. I thank all those who have taken part in the debate. I think it justified what I said at the beginning about the level of support there is for, if not this particular amendment then the recognition that “all is not well”—to quote the noble Baroness, Lady Morris. All is not well in the field of copyright. I leave the Minister with this thought. The Government have got to do a great deal more if they are going to regain the confidence of copyright owners. I heard what he said and I shall study it carefully. However, there is no question about it, those of us who have been exposed over recent months to the considerable expressions of dismay and, indeed, fear for the future on the behalf of IP owners are left in doubt at all that, as the noble Baroness said, all is not well.

The argument of the noble Lord, Lord Howarth, for seeking balance, is probably what the IPO claims that it would be doing. The fact of the matter is that it has lost the confidence of all those who are concerned as the owners of IP. Something has to be done in order to get the improvement in the whole copyright structure that is widely sought. It may well be that the director-general proposal will need to be looked at again in the light of what has been said in the debate about it. One point I would make is that the all-party group recommended that it come under the Secretary of

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State for DCMS whereas the IPO comes under BIS. The amendment says “Secretary of State” and that covers all of them, so the amendment does not distinguish.

I agree with what has been said. There is a lack of co-ordination across Whitehall—a lack of the same kind of recognition of the importance of IP lying at the heart of our economy, and it will increasingly lie at the heart of our economy as it becomes even more based on intellectual property and less on manual labour. We have got to look at this very carefully. Parliament has an opportunity to express its views. I have no doubt at all that we shall want to return to the matter at Report. I give notice to my noble friend that I expect that is what we will do, but we will study what he has said very carefully. In the mean time, I beg leave to withdraw the amendment.

Viscount Younger of Leckie: Before my noble friend sits down, I hope that it is in order briefly to answer my noble friend Lord Clement-Jones and to confirm that we can include the detail on licensing within the IPO report in future.

Amendment 28C withdrawn.

Amendment 28D not moved.

Amendment 28DZA

Moved by Lord Stevenson of Balmacara

28DZA: Before Clause 65, insert the following new Clause—

“Metadata

(1) The Copyright, Designs and Patents Act 1988 is amended as follows.

(2) In Part VII (miscellaneous and general), after section 296ZG insert—

“296ZH Effect of electronic rights management information when material gathered by an automated process

(1) This section applies where electronic rights management information is associated with a copy of a copyright work, or appears in connection with the communication to the public of a copyright work, and a person (A) in the course of a business (including without limitation in pursuance of educational, cultural or any other non profit objectives) makes a copy of or performs any other restricted act in relation to that work by an automated process.

(2) If the conditions in subsection (3) are satisfied, A is deemed to have notice of the contents of that electronic rights management information (“the information”) for all purposes relating to his further use of, or access to, the copyright work.

(3) Those conditions are that—

(a) it is reasonably practicable for A to instruct the equipment or software which conducts the automated process to recognise, read and interpret the information;

(b) the meaning of the information may be ascertained from published standards which A knows about or ought to know about;

(c) the meaning of the information is sufficiently clear that it is reasonably practicable to instruct A’s equipment or software to comply with any restrictions contained in the information regarding the further use of, or access to, the copyright work.

(4) Where, apart from this section, A would be regarded in law as having notice of any of the information, nothing in this section prevents A from having such notice.

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(5) Subsections (1) to (4), and any other provisions of this Act as it has effect for the purposes of those subsections, apply, with any necessary adaptations, to rights in performances, publication right and database right.

(6) Section 296ZG(7) (definition of certain expressions) extends to this section.””

Lord Stevenson of Balmacara: My Lords, I shall speak also to Amendment 28DZD.

One of the difficulties about discussing the clauses on copyright in the Bill is that, although they are very important, they stand apart from important changes in copyright that the Government are making in parallel. I refer, of course, to the announcement on 20 December 2012, which prefigures the implementation of many of the recommendations of the recent Hargreaves review.

As many commentators have pointed out, making major changes to copyright has usually been done by primary legislation. The Copyright Act 1911 brought provisions on copyright into one Act for the first time; the Copyright Act 1956 covered the United Kingdom’s accession to the UCC; and the Copyright Designs and Patents Act 1988 is the current main legislative framework.

However, according to last month’s announcement, the Government will make changes by secondary legislation to private copying, education, quotation and news reporting, research and private study, access for people with disabilities, archiving and preservation, public administration, data analytics, and parody, caricature and pastiche. Many commentators feel that such a long list of copyright exceptions should be introduced by primary legislation; and I have some sympathy with that view.

When he comes to respond, I hope that the noble Viscount will explain in some detail the approach that the Government are taking. Pushing ahead with those measures in secondary legislation will, after all, not allow for the sort of debate and discussion that the torrent of representations that we are currently receiving would suggest is sensible.

The line being taken by the Government seems to be that, as they already have the power to make copyright exceptions under Section 2(2), they do not need primary legislation. With respect, I think that that misses the point. Those changes are important in themselves; they affect a major part of our economy; and they will interact with hundreds of thousands of people who work in those industries. If Parliament does not have a chance to debate those measures in detail, we are simply not doing our job.

I have tabled two amendments on the Hargreaves exceptions so that at least this issue can be raised. I shall make a couple of general points and then deal with the amendments, although not in any great detail. The first is that, in themselves, the new exceptions do a pretty good job of moving the situation forward from one where, over a period of decades, the focus of legislation with regard to copyright has been on either extension of duration or intensification of enforcement. On many of the copyright exceptions proposed, the Government have trodden a careful path between the contending views expressed in their consultation. Where an issue was uncontentious—such as copying for archive purposes—we have a clear and, to some people, radical

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change to the proposed position to allow unrestricted copying, which is a very welcome move indeed for countless museums, libraries and archives. Many of the specific proposals, however, seek to trade off contending points of view and interests, and are all the weaker for that.

If I were to take a view on which of the proposed copyright exceptions is likely to be viewed by the public as simply limp, I would say that the private copying exception, being confined to the individual rather than the immediate family, is the one that fails the basic test of realising where the consumer is on these issues. If my wife buys a CD, she cannot let me listen to it by copying it to my iPod. She can legally copy it to the music system of our car, but only if she owns the car and, by implication, the music system; it will not be legal if I am the registered owner. That will seem pretty daft to most people. There are of course arguments against a family private copying exception, not the least being able to define what is a family, but many will feel that an attempt should at least have been made.

Turning to my amendments, there are two issues. My concern about metadata is that although it is good that the Government are moving on it, the fact that they will be doing it through is secondary legislation means that, despite the consultation, the SI, which we hope to consider, will come through in the usual way in your Lordships’ House and will have to be approved through the affirmative procedure. That is in no sense a complete answer to the question. This is a controversial move, especially for publishers, many of whom have expressed considerable concern to both the Government and those of us involved in debating the Bill. Treating the proposal through the secondary route is not doing justice to the issue, to the community or to the wider public. A Grand Committee debate, where no amendments are permitted, is not a substitute for primary legislation. Perhaps the Minister can comment on that when he replies.

4.45 pm

My second amendment deals with parody. My point here is that what the Government are proposing is extremely cautious. Perhaps the key point is that the proposal is that parody will be permitted only when it is fair dealing. In other words, this will preclude copying an entire work, and therefore, as the Government helpfully point out, there is a readily accessible licensing procedure available to pay for use of the work. Which original author will be happy to license to somebody else who is going to parody the work in question? They would have to have a very broad-minded view of what was going on here.

The Government also intend to leave in place the original author’s “moral right” so that they,

“will be protected from damage to their reputation or image through the use of works for parody”.

On reading this, I sometimes think that the Government have not understood what “parody” actually means. This does not even accord with the statement that the Government agree with the BIS Select Committee that,

“genuine political and satirical comment should be protected”.

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The Minister nodded a bit at that point; at least I got something out of him.

The UK has a significant tradition in parody. It is also strong in pastiche and caricature. This includes literature, stage, film, fine art and music. Parody, pastiche, satire and homage have been an important vehicle for social and commercial innovation. These types of work are among the most commercially successful and well-known works in British history. Examples include T. S. Eliot’s The Waste Land, which recontextualises elements of various previous literary works, including Dante’s Inferno. Tom Stoppard borrowed liberally from Shakespeare characters and plots to create famous pastiches such as “Rosencrantz and Guildenstern Are Dead” and, with Marc Norman, the brilliant film “Shakespeare in Love”. He also used George Orwell’s 1984 and Federico Fellini’s “Eight and a Half” to create “Brazil”. Parodies frequently eclipse the work they are based on in popularity. For example, the BBC television sitcom “’Allo ’Allo!” is better known than the original BBC television drama, “Secret Army”, which it satirised.

EU law provides that member states are free to introduce an exception for parody, pastiche or caricature in national law, but the UK is one of the few industrial countries which does not provide for such an exception. Australia introduced a fair dealing provision for parody and satire in 2006. Belgium—believe it or not—Spain, Switzerland and France provide for a similar exception in their laws. Countries which, like the UK, do not provide for an exception in law have to rely on litigation.

I suppose we should be glad that the Government now reject the argument that relying on litigation provides sufficient legal certainty for parodists for the reality is that parodists and those who make their works available to the public face considerable risk of being sued for copyright infringement and hence having their works removed by internet hosts, and that is without considering the moral rights issue, particularly as UK courts have interpreted increasingly minute parts of a copyrighted work as constituting a “substantial part”, and that their use is therefore copyright infringement. This means that the Government cannot continue to defer the parody problem to the courts and the courts cannot be relied on for the continuous protection of a very important part of our culture.

My view is that there is a contradiction at the heart of the Government’s proposal—this is the reason for my amendment—that is the combination of moral right and fair dealing might easily mean that a wholly legitimate target of satire such as a politician or a celebrity would be able successfully to fight parody on copyright grounds in the courts. What a loss that would be. Can the Minister confirm that, for example, he is aware of the video done by soldiers and civilians in Afghanistan, “Gangnam Afghanistyle”? Or perhaps more topically, has he seen or even heard of the recent viral hit “Eton Style”, labelled on YouTube “Gangnam Style Parody”? A simple nod of the head would suffice. Even if he is discreet on this point, I am sure he would lament, as would many of us on this side, if such brilliant and incisive work was caught by this provision. I will send him the YouTube link if he would like to have a look at it.

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I do not think the approach being taken by the Government is what is wanted. That is why I feel that my amendment would be the appropriate way forward. Only an out and out exception of the type contained in our amendment will get us to the right place. This may be the only opportunity to request a major rethink on this issue, which is why I ask the Government to look again at this proposal. I beg to move.

Lord Clement-Jones: My Lords, I support Amendment 28DZA in the name of the noble Lord, Lord Stevenson. I agreed with much of his introduction, the broad sweep of which was impressive given the nature of these amendments. He commented that exceptions will be introduced by secondary legislation. I associate myself with those remarks. I do not believe that secondary legislation is the right way to introduce those exceptions. It should be done by primary legislation.

That said, it is worth unpacking the metadata amendment slightly because I think that exactly how the amendment would operate should be on the record. Section 296ZG of the 1988 Act, which was inserted in 2003, provides protection for electronic rights management information by giving a cause of action to rights owners when such information is removed or altered by a third party without authority, provided that the third party has the necessary mental element—that is, that it knowingly and without authority removes or alters electronic rights management information.

The amendment seeks to deal with the specific problem that arises when copies of works or other subject matter are gathered by an automated process. It has particular relevance to the actions of search engines and other operators who “spider” the world wide web. Because copies are gathered and often stored or processed by an automated process, no human mind will normally read rights management information which is associated with or embedded in the protected subject matter. The law is presently unclear about the circumstances in which the operator of the automated process will be deemed to have rights management information drawn to his attention. Therefore, the amendment seeks to provide certainty in this regard. It does not expand the scope of any rights belonging to the copyright holder or other right holder. A person gathering materials is free to disregard any restrictions which may be communicated by means of rights management information if, for example, the acts he is carrying out are protected by a fair dealing defence or for any other reason do not fall within the scope of the copyright or other right.

Subsection (1) makes it clear that the effects of the proposed new clause are restricted to persons who gather or access copyright or other protected materials in the course of a business. Therefore, the circumstances in which consumers might be affected by any restrictions in electronic rights management information are outside the scope of the proposed new clause and remain governed by the law at large.

As the Minister may know, the amendment is supported by a large number of members of the creative industries. There is a strong view that metadata is crucial for the future of copyright protection, that it is central towards an efficient, effective and robust licensing system, that it has part of the solution to

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diligent search for orphan rights and orphan works, and that it is also helpful in terms of pseudonymous works.

I end by quoting the noble Baroness, Lady Buscombe —I often trawl through the internet to find her best quotations. This one is particularly apt in this set of circumstances. It comes from a House of Lords debate in June 2005:

“For those who make photography their life’s work, protecting their copyright goes beyond the emotive; it is their livelihood. Without adequate protection the photographic image—tomorrow’s cultural heritage—and those who create it will cease to have true value, and without adequate protection a profession dies. Photographers are concerned that, in the digital age, information supplied with the digital image about copyright and the creator is stripped away, often automatically, so that in a matter of moments the world is awash with ‘orphan’ images”.—[Official Report, 22/6/05; col. 1690.]

That was in 2005. We have not done anything about that issue but the passage of this Bill provides a chance to do just that.

Lord Howarth of Newport: My Lords, my noble friend has done well to raise the question of metadata in his amendment. I think that we need to be extremely careful about how we legislate on this, whether in primary or secondary legislation. Until such time as the technical means to counter the well known abuses of the intellectual property for digital photography by stripping metadata have been found, we should certainly be cautious, to say the least, about how we proceed to license digitally photographed works on the basis that they are orphan works.

My noble friend Lord Stevenson has also done us a good turn in fixing our attention on the question of what should be legislated in primary legislation and what should be left to secondary legislation. Will the Minister in due course comment on some questions of practicality and principle in this regard?

In what I am going to say, I make absolutely no criticism of the Minister personally. He has only just become Minister for Intellectual Property. I wish him very well indeed in that responsibility, and I hope he stays there until May 2015, and no longer. I wish him well during his incumbency, and the continuity that he may enjoy will undoubtedly be valuable for all concerned. Would it not have been more satisfactory if, when we came to consider clauses in primary legislation seeking to update the law on copyright, we also had before us at least an advanced draft of the secondary legislation to which the primary legislation would give authority? It is very difficult for us to know how to amend primary clauses and what view to take, all in all, about the Government’s proposals in the Bill if we do not know what the secondary legislation might look like as it will flesh out the relatively simple legislative propositions in the Bill.

I remember when it became clear that Clause 43 of the Digital Economy Bill was not going to make it to the statute book because of the imminence of the general election in 2010. I pleaded with the department that as it continued to wrestle with these policy issues it should move towards exhibiting draft regulations at the same time as it exhibited draft primary legislation

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so that all this could be put out to consultation together once it had been considered with the expert groups, such as those that the Intellectual Property Office is meeting at present. That was three years ago, and it seems to me that the House, and Parliament as a whole, is entitled to expect that the Government had made better progress on preparing the primary and secondary legislation before they presented it to us.

I was the government Whip in the Commons on the Copyright, Designs and Patents Bill 25 years ago, and I think it is fair to say that that legislation was somewhat less bald, somewhat less framework, and attempted to contain a more substantial body of legislative provision. The spirit in which both Houses of Parliament worked on that legislation 25 years ago was entirely collegiate. There was no party politics in it at all. We were all simply seeking to work our way forwards to find an appropriate legislative solution. Our deliberations and conclusions were observed with very great interest in other countries. We can continue to legislate in that spirit, but it would have helped us if the Government had allowed us to know a little more about what the primary legislation would open the way to.

While I reject the suggestions that have been put to us in some of the otherwise very helpful briefings that we have received that Parliament virtually does not scrutinise secondary legislation, I think that the situation, at least in this House, is significantly better than that, and we ought to pay tribute to the committees of this House that examine the quality and appropriateness of secondary legislation. We all know that it cannot be amended, and a great fuss is made if a statutory instrument is rejected by the House, so although we are not quite presented with a fait accompli when we consider secondary legislation, it is not a particularly satisfactory manner of advancing the frontiers of legislation. Much more exposure in draft and much more consultation—I know we will have it in due course—would be preferable at this stage. The Minister has perhaps not had an opportunity to consider this question of process as yet, so I hope that, not today, but at some point, he will feel able to offer some comments on it.

5 pm

Viscount Bridgeman: My Lords, I declare an interest as a director of the Bridgeman Art Library, of which my wife is the founder and chairman. I shall speak to Amendment 28DZA in support of the noble Lord, Lord Stevenson, and my noble friend Lord Clement-Jones. The noble Lord, Lord Howarth, has reminded us of the history of the 1988 Copyright, Design and Patents Act. It goes a great deal of the way to protecting the rights of copyright owners, it removes the excuses for copyright material being lifted without a legal licence, it ensures that works created in future are not orphaned whereby, as your Lordships will be aware, work cannot licensed in the ordinary way because those who hold rights in it are untraceable, consumers get a genuine guarantee that the work is what it says it is and its creators take responsibility for it.

However there is one glaring loophole, which has been so ably addressed by my noble friend Lord Clement-Jones, in part opened up by fast-growing developments in digital practice. It is that at present users are currently

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able to shelter behind the fact that rights information, which forms part of what is loosely termed metadata, obtained and distributed by computer programs, as opposed to being obtained manually, escapes the protection afforded to creators by the 1988 Act. This amendment seeks to rectify an obvious anomaly in the existing legislation.

I would also like to draw the Minister’s attention to the fact that, should this amendment be accepted—and I am well aware that there is considerable debate about whether this will be in primary or secondary legislation—there will need to be a cross-over to those clauses relating to orphan works and extended collective licensing.

I would also like to mention that giving effect to this apparently simple intention in plain English at the same time as making it watertight in IT terms is no easy task, and the framers of this amendment are to be congratulated on doing their best. No doubt, if this amendment is accepted, as I hope it will be, the Bill team will be able to consolidate the wording.

Baroness Brinton: My Lords, with the permission of the Grand Committee, I shall speak sitting down.

I shall speak to both amendments. On Amendment 28DZA, will the Minister confirm that there is already protection under the law for the stripping of metadata knowingly and without authority? Other noble Lords have alluded to that. I understood that it gave us the protection that we were seeking rather than going down the route of this amendment. Any infringement is therefore already contrary to civil law. If there are concerns that that protection is not strong enough, especially in relation to computer and electronic equipment—for example, in cameras—it is not just about large internet companies stripping data. There is a real problem for photographers; I know that some of their data are stripped. I am looking at the noble Baroness, Lady Howe of Idlicote, when I say that we have worked with the ISPs in relation to child safety and pornography. Surely there is a more effective way of working in the internet age with organisations that, whether deliberately or not, might try to remove that data.

I understand that this amendment is trying to tackle the problem, but I am worried that it relies on individuals to instruct their electronic equipment. That might be fine in the case of a highly proficient technical photographer, but not necessarily fine for amateurs creating metadata, particularly on the internet, as well as for some professionals who do not understand the technology too well.

I worry that this amendment creates a further barrier to orphan works, which we will be discussing later. If this amendment is accepted, it will make it almost impossible to collect copyright licence fees for some orphan works because of the conditions it puts upon person A and person B.

I turn to Amendment 28DZD. It is a complete change in tone. I declare an interest as a former stage manager of Footlights. I worked alongside people such as Steve Punt and Hugh Dennis on their very first shows. I worry that paragraph (b), which states that copyright is not infringed if,

“it is accompanied by sufficient acknowledgement”,

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would provide a real problem to people working in our fast-moving light entertainment and comedy world. I can absolutely understand the parody of major works: I think of Benjamin Hoff’s The Tao of Pooh, which acknowledges, right at the start, where it is coming from.

But there has been a traditional and proud history in this country of parody and caricature, from “That Was the Week That Was” 60 years ago, moving right up to date with “The Now Show” on Radio 4. Steve Punt and Hugh Dennis did a wonderful sketch a fortnight ago on UKIP and the referendum on Europe using the theme of Gollum in the film of Lord of the Rings. I do not know whether noble Lords heard it, but the theme of the programme was “We wants referendumses”. It was very effective.

The problem is that proposed new subsection (3)(b) in Amendment 28DZA would mean that every sketch like that in a fast-moving half hour show would have to stop to acknowledge that it was taking both a piece from Peter Jackson's original film and the style of the actor. Therefore, frankly, it would be unworkable. I apologise, but I am afraid that the stage manager in me immediately thought, “Oh my goodness: this will kill comedy and light entertainment of the spontaneous type that this country excels in”.

The Earl of Erroll: My Lords, I not sure why these two amendments have been grouped together because they are completely different. However, I will deal with the first one on metadata. I do not know what it has to do with stripping metadata off whatever you might read on the internet. It is saying, as far as I can make out, that if you have an automated system that comes across some metadata, it should respond to that intelligently and either not breach copyright or know that you are permitted to use it. But it does nothing about controlling the metadata or stopping people from stripping it.

In as much as it is saying that you should look at the metadata and therefore respond to it intelligently, yes, that is a nice thought. However, I wonder whether many programmes would be able to do that. I can see that it is probably targeted more towards the search engines and various things like that. I can see some problems with this and think that it will have to go into regulation to work out how to handle it.

We also need to think about the world stage and what is being done in other countries, because a lot of these things that look for items on the internet are based abroad. We want something that is practically useful. We do not want to drive things out of the UK. I am not saying that we should breach copyright and I think that we should use metadata intelligently to try to achieve the aims that we want, but we must be careful how we do it.

I am also keen on the use of data mining for research purposes. For example, you can talk to Wellcome and such people. Huge benefits have come from looking at disparate research material. Very often, new discoveries come from matching things from completely different spheres. That is what we forget when we worry about the protection of copyright for the artist or creative

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person in that sphere. Actually, researchers have completely different needs. They will not usually go around ripping off other people's ideas.

One of the challenges with this whole area of copyright is that we are trying to treat everything as if it is the same. It is not. Very often, when we benefit one lot we will disadvantage another and we need to be careful not to do that. That slightly worries me.

Leaving that to one side, Amendment 28DZD has a good point behind it, which is that you must have an exception for parody. Leaving the courts to decide what is fair in parody and what is not is very dangerous. As we know, courts are extremely expensive. If you are a small creative group trying to create parody and a big boy comes along and tries to hit you over the head in the courts, you will have to back down. That is bullying. Unfortunately, I do not think that our laws on bullying prevent that. If they did, we might be able to do something about it.

We must be very careful saying that recourse to the courts is workable. Basically, unless you are very rich or very poor, you are outside the law. You are not protected by British law because it is too expensive. That is something I have become aware of in general. We cannot rely on it. I think it is very important, but I entirely agree with the noble Baroness, Lady Brinton. We cannot try to attribute every single little thing that one tries to parody. That would be absolutely ridiculous and unworkable. Without that bit about the attribution, the idea that we are trying to protect parody is extremely important. Therefore, I like this amendment; it just needs a bit of tidying up, I suspect.

Viscount Younger of Leckie:My Lords, Amendment 28DZA would introduce a provision into the Copyright, Designs and Patents Act 1988 that changes the legal status of rights management information attached to digital material. This would make internet service providers responsible for ensuring any rights management information contained in metadata is recognised and acted upon. I have sympathy with creators whose wishes about the use of their material, expressed through metadata, are not always complied with. There are already well-established methods to control automated use of material posted online—for example, the use of robots dot text files to prevent crawling of websites by search engines. I was grateful for the technical insight on this from the noble Earl, Lord Erroll, who I suspect knows a lot more about this than my good self.

Internet service providers are already responsible for removing infringing material when it is brought to their attention. This is in keeping with other areas of law, where we do not expect carriers of information to be held liable for the lawfulness of that information. The approach suggested in the amendment would require all aggregators, indexers and other automated hosts online to develop systems to read metadata and comply with any conditions. As noble Lords will understand, this would be no small task. It would also replicate the efforts of a number of industry-led initiatives in this area, which are making progress. These include the Automated Content Access Protocol project, and work by the industry-led digital copyright exchange to look at the related issue of automated metadata stripping.

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Government have considered the amendment carefully but do not consider that legislative change is the right step at this time. Moving on to Amendment 28DZD, noble Lords will be aware that the Government have announced their intention to bring forward legislation to introduce or update a number of copyright exceptions. A new exception to allow limited use of copyright works for parody, caricature or pastiche is part of that work. The amendment of the noble Lord, Lord Stevenson, is therefore going in the same direction as the Government’s policy. Rather than amend the Bill to achieve it, I suggest that it would be better to wait for the introduction of a parody exception, with the other proposed changes to copyright exceptions, in due course.

The Government have already committed to publish draft regulations later in the year, including provisions on this subject, for technical review by any interested parties. This will be an important opportunity to hear from experts, including in this House, to ensure that the regulations will have the desired effect. I would like to pick up on a point emphasised by the noble Lord, Lord Howarth, concerning secondary legislation. To clarify, we believe that exceptions to copyright that are explicitly permitted by the copyright directive may be introduced into UK law by means of Section 2.2 of the European Communities Act. The Hargreaves changes to copyright exceptions announced in December 2012 will be introduced by secondary legislation under the European Communities Act and not under the power in Clause 66 of the Bill. Our intention is to publish draft regulations for public comment in the spring. Government have considered the amendment carefully, but I hope that in light of the above, the noble Lord, Lord Stevenson, will feel able to withdraw this amendment.

Lord Stevenson of Balmacara: I thank all those who contributed to the debate. I am glad we got to the heart of it very quickly. I am particularly grateful to the noble Viscount, Lord Bridgeman, and the noble Earl, Lord Erroll, for their contributions of a technical nature. Who could fail to be persuaded by the noble Baroness, Lady Brinton, who lied when she said she was simply a stage manager? Clearly there was a touch of the real authorial actor there as well and I was grateful to her for her points. My failure here was clearly to have not done my research and realise that despite his youth and clear vibrancy in terms of matters cultural, the noble Viscount had not listened to his children and worked out where “Gangnam Style” was coming from. I perhaps should have taken a leaf out of the book of the noble Baroness, Lady Brinton, and actually done my bit of what it was that does it. It certainly would have amused the civil servants behind, but I think they were laughing already so it would have perhaps wasted my time.

On metadata, this was a probing amendment and was not meant to be one that would have solved the problem. I tabled the amendment because I think we are missing a key debate, and I am still not quite clear about when we are going to get that debate. The Minister said that legislative change in this area is not right, but he failed to explain why it is not right. Perhaps he will write to me and explain in a bit more detail. There is something here. It is clearly contentious,

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and we are not going to be able to discuss it very well in secondary legislation. I think we are missing an opportunity here.

On parody, we are still left with a problem that was not addressed in what the noble Viscount said. The legal problem with parodies is that,

“they need to be close enough to the original to be recognised by the audience as a parody in the first place, which means that they will almost inevitably infringe copyright”.

How do we get out of that? These words are quoted by the IPO. They are from somebody commenting on a case which sets the situation here quite well: “Newport State of Mind”.

We will not solve this today, and there is no point in continuing it. I shall withdraw the amendment, but when can we have these debates? I beg leave to withdraw the amendment.

Amendment 28DZA withdrawn.

5.15 pm

Amendment 28DZB

Moved by Lord Stevenson of Balmacara

28DZB: Before Clause 65, insert the following new Clause—

“Exploitation of two-dimensional images of articles embodying designs derived from artistic work

(1) The Copyright, Designs and Patents Act 1988 is amended as follows.

(2) In Chapter 3 of Part I (acts permitted in relation to copyright works), after section 51 insert—

“51A Exploitation of two-dimensional images of articles embodying designs derived from artistic work

(1) This section applies where a design has been made available to the public, in the United Kingdom or elsewhere.

(2) It is not an infringement of copyright in the design itself (if any), or any artistic work embodied or incorporated in it, to make, distribute, communicate to the public photographs, graphic or reprographic reproductions, films, or other two-dimensional images of articles embodying the design.

(3) The Secretary of State may by order make provision excluding from the operation of this section such articles of a primarily literary or artistic character as he thinks fit.

(4) An order shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) In this section—

(a) design has the meaning found in section 1(2) of the Registered Designs Act 1949;

(b) “making available” means making available to the public by publishing following registration or otherwise, or exhibiting, using in trade or otherwise disclosing.””

Lord Stevenson of Balmacara: I shall speak also to the other two amendments in the group which are in effect variations on a theme. Article 17 of the Designs Directive (98/71) and Article 96(2) of the EU Design Regulation (6/2002) leave to member states the freedom to regulate the extent of protection offered by copyright to designs. The amendments in this group seek to pre-empt what the Government intend to do in this complex area, which is to repeal Section 52 of the CDPA, by means of a general fair use provision and a narrower images exemption.

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Amendment 28DZB seeks to protect the interests of many of the third parties affected by the Government’s proposal: those who have created images of existing designed articles. This includes publishers who have included images of old designs in their works, museums, individuals using images of design on websites, educators wanting to use images in teaching, photographers, picture libraries and so on. Many of these people will have invested in the production of images and films of designed articles when it was lawful to do so. Their interests are not likely to be protected by a transitional rule allowing stocks to be sold off; every time the images are shown in public, or reproduced, there will be an infringement.

This images exemption seeks to protect these third parties by allowing the making and exploitation of two-dimensional images and films of designed articles which have been placed on the market. In fact, it goes a little further than protecting these third parties during a transitional period, as it will permit such images to be created and sold in the future. This is a narrow derogation from the serious expansion of rights of design proprietors by the repeal of Section 52 and, in my view, does not prejudice the normal exploitation or the legitimate interests of the copyright holder. I think there is a major issue here, and I hope very much that the Minister will have further thoughts on this issue as he listens to this debate.

Amendment 28DZC builds on the breadth offered by the directive and the regulation. As drafted, the provision seeks to minimise the uncertainty inherent in a fair-use defence, such as that available generally for copyright under US law, with its white list and black list of deemed fair and unfair uses, leaving other uses to be judged in the individual case by reference to relevant factors.

One goal of this amendment is to protect follow-on designers: those who incorporate parts of old designs but transform the totality. It is well known that designers build with and on the design ideas of their predecessors. I believe the extension of copyright term to life plus 70 will make this much more difficult because of the sheer length of the term and because copyright protection is stronger in many ways than design protection. In my view, this issue has not been given sufficient weight, as we need to give careful consideration to the needs of future generations of designers.

Under existing design law, copying a part of an old design and incorporating it in a new, transformed design would not infringe any of the 25-year registered design rights unless the overall design produces on the informed user the same overall impression. However the copyright test is different. Copyright prohibits reproduction of any part of a protected work. One of the proposed white list of fair uses ensures that no use of a copyright-protected design infringes unless it would produce the same impression on an informed user. In short, it harmonises the copyright test with the EU design test.

Another goal is to protect educators, publishers, film-makers and website operators who use images of designed articles in their teaching, in their books, in their films and on their websites. These uses would be white listed as automatically fair. The black list deems

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unfair any use of a design in making an article which does not credit the original designer. It may be fair to start making old designs which are no longer being marketed—for example, fabric or wallpaper designs—particularly where the designer or design owner cannot be found. This clause indicates that it would not be fair to do so without indicating the origin of the original design.

However, the debate on this issue revolves primarily on whether the Government are right to delete Section 52 of the Copyright, Design and Patents Act 1988, whether by so doing and ending the current regime of registered designs they have fully considered all the issues which flow from that decision, and the implications that arise for products which are or are about to be out of rights protection under the present registered design period of 25 years, which will in future be in copyright for a period of 70 years after the death of the designer.

There is, of course, a very good case to be made for letting industrial designers have the same protection for their efforts as is available to composers, writers and the like, but I think there are some real questions about this issue, which might suggest to the Government that a pause for reflection before implementing this major change might be sensible.

One practical effect of this repeal will be to make replica versions of classic designs, such as Jacobsen’s egg chair, unaffordable to many consumers. Additionally, the creative freedom of future designers will be constrained because of the need to avoid breaching the copyrights of older predecessors, which cuts across the very essence of much industrial design.

Why was this proposal not preceded by a full consultation with stakeholders? Why has the impact assessment that has been published in fact got very little detail about the impact? Moreover, the assessment seems to have failed to acknowledge the impact on anyone other than designers, those who make and sell replica designs, consumers and the Government themselves. Would the Minister not agree that this initiative has not been handled properly?

The Minister may well argue that the Government had no option but to legislate. If that is the case, can he confirm that the Government are rushing to legislate on the basis of one recent European case, Flos SpA v Semeraro Casa e Famiglia SpA, which has been reported recently? The case concerned the design of the famous Arco lamp, consisting of a long, curved, metal arm supported by a marble block and finishing with a silver globe-shaped lampshade. I should declare an interest since I have one of the original design, fully paid for, at home. The design was created in 1962 by the Italians Achille and Pier Castiglioni, and any industrial design protection the design had once possessed has lapsed. Flos nevertheless claimed copyright in the lamp and that it had been infringed when Semeraro imported its Fluica lamp into Italy from China.

I am no lawyer, but I think we need to be sure that the UK response to Flos is appropriate and proportionate. The Government have decided on the basis of this single and recent case that we should abandon the whole of our registered design margin of appreciation. Surely the better approach would be to try to maintain

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Section 52, as that was explicitly agreed between the UK Government and the Commission during the process of adoption of the design directive. For the avoidance of doubt, as I have already said, there clearly is a good case for giving industrial designers the same copyright protection as applies to other creative industries, but the fact is that we currently have a different regime, and harmonisation of design and copyright should not be an end in itself or be driven by one isolated case.

The impact assessment is far from complete, but it admits that the reform of Section 52 will harm consumer welfare as classic designs—those that are more than 25 years old—will be re-monopolised. Replicas, currently available at some 15% to 20% of the price of the original, will no longer be available. No opportunity has been taken for consumers to be consulted. Moreover, there are those who argue that the impact assessment significantly underestimates the other costs that will arise, particularly because of its focus on furniture and three-dimensional design.

The Government believe that the change would encourage innovation and investment in design, but this is supported by the flimsiest of arguments in the impact assessment and no new evidence is offered to explain why the balance of interests between designer and owner, competitors and consumers, should be drawn differently today than in 1988 or indeed in 1994-95 when the Government successfully negotiated to retain Section 52 of the CDPA.

I am also concerned—and here I echo the comments made recently by my noble friend Lord Howarth—that as yet we have no idea what the traditional arrangements will be when Section 52 is repealed. Will it be on existing stocks and on articles which are out of copyright and which will now gain further periods of protection? Surely we need to see the draft proposals in this area as soon as possible and certainly before Report.

In conclusion, I should like to return to the question of the impact that this change will have on firms whose registered designs have come out of protection but which may now regain copyright protection to the detriment of consumers but to the benefit of rights holders.

I mentioned the egg chair, but it has been suggested to me that another area which will be affected is wallpaper. Wallpaper is within the current scope of Section 52 and is not in the exclusion for matters of a “primarily literary and artistic character”, so the change may well benefit companies in this field. The Minister will be aware of the firm Osborne and Little, which is primarily a wallpaper maker, founded in 1968. As I understand it, designs that were first produced and sold by that company between 1968 and 1987 will, if this clause goes forward, come back into copyright. It might therefore be for the benefit of the Committee if the Minister could confirm whether his right honourable friend the Chancellor of the Exchequer has been alerted to this change, as it may be of some considerable interest to him. I beg to move.

Lord Clement-Jones: My Lords, I strongly support Amendment 28DZB, and I shall also speak to Amendment 28EB. More particularly, in view of the

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very cogent introduction to Amendment 28DZB given by the noble Lord, Lord Stevenson—it was a tour de force, in my view—the fact is that Clause 65 looks more problematic the more one looks at it. The problems are exacerbated as there was no prior consultation by the Government on these provisions, nor is any cost or benefit set out in the impact assessment. Indeed, there has been no really authoritative review of the impact of the ECJ case mentioned by the noble Lord—Flos v Semeraro—and on whether it really does oblige the UK to repeal Section 52.

On the one hand, the design industry says that it has limited benefit, covering only works of artistic craftsmanship and only then pre-1989 designs and the introduction of the unregistered design right regime. The industry also says that works of art produced before 1957 would not benefit from the full copyright protection. On the other hand, many, including the publishing industry and the art and museum world, are very concerned about the impact of the clause on their ability to produce two-dimensional images of these kinds of artistic works, as the noble Lord, Lord Stevenson, has explained.

The proposed new clause is intended to apply the same term of copyright protection to artistic works as the term enjoyed by other copyright works—that is, the lifetime of the creator plus 70 years following their death. Currently, where more than 50 copies of an artistic work are manufactured, the term of copyright is only 25 years.

Publishers are rightly concerned about the impact that this clause may have on the publishers of books that include images and descriptions of artistic works which will now be subject to extended copyright. Such publications would be likely to find themselves retrospectively in breach of copyright. Without this kind of amendment, the clause could, as the British Screen Advisory Council has emphasised—I think that my noble friend Lady Brinton will be extremely interested in this—even include props used in a film and articles in a location where filming has taken place so that this is deemed to be copying of an artistic work which would otherwise have been permitted by Section 52. The position of websites, so important for public access and education, would also be uncertain. It would be even more disastrous if retrospective clearance were required.

I strongly support Amendment 28DZB, which would put this matter beyond doubt. I was delighted to see that it is also supported by the V&A, which is as good a judge as anyone on these matters and is able to take a balanced view—again, we have the word “balance”. However, I do not support the introduction of the novel concept of fair use in Amendment 28DZC, although I understand the motive behind it.

As a preferable alternative, Amendment 28EB, suggested by a group of professors of design and others, tries to meet the needs of follow-on designers—the designers of today and tomorrow that the noble Lord, Lord Stevenson, talked about. There are two concerns that underpin this amendment, particularly from those who have a great deal to do with up and coming designers. Copyright, as they explain, is in important respects more restrictive on follow-on designers than

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the protection given by community and national registered and community unregistered design rights, which limit protection for the making of articles which do not produce on the informed user a different overall impression. So if a designer uses part of an existing designed article but incorporates it in something that overall appears different, under the community registered and UK registered design, there is no infringement. In contrast—and I know that the noble Lord, Lord Stevenson, put this in other words—copyright has been interpreted to prohibit the reproduction of any part which is itself original in the copyright sense of involving creative choices. So if a motif from a textile or wallpaper—we are back to wallpaper—is copied but put in a very different context, there will be infringement of copyright, but not design rights. These professors say that the difference is not widely appreciated, as it depends on a detailed understanding of each legal regime, added to which we are only starting to get court decisions on the interpretation of the community design test and the EU copyright notion of reproduction in part.

5.30 pm

The implications are significant, and they are seriously worsened if we extend the duration of protection from 25 years to life plus 70, which in the case of a design made by a designer at the age of 30 who dies at the age of 85 would be 125 years. New and contemporary designers will not be allowed to reuse any original part of existing designs dating back for much of the 20th century. They say that we tend to hear more from established designers in the design industry not fully appreciating the implications for the future. So while generally supporting the intention behind Clause 65, it does need some important amendment. At the very least the clause, even if amended along the lines suggested, should not be brought into force until there has been a consultation and appropriate provision has been made to protect the interests of third parties in future as well as during a transitional period.

Baroness Warwick of Undercliffe: My Lords, there are concerns about the impact of Clause 65 on designers and manufacturers, but this amendment seeks to address a problem which the clause will create for anyone who wants to use a two-dimensional representation of a design that is in copyright. This will affect a wide variety of users, but I am most concerned about the impact on those involved in teaching design. I declare a non-financial interest as a member of the council of University College London.

It is obvious that one cannot teach design without being able to show images of designs to your students. If you want to do this by example, showing a PowerPoint slide of a design during a lecture and the item is in copyright, you need a licence. If the term for industrial designs is increased to 70 years plus life, that means that you will need a licence for almost all 20th century designs. Many of these will be orphan works, so securing a licence under the current law would be difficult if not impossible. This would be eased by the orphan works provisions, which we will come to shortly. Meanwhile, this will have a real impact on the teaching of creative subjects.

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In copyright, we have had almost nothing but consultation for the last decade, yet there was no consultation of non-commercial users here. The Government should consult all those potentially affected by the impact of this clause. The proposed amendment would be a proportionate response to the problem, allowing teachers, lecturers, museums, publishers and libraries to use photographs of designs without the need of a licence. It is in the interests of the creative sector that we allow such uses.

Viscount Bridgeman: My Lords, I speak to Amendment 28DZB, which has been so ably covered by the two movers of the amendment. I support this amendment as far as it goes, but it needs to make the distinction between incidental use, such as a passing shot of a chair on a TV programme, and one with a wider agenda—for example, financial or political. A well known example of the latter is the case about two years ago brought by Unilever, owners of the Marmite brand, against the BNP, whose image of a Marmite pot was a major feature on the BNP website. This resulted in an out-of-court settlement in favour of the plaintiffs. I hope that the Minister will take note of this proposed adjustment to the amendment.

Lord Howarth of Newport: My Lords, I support Amendment 28DZB. My noble friend Lord Stevenson of Balmacara has explained to the Committee why the jurisprudence of the European Court of Justice does not require after all that the Government repeal Section 52. I hope that the Government will think again very carefully about what they are doing.

I commend to the attention of the Minister and his officials the submission that other noble Lords will have received from Professor Lionel Bently of the University of Cambridge, which deals authoritatively with this matter. There would be significant and seriously unfortunate implications for teachers, publishers, museums, photographers, artists and filmmakers.

I echo and endorse the points very well made just now by my noble friend Lady Warwick. The impact on the practical ability of teachers of design to teach their discipline properly would be very damaging. If we undermine the teaching of design in this country, we do deep damage to the creative economy and make it less likely that new copyright and intellectual property will be developed for the benefit of our culture and our economy in the decades that lie ahead.

Baroness Brinton: My Lords, I particularly support the comments made just now by the noble Baroness, Lady Warwick, and the noble Lord, Lord Howarth of Newport, on how the proposals would affect teachers in schools, colleges and universities. We have already heard that in order to use any type of digital information, users will need to apply for a licence. In addition to teachers, publishers reproducing photographs of industrially produced articles or museums and archives wanting to display them will also require licences. Along with other noble Lords, I am concerned that this will stifle the development of the creative sector, which is vital to the growth of the economy. There

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needs to be a balance between what is trying to be achieved and the practical problems that teachers and others would face.

I am also concerned that the government impact assessment focuses solely on commercial designs—as was pointed out by the noble Lord, Lord Stevenson—particularly replica furniture and other household goods. It is essential that non-commercial users are also consulted; they are currently covered by Section 52 of the CDPA, as has been mentioned. Those would include academics, museums, archives, libraries and publishers to make sure that the repeal of this provision does not have a negative, unintended consequence.

On Amendment 28EB, I am grateful for the reference by my noble friend Lord Clement-Jones to props in theatre. Unfortunately, the second paragraph of his amendment would create a practical problem. Before I went to Cambridge, I was a stage manager at the BBC. When you ordered a prop, you ordered it in one of three forms. It was either fully practical, for example a phone that would ring and you could speak to somebody; practical, so that you could pick it up and it would look and sound like the real thing; or non-practical—basically wood painted to look like the required item. All three of those were an identical telephone. Unfortunately, the clause would create a real problem, because the intention was to produce the article, as defined here, with no intention at all to infringe any copyright. I suspect that, with phones being so cheap these days, people do not go to the bother that they used to in the early and mid-70s when I was carrying out these orders, but there are plenty of other things within the creative sector that would be caught by this unintentional consequence.

Lord Clement-Jones: I want to respond very briefly to my noble friend. This amendment is intended for an entirely different purpose. It is not designed to deal with the props issue. The amendment put forward by the noble Lord, Lord Stevenson, was to deal with that, but this is to deal with an entirely different issue to do with follow-on design. Young designers use inspiration from an existing artistic three-dimensional work and want to incorporate that. That is the purpose of this amendment. This is needed in addition to other amendments to the clause. That is why the more you look at Clause 65, the more problematic it becomes.

Baroness Brinton: I am grateful to my noble friend for that clarification.

Viscount Younger of Leckie: My Lords, Amendments 28DZB and 28EB are intended to ensure that artistic works can continue to be used in two particular ways after the repeal of Section 52 of the Copyright, Designs and Patents Act, or CDPA for short: first, that it shall not be an infringement to use an image of an article protected by copyright in a film, photograph or book; and, secondly, that it shall not be an infringement for new designs to use motifs from artistic works protected by copyright. For example, following the repeal of Section 52, a publisher who reproduces a photograph of any artistic work in a book may need to obtain

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permission to do so. Similarly, the scope for follow-on design may be restricted. The amendments are intended to make special provision for those circumstances.

The repeal of Section 52 means that all artistic works, irrespective of how and by whom they are used, will be treated equally under the law. The amendments seem to be intended to create special cases for particular uses of works. It is not clear that there is a compelling reason for some artistic works to be treated differently in that way. For example, why should it be necessary for a filmmaker to obtain permission to reproduce a painting by Francis Bacon, but not for another artistic work, such as a designer lamp?

Amendment 28DZC would create an exception that would cover the situations outlined above, but it goes further. It would in some circumstances allow the production of replicas and not just images of articles protected by copyright. As drafted, this would not be compliant with existing law.

There is another aspect to consider. In December, the Government announced changes that will be made to copyright exceptions. These will include, for example, an amended quotation exception, which will permit the use of photographs of artistic works in situations that the courts determine to be fair, and new exceptions for education. Those could cover some uses envisaged under the amendment. I reassure the Committee that the issue can be returned to when we have some experience of how the new arrangements work.

I shall pick up a number of points raised by noble Lords. First, I did indeed spot the article in the press this morning concerning the family business of a well known member of this Government. I think that the question of the noble Lord, Lord Stevenson, was: is it true to say that the wallpaper produced by the Chancellor’s family-owned interior design business will qualify for copyright protection? The repeal of Section 52 could benefit anyone who owns the copyright in a wallpaper, but not all wallpaper will qualify for copyright protection. That will depend on, for example, whether the wallpaper meets the requisite standards to qualify for copyright protection and is, for example, sufficiently artistic and original. Ultimately, that will be a matter for the courts to decide. The Government and the Design Council consider that the repeal of Section 52 will benefit young designers, as it should lead to UK designers developing new designs in markets that become less dominated by copies of artistic works. I hope that noble Lords find that particular example helpful.

It is important to address the point raised by the noble Lord, Lord Stevenson, concerning consultation. Indeed, it was an issue addressed by the noble Baroness, Lady Warwick. It concerns what consultation there will be before the repeal of Section 52. The UK is one of the few member states that has such an exemption. Further consideration will be given when the Government consult on how and when to bring that into force. Further to that, I reassure the noble Lord, Lord Stevenson, that the Government have discussed the repeal of Section 52 with interested bodies, including representatives of sellers of replicas of classic design furniture, such as Scott Howard Office Furniture. We

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have also had discussions with the Publishers Association, the chairman of the IP Bar Association and Professor Lionel Bently.

The Government will consult formally on how and when the repeal should take effect. We want to hear from affected firms to ensure that the right transitional arrangements are in place to allow them to adjust—for example, by modifying their supply agreements where necessary. The Government believe that it will be business as usual for many British firms who manufacture or sell affected replicas.

The noble Lord, Lord Stevenson, highlighted the question of how Clause 65 is supported by designers. Designers argue that the law undermines the integrity of the design industry and may make British companies less willing to support long-term investment in areas such as furniture design than their European competitors. I quote Sir Terence Conran:

“By protecting new designs more generously, we are encouraging more investment of time and talent in British design. That will lead to more manufacturing in Britain, and that in turn will lead to more jobs—which we desperately need right now”.

Tom Dixon, a British designer, has said:

“Current copyright laws leave designers woefully under protected compared to similar creative professions. This initiative is a small step toward establishing much needed protection of valuable intellectual property”.

The Government have considered these issues very carefully. I hope that in the light of the above, the noble Lord, Lord Stevenson, will withdraw his amendment.

5.45 pm

Lord Clement-Jones: Briefly, my Lords, if I may, I understand everything that the Minister has said, but I was a bit flabbergasted by the final statement that the Government have considered this very carefully. The Minister mentioned a few people whom the consultation had taken place with, but the fact is that those people who are suggesting amendments are the very people with whom the consultation has taken place—the Publishers Association and seven professors of design who, after all, ought to know whether young designers are going to benefit from this kind of provision. They have a clear view when they are looking at young designers in the future. There are seven of them, from the University of Cambridge, King’s College London, the University of Glasgow, Oxford, University College London, Bournemouth University and the University of Edinburgh. If they do not know what is going on in the field, who does? They have grave concerns. I felt that the Minister’s response was both disappointing and rather dusty. Perhaps he could give some sort of undertaking to look at this a bit more carefully rather than simply saying, “There is no amendment possible to this clause; all that is available is consultation over how it is brought into effect”. Surely that is unacceptable in the light of all the concerns that have been raised about Clause 65.

Viscount Younger of Leckie: I have listened carefully to my noble friend Lord Clement-Jones on these matters and have taken note. I am not sure that I can convince him that consultation is the right way forward, but

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I hope that he will accept that. I doubt that he will, but I have taken a firm note of what he has said.

Lord Stevenson of Balmacara: My Lords, I am grateful to everyone who has contributed to this debate. We all broadly sung much the same tune. There are minor changes and I accept the point about the incidental and substantive issues and the need to be careful that we do not knock out the use of props in trying to find a better solution than the one that the Government are proposing.

I am afraid, though, that I echo the comments of the noble Lord, Lord Clement-Jones, by saying that I do not think that we got to the heart of the debate here. To be fobbed off with the idea that somehow by taking these rather extraordinary Henry VIII powers—probably on the wrong legal basis and almost certainly heading in the direction of a conclusion that almost no one else, given the same facts, would arrive at—and then to be told that we can return to this once we have experienced how the laws work does not seem to be a very satisfactory way of going about this.

This needs a bit more consideration and debate. As was said, many of the issues here are not party-political in the sense of opening up great divides between us. We all want a solution to this; I have said twice that I am not against the idea that in the medium to long term we should find a way of establishing a comparability of status for industrial designers and those in the other creative industries. On the other hand, as the noble Lord, Lord Clement-Jones, said, life plus 70 years is a very long time. To change radically, in one short clause in a Bill that is largely about other things, from 25 years to life plus 70 is a big step. We are not saying, “Don’t do it”, but we are saying, “Let’s talk about this a bit more and try to get a better sense of what the issues are”. As someone said—I think that it was the noble Baroness, Lady Brinton—we are concerned about avoiding unintended consequences. There are some already, and we have picked up several of them in the examples that we have given today.

On wallpaper, I thought that hoping that the Hargreaves report would come to the rescue was a little limp. We are not talking about the sort of designs that might be found in commercially popular suppliers of cheap paper and products; we are talking about those people who have registered designs that they have utilised in a perfectly appropriate way in their business to obtain a suitable return on their investment for a number of years. That is changing from 25 years to life plus 70 where the registered design is in the ownership of the company. That is a very large step indeed.

I used that only as an example. I did not want the Minister to be defensive about it, but it made my point well. The approach that he has taken simply does not answer the question. I am sure that we will have to return to this but, in the interim, I beg leave to withdraw the amendment.

Amendment 28DZB withdrawn.

Amendments 28DZC and 28DZD not moved.

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Clause 65 : Exploitation of design derived from artistic work

Amendment 28DA

Moved by Baroness Whitaker

28DA: Clause 65, page 61, line 8, at end insert—

“( ) in Schedule 1, paragraph 6;”

Baroness Whitaker: My Lords, this group of amendments is about Clause 65 as it affects the creators of the work and thus it has a different slant. I apologise for not being able to speak at Second Reading to indicate the line of the amendments in my name and that of the noble Lord, Lord Jenkin of Roding, but they are very much in the spirit of the Government’s repeal of the exception provided in Section 52 of the 1988 Act, which I applaud. I am glad to say that the design industry is in favour of our amendments and I am grateful for its expert comments.

Amendment 28DA simply completes the protection for our creative designs that the Government provide by their initial repeal by applying it also to works of art made prior to June 1957. Most heavily copied classic designs, such as the Eames chair, were created prior to 1957, so without this amendment the Government’s repeal would be of limited value and, incidentally, would leave the UK in breach of the European Court of Justice’s decision in Flos, to which my noble friend Lord Stevenson and other noble Lords have referred.

Amendment 28FA also completes, I submit, the Government’s intention in their repeal. The two provisions in it are almost consequential to Clause 65. The amendment to Regulation 16 of the Duration of Copyright and Rights in Performances Regulations 1995 ensures that the regulations apply to copyrights that were never protected under previous legislation but will be now. If Regulation 24 of those regulations were not amended as we suggest, the making or import of copyright-infringing articles would be permitted indefinitely, on payment of a royalty, in cases where, for instance, a furniture design has been revived. This again is incompatible with EU law. Without this amendment, some of our most important and iconic designs would not receive the protection that the Government appear to have in mind.

Amendment 28EA ensures a short transition period of four months, but with the possibility of a four-month extension if warranted, for third persons who manufacture or who hold stocks of copies of design works within the European Economic Area. Most of these replicas are not made in the EEA—we all know where they are most likely to originate. The repeal of Section 52 will not have any substantial impact on employment or businesses in the UK, so it is reasonable to allow a short time for them to comply, with a proportionate extension to strike a balance—there we go again with balance—between the rights of designers and the interests of undertakings caught by the new law.

In conclusion, I draw noble Lords’ attention to the present situation for our many talented designers who add so much to our economic strength, as the Minister said. Because there has been insufficient protection,

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the UK has become a safe haven for the sale of replicas of designs that breach copyright. Only two other countries in Europe fall short of good practice in this way: Estonia and Romania. Indeed, there are several criminal prosecutions pending against UK-based suppliers in other countries. The damage to the reputation of our design market—potentially one of our great strengths—is immense. No British jobs are at stake if we implement these amendments and fair competition as well as our international reputation will be improved. Our brilliant design businesses will have more security to develop. It is a win-win prospect. I beg to move.

Lord Jenkin of Roding: My Lords, I added my name to the noble Baroness’s amendment. I, too, have had representations from the organisations that represent designers, and emphasise one point made by the noble Baroness: that many of these replicated designs are not made in the EEA, and certainly not in the UK. One group conducted considerable research on this subject and discovered that quite often a UK name is linked with the design, but that when you go behind that you find that it is largely a sham. It is quite clear that all this comes from abroad, so merely repealing Section 52 by itself will not achieve the Government’s intentions. As for their representing it as being of considerable value to designers, I have to say that without the two amendments in this group which the noble Baroness has tabled, it will be largely ineffective.

I hope very much, therefore, that the Government will feel able to accept these amendments. As the noble Baroness said, they complete the reform which the repeal of Section 52 is intended to provide. They add nothing that is extraneous to it, they merely make it effective, and I am sure that that is what the Government want. I hope very much that my noble friend the Minister will feel able to give these amendments a fair wind.

Lord Howarth of Newport: My Lords, I oppose these amendments. It seems to me that the extension of copyright design from 25 years to life plus 70 years is altogether excessive. That could amount to something like 120 years, and it would be particularly unfortunate if we were to extend the proposed provisions to apply to designs created before 1957. I entirely support the principle of a fair return to designers and to their estates, but it seems to me that 25 years is sufficient. I am not in favour of protecting the monopoly of the purveyors of Eames chairs, which my noble friend Lady Whitaker cited as an instance, or indeed of Eileen Gray chairs or any other famous and beautiful designs that would be affected by this amendment. It seems to me that the prices that are charged to people who want to buy these pieces of furniture are quite outrageous. I ask my noble friend Lady Whitaker in particular why good design should be available only for the rich? I want to see Eames and Gray designs for the masses.

I further note that the proposals in these amendments are protectionist. That does not seem to me to be particularly constructive. They are keen to keep out replicas that might be made elsewhere. If we were not to perpetuate beyond 25 years the inhibition on manufacturing and retailing in this country, we would

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do good to a significant sector of our economy and we would enable the quality of life of a significant number of people to be significantly improved. So personally I do not favour the amendments that have been proposed.

6 pm

Lord Clement-Jones: My Lords, I speak to Amendments 28E and 28F. The Government, and indeed the IPO, published a factsheet on copyright protection for designs, but with the best will in the world this was not adequate, especially in the absence of an impact assessment. The Government need to provide detail in the Bill on the transitional arrangements that they intend to introduce. Without clear and explicit communication about those arrangements, manufacturers and others affected—we have heard that considerable numbers will be affected—will not feel confident that their works and therefore businesses will not be affected. Waiting for the Bill to pass before consulting on transitional arrangements is surely unacceptable and creates a climate of uncertainty. The Government need to be clear as to what they believe is an acceptable and legal transition period. Under European law, the UK Government may have limited scope to introduce transitional arrangements that would be broad enough to mitigate a significant and detrimental impact on third parties. We know that, at the very least, a period of 10 years’ transition has been ruled by the ECJ as being too long, so it is vital to know what period of transition the UK Government believe would be in compliance. Will the Government provide an impact assessment to analyse the effect of various transitional provisions under the clause on the publishing and other third parties? My amendments put forward two rather different suggestions for the transitional period for replicas of artistic designs and are an attempt to tease out the Government’s real intentions. The first amendment is very similar to that put forward by the noble Baroness, Lady Whitaker, and is designed to flush out the process by which the Government intend to introduce transitional provisions. The second, along the lines of that of the noble Baroness, Lady Whitaker, is designed to probe the actual transitional provisions.

Amendment 28F would ensure a short—six months is more reasonable than four—transitional period for products manufactured within the EEA, and third persons that hold stocks of unsold items in the EEA. That is a variation of the amendment proposed by the noble Baroness, Lady Whitaker. It also foresees a six-month extension if a third party provides justification of some exceptional circumstances. The design companies say that most companies offering replicas of artistic designs do not manufacture those products in the EEA. We heard that from the noble Baroness and from the noble Lord, Lord Jenkin. They say that most replicas are imported from Asia. Has an assessment been made of this, and has it been assessed as part of the likely transitional periods? A six-month transitional period under Amendment 28F could be extended up to 12 months. It would also be in line with EU law by being proportionate and not going beyond what is needed to ensure an appropriate balance between the interests of the right holders and the legitimate expectations of the parties concerned.

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Viscount Younger of Leckie: My Lords, Amendment 28DA seeks to ensure that copyright is revived in works of artistic craftsmanship created before 1957. This would apply, for example, to works such as the Wassily chair, designed by Marcel Breuer in 1925 to 1926. Chairs seem to be a favourite theme today. The noble Baroness, Lady Whitaker, mentioned a chair; I was not entirely clear what type of chair it was.

The law in this area is complicated, but the term directive is clear. If the chair was protected by copyright in any other member state before 1995, copyright would also have to apply in the United Kingdom. Amendment 28FA also concerns those works in which copyright is revived. It seeks to remove those provisions which impose an obligation on the owner of a revived work to grant a licence even if he would prefer not to do so. The noble Baroness, Lady Whitaker, has raised an interesting point with this amendment that deserves further consideration. We shall have the opportunity to consider these very specific issues more carefully before the clause is commenced and there will be the opportunity to deal with the issue in the relevant regulations.

Amendments 28E, 28EA and 28F seek to set out the transitional provisions which govern how the change in the law will apply to articles made or imported into the UK or EEA when the law is changed. The Government are aware that there are potential impacts on businesses that manufacture or sell replicas and are committed to consulting on how and when to implement the changes.

My noble friend Lord Clement-Jones asked whether there will be an impact assessment to show the potential effects of the transitional provisions on producers and other third parties. The Government have already produced an impact assessment and will ensure that it is kept up to date as the legislative process moves on.

There are pros and cons to setting a relatively longer or shorter transition period. We understand how that concerns my noble friend Lord Jenkin and the noble Baroness, Lady Whitaker. It will be important that any decision on transitional provisions takes account of the consent of all parties involved. That includes, for example, the length of existing supply contracts and leases for warehouses where products are stored. I confirm to the Committee that we intend that existing stock in the UK will not be affected by the change in the law; the change will apply only to items manufactured or imported after that date. If an express transitional provision proves necessary, the regulations shall provide for it.

This change in law needs to be introduced in a measured way, balancing the needs of the parties involved. The Government have carefully considered the issues and I hope that, in the light of the above, the noble Baroness and my noble friend will not press their amendment.

Lord Clement-Jones: I shall intervene only briefly. It is good news to hear that there is an impact assessment on business and other third parties which will be regularly updated, but, personally, I am none the wiser about the Government’s intentions about time periods for the transition. It is rather baffling. If there is an impact assessment which helps to inform government

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policy in this respect, it has not been used to take the next step, which is to give a concrete view of the proper period, how the transition will take effect and on whom it will impact.

If the regulations are in the offing, it would be extremely helpful for the Minister at least to give us a glimpse of some of the thinking, which might allay some of the concerns raised in this short debate.

Viscount Younger of Leckie: I can only reiterate to my noble friend Lord Clement-Jones that we are committed to continuing to consult. The best way to respond is to say that we will continue to keep him informed on progress. Progress is not intended to be slow; we intend to proceed with this as fast as we possibly can and to present a timetable wherever we can.

Baroness Whitaker: I am most grateful to the noble Lord, Lord Jenkin of Roding, and all others who spoke—even my noble friend Lord Howarth of Newport who, uncharacteristically, devalues the individual nature of creative inventions. If that individual, unique creation is not properly recognised and compensated, it will decreasingly be made, certainly in the UK. Apart from the simple injustice, which is the other point, there is an economic chilling factor.

I am grateful to the Minister—incidentally, it was the Eames chair that I mentioned; in fact, all the Eames chairs would qualify—but I hope for discussion with him before Report, because I think that we can arrive at some solution. I beg leave to withdraw the amendment.

Amendment 28DA withdrawn.

Amendments 28E to 28F not moved.

Clause 65 agreed.

Amendment 28FA not moved.

Clause 66 : Power to change exceptions: copyright and rights in performances

Amendment 28FB

Moved by Lord Stevenson of Balmacara

28FB: Clause 66, page 61, leave out lines 15 to 31 and insert—

“( ) The Secretary of State may by regulation vary penalties in accordance with the penalties laid down in the Act.”

Lord Stevenson of Balmacara: My Lords, as originally drafted and debated in another place, this clause equipped the Government with wide-ranging and far-reaching powers to amend, remove or introduce exceptions to copyright via secondary legislation. It caused a fair amount of alarm and a lot of correspondence from those who were following the debate in another place. Many noble Lords present today will have received correspondence about this.

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The amendments made during Report in the House of Commons clarified that the regulations,

“may make only such provision as may be made under subsection (2) of section 2 of European Communities Act 1972 or such provision as could be made under that subsection if paragraph 1(1)(d) of a Schedule 2 did not apply”.

I think that means that the Government’s stated aim is to,

“make it clear that [the clause] offers no further power than Parliament already has to make changes to copyright exceptions”.

However, we are disappointed that the language and scope of the clause continues to focus on exceptions to copyright, rather than criminal penalties, which ostensibly is its purpose.

If the Government’s intention is to safeguard criminal penalties for copyright infringement—which is absolutely necessary—we cannot apprehend why there continues to be such a resistance to making that intention unequivocally clear on the face of the Bill. Many of our correspondents would like to see this clause deleted in its entirety. Indeed, a number of proposals have been made in that respect. We have, however, proposed that amendments that seek to narrow and clarify the intentions of the clause in line with the Government’s stated aims, by stipulating that each proposed exception to copyright is subject to an individual statutory instrument and has its own associated economic impact assessment would be the right way forward. Reform of exceptions must not be bundled into a single SI.

Seemingly minor amendments related to changes in the scope of copyright exceptions can have significant commercial consequences for organisations that invest heavily in content creation and preservation. Each individual exception requires careful consideration. I beg to move.

Lord Clement-Jones: My Lords, I strongly support the amendments put forward by the noble Lord, Lord Stevenson. The stated aim of Clause 66 is to ensure that where secondary legislation is used to amend copyright exceptions, the existing penalties for copyright infringement would remain unchanged. This is stated in paragraph 506 of the Explanatory Notes. This stated aim by itself is unobjectionable. However, throughout the Bill’s passage through the Commons, MPs and outside organisations expressed serious concerns regarding the wide drafting of the clause—then Clause 56 and 57. The drafting was too broad and potentially involved the Government having significantly greater powers to alter copyright exceptions by secondary legislation than they currently enjoy. The Government amended this clause on Report. An amendment introduced on Report in the Commons permits the Secretary of State by order to change copyright exceptions within the scope permitted under subsection (2) of section 2 of the European Communities Act 1972—implementing European directives—and repeals paragraph 1(1)(d) of Schedule 2 to the EC Act in respect of such changes.

The new wording to Clause 66 gives some but not enough reassurance or certainty that the clause will be limited in application to penalties. The Government’s explanation of Clause 66 refers to penalties. Clause 66,

“arose as a specific consequence of our wanting to keep the strong penalties needed to remove exceptions.”—[

Official Report

, Commons, Enterprise and Regulatory Reform Bill Committee, 12/7/12; col. 628.]

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However, Clause 66 is headed “Power to change exceptions: copyright and rights in performances”. The clauses as added to the Copyright, Designs and Patents Act 1988, which they are intended to amend, will be headed “Power to add or remove exceptions to copyright” and “rights in performances” and the clause itself refers to copyright exceptions.

Furthermore, as the noble Lord, Lord Stevenson, said, there is no impact assessment and there has been no consultation on the clause. These amendments limit the clause to penalties—it removes the references to copyright exceptions. The Government have explicitly stated that they will not use Clause 66 to introduce exceptions. The Government stated that:

“Clause 56 is not part of the wider Hargreaves work but arose as a specific consequence of our wanting to keep the strong penalties needed to remove exceptions.”—[Official Report, Commons, Enterprise and Regulatory Reform Bill Committee, 12/7/2012; col. 628.]

Clause 69 is in many ways admirably concise in relation to penalties relating to copyright protection under the term directive. Clause 69 refers explicitly to penalties and is unambiguous. Why can Clause 66 not be drafted similarly?

I understand that officials have said that Clause 66 may be used to amend two sections, Sections 72 and 73 of the CDPA, but those issues are the subject of court proceedings and it is doubtful whether Clause 66 as amended would be able to address the issues adequately, because they lie outside the European acquis communautaire and further primary legislation would be needed in any event.

It is not surprising that in a recent meeting with stakeholders, an official of the IPO said that all are agreed that the current wording of Clause 66 is confusing. Why do we not make everything clear and take on board these amendments?

6.15 pm

Viscount Younger of Leckie: My Lords, Amendments 28FB and 28JAA cover the scope of Clause 66. The Government recognise that concerns about this clause remain, despite their efforts to clarify the scope through a government amendment on Report in the Commons. The Government have looked carefully at these amendments and I believe that we understand the intentions of the noble Lord, Lord Stevenson. However, we believe there is the possibility that the amendments as currently drafted would in fact widen the scope of the Government’s power to effect changes in this area with respect to criminal penalties. I do not believe that that is what the noble Lord intended through his amendments.

The Government’s intention with this clause has always been to maintain the current level of criminal penalties whenever it is required to amend or remove copyright exceptions. However, there remain concerns about this clause, as reflected in the intention behind the noble Lord’s amendments. In this light, I am prepared to look again at what more can be done to ensure the clause does exactly what the Government intend and no more.

I hope that in light of the above assurances the noble Lord will withdraw his amendment.

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Lord Clement-Jones: I always get up when there is something to object to, but in this case I will thank the Minister for that reply. I am sure that the noble Lord, Lord Stevenson, will make a very positive response.

Lord Stevenson of Balmacara: My Lords, he does not give me much leeway, does he? I thank him very much, and I withdraw the amendment.

Amendment 28FB withdrawn.

Amendment 28G

Moved by Lord Clement-Jones

28G: Clause 66, page 61, line 29, after “containing” insert “each individual”

Lord Clement-Jones: My Lords, I will speak to Amendments 28G, 28H and 28J. I will not speak to Amendment 28JA, but I support it, and I know that the noble Lord, Lord Jenkin, will speak to it.

As has been discussed, an earlier version of Clause 66 was the subject of extensive debate in the House of Commons, particularly in Committee. As a consequence of the points raised, the clause is amended, and I welcome the fact that the Minister has indicated a further amendment to give greater clarity about the intention behind the Bill since then. The primary intention behind this clause is to allow new exceptions to copyright to be accompanied by the introduction of higher criminal penalties for infringement: the power which the Government do not have under the ECA.

However, many copyright-owners in the creative industries are very concerned even—we heard concern expressed earlier, notably by the noble Lord, Lord Stevenson—that secondary legislation will be used under the ECA, not least the Law Society, of which I am a member. Secondary legislation is difficult to review or challenge, even though subject to the affirmative procedure of both Houses. This is what the Alliance for the Protection of Copyright says: “However, our support”, for Clause 66,

“should not be read as support for the introduction via secondary legislation of the exceptions proposed in the recent Copyright Consultation. Given the potential negative consequences”—

for UK creators associated with “these proposals” changes,

“should … be introduced via primary legislation allowing parliamentarians’ full and proper scrutiny”.

Of course, as I said earlier, following Hargreaves the Government proposed, and have started implementing, a copyright hub that without legislation and by the voluntary participation of rights-holders and users is intended to solve the problems perceived by Hargreaves, at which the exceptions by and large are directed. Therefore, there are many who claim that those exceptions are unnecessary.

However, even if secured by secondary legislation, exceptions that impact so greatly on the UK’s creative industry sector should not be bundled in a take-it-or- leave-it fashion, which would not allow the varying impacts of such proposals on separate creative sectors to be appropriately taken into account. At the very least, they should be accompanied by individual impact

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assessments and introduced in separate SIs. In the recent

Modernising Copyright

White Paper, it is stated that the Government intend to make changes to copyright exceptions in the smallest number of statutory instruments. Therefore, if secondary legislation is to be used, each proposed exception to copyright should be subject to an individual statutory instrument, contrary to that statement. Rights holders are concerned that the introduction of any new copyright exceptions, whether through Clause 66 or the ECA, must be done through careful consideration of each individual exception.

The other possibility—that exceptions be bundled together in a single statutory instrument—would prevent Parliament being able to accept some changes while rejecting others. Such a take-it-or-leave-it approach to copyright reform is wholly unsuited to the nuance and detail of the subject and risks there being a fudge across a number of different issues—for example, conflating questions around photocopying educational text books with the question of burning CDs.

There may, however, be some exceptions which are linked and which could be dealt with together. Some of the exceptions are interrelated. For example, I gather that the IPO believes that the exception on private study links with the exception for research and with the exception which permits libraries to copy for a researcher. Therefore, there is not an unreasonable demand where there are links. It will be important to ensure that changes across exceptions are consistent, and separate SIs for each proposed change could lead to problems of inconsistent law.

Each proposed exception should have its own associated economic impact assessment. As the economic evidence which accompanied the Hargreaves review of IP and growth sadly demonstrated, the economic analysis underpinning some proposed changes to copyright is either lacking or flawed. Officials have indicated that new impact assessments will be published alongside any proposed changes to copyright, and I would certainly welcome reassurance from the Minister that that will be the case. I beg to move.

Lord Jenkin of Roding: My Lords, I wish to speak briefly to Amendment 28JA. The noble Lord, Lord Clement-Jones, and I have discussed the issue of separate statutory instruments for each exception. As he said, they may have totally different effects and it would be quite difficult for the House to debate one single compendium of exceptions when they may involve very different interests and very different impacts. Mentioning impacts leads me to say that, if there are to be separate statutory instruments for each change passed under this clause, there should be separate impact statements.

Some weeks ago, I collected the impact statement for this Bill from the Printed Paper Office. I have not attempted to weigh it but it is about two inches thick and I must confess that I have not waded through it. Of course, the Bill contains a whole range of issues but one realises that, when departments produce impact assessments on this scale, you have to be a very devoted Peer and have plenty of time to be able to make anything of them. I suspect that some of the changes that may be envisaged as being achieved by order under this clause may be wholly unexceptionable, in

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which case so be it. However, there may be some which will be very controversial and should be properly debated, in which case they should have a separate impact assessment. That is the burden of the amendment to which I have put my name and I hope that the Minister will take account of it when he responds.

Lord Howarth of Newport: My Lords, the noble Lord, Lord Jenkin, is the most diligent of parliamentarians. If he has not been able to read the impact assessment from start to finish, that illustrates that we have problems in achieving satisfactory scrutiny of legislation.

I support Amendments 28H, 28J and 28JA because I agree with noble Lords who have already argued that it is important that we should look at the relevant statutory instruments one by one, in so far as that is realistic and practical.

I believe that it is realistic and practical for Parliament. There may be problems in that, as has already been suggested, the material contained within different statutory instruments may overlap with other statutory instruments to a degree, in which case one must proceed pragmatically. But it is right in principle that Parliament should have the maximum opportunity to examine secondary legislation. One could say that the more minimalist the primary legislation the more important it is to ensure that the secondary legislation that stems from it is thoroughly scrutinised.

We can be a little too defeatist in Parliament about the scope for satisfactory scrutiny of statutory instruments. When I was in the House of Commons, time was all too limited for examining SIs. As a self-regulating House, we are better placed to ensure that we examine statutory instruments more thoroughly in this House. We have committees of the House that take it upon themselves to do a lot of preliminary work on our behalf. There is a disposition and a considerable ability in your Lordships' House to do this job properly.

We cannot overstate the importance of some of this secondary legislation. The creation of new exceptions to copyright law can have a major bearing on the livelihoods of large numbers of people and on the performance of significant sectors of our economy. We owe it to the public whom we serve that we take the greatest care to ensure that these exceptions are properly formulated.

The presumption should be that each one is embodied in a separate statutory instrument and carries with it a separate impact assessment, which I hope will then be on a scale that the Minister and all the rest of us would be able to manage. I hope that the Minister will be able to give a full and formal assurance that this will be the approach of the Government.

Lord Stevenson of Balmacara: My Lords, I add my thoughts to those that have already been expressed about these issues and have some specific questions in relation to Modernising Copyright: A Modern, Robust and Flexible Framework, the latest publication dealing with the way in which copyright exceptions are to be brought forward, which was published in December 2012.

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We have been blessed with substantial impact assessments. Indeed, we have discussed them. Unfortunately, I dropped mine on my foot as I was coming out of my office today and I am still limping as a result. It was really quite heavy. But it was very valuable because I have been reading it and I have got a lot out of it as has been clear in the comments made so far. One of the themes that we have discussed in this series of debates today is how copyright legislation should go forward. In particular, the example that we have had to use, because it is current, is that of the Hargreaves recommendations.

The Government's proposals, as outlined in their modernising copyright report, are that:

“The Government intends to legislate for a new system of permitted acts for copyright works, incorporating the changes discussed in this document. These changes need to be carried through consistently. In the light of stakeholder comments about the degree to which the existing Copyright Act has been amended since 1988, the Government will therefore introduce the system for Parliamentary approval en bloc rather than piecemeal, through the smallest possible number of Statutory Instruments”.

That is not what we are arguing for. We are saying in our amendments that we want more time and more discrete information to be provided. I would be grateful if the Minister, when he responds, could analyse why the Government have said that in relation to the points that we have made.

The Government go on to say that publishing statutory instruments en bloc,

“will help the system be clear and consistent”,

but we would argue quite the reverse. The Government then say:

“For this reason, the Government proposes that all the measures take effect at the same time, the intention being that they come into force in October 2013”,

which is a relatively short time in parliamentary terms. It will be difficult for us to get through all this in the appropriate way, given the sensibility of the discussions.