§ 2.55 p.m.
§ Lord Fletcher
My Lords, I beg to move that this Bill be now read a second time. As your Lordships will observe, this is a very short and simple Bill and I hope one that is entirely uncontroversial. The Bill seeks to add a few words to Section 21(1)(b) of the Copyright Act 1956. In doing so, it seeks to implement the recommendations of the report entitled The Law of Copyright and Designs, generally known as the Whitford Report—a committee presided over by Mr. Justice Whitford which reported in March 1977. At the same time it seeks to give effect to a paragraph in the Green Paper presented by Her Majesty's Government last July on the reform of the law relating to copyright, designs, and so forth. I would refer your Lordships, who may not be familiar with 364 that Green Paper, to paragraph 11 dealing with Section 21 of the Copyright Act, which is now under consideration.
However, I am conscious that simple though the Bill is, nevertheless, it requires a few words of explanation. Your Lordships will be aware that since the Copyright Act 1956 technological developments in copying have resulted in an enormous increase in unauthorised copying of copyright material of all kinds on a scale which could never have been anticipated when the Copyright Act 1956 was passed.
The gramophone record industry was the first to suffer from the proliferation of tape recorders, which are now so popular and inexpensive that I am told that well over half the adult population in the United Kingdom have access to this means of copying. Since then, the film, television and video-cassette industries have also been suffering substantial losses from the activities of what are known as pirates, who manufacture and market video-cassettes of copyright material without authority. I am told that this loss is measurable in millions of pounds annually.
I should perhaps explain for the benefit of those of your Lordships who are not familiar with video-cassettes, that a video-cassette recorder is a device whereby moving pictures and sounds can be recorded magnetically on metallic-coated tape. This is a special kind of tape, quite different from red tape, with which some of us are more familiar. Having been so produced, this recorder enables records to be replayed by the use of the same device through an ordinary television set.
These recorders are much in use domestically to record television programmes for subsequent replaying, and provided it is done domestically there is no harm in that. They can also be used for showing on a television screen video-cassettes on which a moving picture has previously been recorded and which has been purchased or hired by the user. It is estimated that by the end of this year there will be more than one and a half million video-cassette recorders in use in the United Kingdom. With improvements in technology and manufacturing methods, the price of recorders is gradually coming down in spite of inflation.
Apart from the market for video-cassette recorders for use in the home, experience shows that the recorders are also being used in public houses and clubs for more general exhibition. There is therefore already a substantial market for pre-recorded video-cassettes, and this market is increasing, and there is ample opportunity for unscrupulous persons to make and sell, or hire, infringing copies at great profit to themselves. An indication of the size of the problem is provided by the fact that with limited resources the Society of Film Distributors and the London Office of the Motion Picture Export Association of America have under investigation in this country at any one time several hundred cases involving the retail sale, hire or exhibition otherwise than in the home of infringing copies in cassette form of cinematograph films.
The suppliers and the sellers of these infringing copies have a trading advantage over legitimate distributors and dealers. For one thing, an infringing copy can be sold very profitably at a price well below that of a legitimate copy because the latter has to bear some of 365 the production costs of the copyright material. For example, the price of a legitimate copy is about £35 to £40, whereas a pirate copy can be obtained for some £12 to £20. Moreover, the infringing copy competes unfairly because it may become available before the copyright owner, or his distributor, has authorised the making of any video-cassettes of the subject. The most obvious example, and one that is increasing, is the sale, or hire, of pirate cassettes of a film which is having its first run in the cinemas but has not yet been licensed for distribution in video-cassette form.
The film distributors organisations are particularly concerned about this piracy of films on video-cassettes in that these are being bought, or hired, by pubs or clubs for exhibition to their patrons or members, and this is a form of public exhibition which competes seriously and unfairly with cinemas. Dealers in infringing copies—and they are often very small retail outlets—are supplied by pirate producers who operate on a large scale. It is possible by the use of expensive equipment to transfer a cinematograph film on to a cassette and produce similarly as many as 200 copies at a professional standard. These pirate producers are the real threat to the legitimate business of film and television industries, but they would not be able to stay in business without the ability to sell, or hire, their products. This is one of the mischiefs which this Bill I am introducing seeks to remedy.
These pirate producers are prepared to go to great lengths to cover their tracks, and retailers dealing in infringing copies hiring from them are frequently unable, or unwilling, to disclose the original source from which they obtained their supplies. Thus, a retailer who buys as stock for his shop a number of video-cassettes which are infringing copies is guilty of offences under Section 21 of the 1956 Act as it stands; namely, the offence of either selling or letting on hire by way of trade, or by offering for sale or hire otherwise than for domestic use any article which he knows to be infringing copy. For example, the owner of a public house or a club who, without authority of the copyright owners, exhibits video-cassettes to his patrons or members knowing them to be infringing copies is guilty of an offence under Section 21 as it stands.
Guilty knowledge is of course an ingredient in any such offence, but the difficulty of proving guilty knowledge has, in the past, inhibited prosecutions under Section 21. Under the amendment that I am proposing the burden of proof will still remain on the prosecution to prove the offence, but I am convinced that the great deal of publicity which is being given to the scale of pirate activities combined with the warnings which will be issued to those found to be dealing in infringing copies will bring about an increase in the number of prosecutions under the existing section.
This amendment will not make a criminal of the retailer who, through ignorance, has been deceived by his suppliers in dealing with infringing copies. Therefore, the addition to the section of the few words, "by way of trade has in his possession" under Section 21 will deal with the not uncommon case of the retailer who at present keeps clear of trouble by selling or hiring them only to selected persons already known to him. In other words, there may be a person with guilty knowledge but against whom it has proved difficult to obtain evidence of actual sales or lettings. 366 In such a case, if evidence of possession of stock of infringing copies is established, the circumstance may be such that guilty knowledge can be assumed. Without such outlets the real pirates cannot flourish. There is a further and very substantial mischief which this Bill introducing this small amendment seeks to avoid. For retailers to obtain infringing copies of videocassettes there has to be a manufacturer or a producer.
Sometimes these infringing copies are sold for the United Kingdom market. In other cases they are sold for export, and one knows there are available in London the technical facilities for copying onto cassettes in the various television formats in use throughout the world. It is widely believed that, as a result of these copying facilities, London is now considered the centre for international film piracy, and that of course is damaging to British trade interests and our reputation.
The amendment proposed in the Bill therefore seeks to bring within the scope of the law an exporter who has obtained a quantity of video-cassettes for export. As the law stands he cannot be caught. He could however be caught if the law were amended so that it became an offence for such a person to have these articles in his possession by way of trade. It would all still of course be necessary for the prosecution to prove guilty knowledge.
I hope I have said sufficient to satisfy your Lordships that the principal reason why the amendment is so desirable is to strengthen and clarify the law in a way which has already found favour with the Whitford Committee and the Government in their Green Paper, and it is hoped that, by passing the Bill, a step will be taken to inhibit the spread of retail outlets for the products of film piracy. It will also of course help to protect the legitimate interests of copyright owners and their licensees. My Lords, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Fletcher.)
§ 3.13 p.m.
§ Lord Lloyd of Kilgerran
My Lords, I support the proposed amendment of the Copyright Act 1956 which makes possession by way of trade of material which infringes copyright subject to penalties. The amendment is a very important step forward for the protection of property. It is an urgent and important matter in view of the large-scale pirating and unauthorised copying of, for example, software, computer programmes and recordings of literature and music of all kinds.
The noble Lord, Lord Fletcher, emphasised the danger to the television and film industry. He did not emphasise, as I propose to do briefly, the danger to computer activities and particularly the copying of computer programmes. This is Information Technology Year, and the Minister for Information Technology, Mr. Kenneth Baker, is doing, as the whole of industry agrees, a splendid job for the United Kingdom industry in this field. Therefore, in my view, he should be strongly supported by the Government in taking urgent steps, as suggested in the Bill, for the protection of property associated with the work of information technology.
I attended, as no doubt many of your Lordships did, the exhibition on information technology, INFO 82, at the Barbican last week. I had the privilege of speaking to a conference, which was held at the same 367 time as that exhibition, on the international legal position in this sphere relating to copyright and pirating. In the protection of rights in software and recordings, for instance, it has been agreed by many nations and by the World Intellectual Property Organisation that the law of copyright is the only way protection can be given to the various things that are now being widely and extensively pirated. Many countries, like the United Kingdom, have, in so far as computer programmes are concerned, excluded protection by way of patent rights, but the problem in dealing with the pirates is how to deal with people who possess the information or material which is the subject of copyright.
The noble Lord, Lord Fletcher, referred to the position of the innocent infringer, a subject to which I feel I must refer. In my view—and no doubt your Lordships are somewhat worried about the position of the innocent infringer should the Bill be passed—although his position has recently been made far more complicated as the result of a Court of Appeal case, I assume (I am sure Lord Fletcher will agree with me) that the innocent trader will still have his defence, having regard to the words "to his knowledge" in Sections 5 and 16 of the main Act.
I hope that the Government will give immediate support to this stage of the Bill and its eventual passing, because it is an urgent matter. I hope the Minister will not say that this amendment should be left until the Green Paper has been considered in relation to copyright and that therefore we should await a Copy-right Bill; that might take an unconscionable time. Mr. Justice Whitford started his examination of the problem in 1973 and reported in 1977 in favour of an amendment of this kind, at a time when the matter was not very urgent. It is now urgent, and I support the Second Reading of the Bill.
§ 3.17 p.m.
§ Lord Ardwick
My Lords, my noble and learned friend Lord Elwyn-Jones intended to say a few encouraging words about the Bill, but he is indisposed and I have been brought in. I speak as a layman, but one who for a lifetime has been professionally concerned with the law concerning publication, and I acknowledge having a small interest, in that I have a few shares in a film company.
Video is something our free-spending children are more likely to possess than we are. it is an expensive toy which they use mainly for two purposes: to record favourite or promising television performances during their inevitable absences from home, or as a substitute for a visit to the cinema. They may hire a film—an ordinary commercial film which has been recorded on a video-cassette—which they can run through their home television; I am told that the cost is usually £2 or £3 a night and is cheaper than a visit to the cinema. This business is developing fast, almost like wildfire, and all is well if the maker of the cassette has properly acquired the copyright. But alongside the legitimate market has grown up, in the way the noble Lord, Lord Fletcher, described, a considerable black market in pirated films and television programmes.
It is not difficult for the pirate to get hold of a copy of a film—even a brand new film—in ways which 368 perhaps only the film companies themselves know, and from it to produce a number of cassettes and sell them to shops which will hire them out to innocent customers. Even simpler, for those who have the apparatus, is to copy, say, some old James Bond films when they are shown on television and then replicate them, because there seems to be a steady demand for these films by home-loving Bond fans. Sometimes these pirate productions are obtainable under the counter of a shop whose trade is largely legitimate. Again, as the noble Lord, Lord Fletcher, said, shopkeepers know their customers and trust them and so confide to them the pirated films. Alternatively, people who want these things can go to a backstreet trader.
Those people who patronise the illicit traders and hire the pirate cassettes are otherwise worthy citizens, unaware perhaps of copyright laws, and probably unconscious of the fact that they are hiring what are in effect stolen goods. Of course, the damage that any individual hirer does to the receipts of the victimised film producer is probably quite negligible: yet in aggregate the damage to the box office of the film producing companies can be very considerable. Indeed, I think the noble Lord, Lord Fletcher, spoke in terms of millions of pounds that are lost in this way. Of course the film makers are protected, as are the owners of other forms of copyright, but the problem is to give the film industry effective protection. The Bill makes prosecution easier, and moreover I think perhaps its main effect will be to act as a deterrent.
The Whitford Committee on Copyright and Designs Law was made aware of the problems five or six years ago, and firmly recommended that,possession in the course of trade",should be an offence. Those are almost the same words as are in this amending Bill; they are absolutely identical in sense, and in the Green Paper presented to Parliament last July the Government accepted the recommendation without reservation.
No doubt the law of copyright is in need of more radical revision when there is parliamentary time for it. But in the meantime this very simple, brief, and one would have thought, non-controversial amendment should be universally acceptable. It deserves the modicum of parliamentary time that it needs. It may, too, serve to warn innocent members of the public that though they themselves are not affected by the change in the law, least of all when they are innocently recording television programmes for their own personal and private use, yet when they hire cassettes, the makers of which cannot claim copyright on the label, they are conniving in an unfair and dishonest practice. I hope that the Government will welcome the Bill and give it whatever facilities it needs to bring it quickly into law.
§ 3.22 p.m.
§ Lord Lyell
My Lords, I am sure that the Rouse will have been most grateful to the noble Lord, Lord Fletcher, for outlining the Bill so clearly, and indeed the noble Lord can congratulate himself. I believe that we were all most interested and fascinated to hear the brief, relevant and powerfully argued speeches 369 of the noble Lord, Lord Lloyd of Kilgerran, and Lord Ardwick, who certainly amused me by what he had to say. I wondered which of the Bond villians he had in mind—Dr. No, Mr. Blofeld, the noble Lord, Lord Drax, or possibly Colonel Klebb. But the noble Lord seemed to imply that piracy of what I think he called Bond films meant that possibly there was something a little more virile, a little more healthy about queuing outside cinemas, or indeed leaving the precincts of your Lordships' House not to see the Bond films on television, but to see them in the cinema. Certainly, the remarks made by all three noble Lords who have spoken will be very carefully noted by the Government.
I should say at the outset that the Government have reservations about the original Copyright Act 1956 (Amendment) Bill. As I am sure the House will be aware, in July last year the Government published a Green Paper, which sets out what is still their current thinking across the entire field of copyright. Many proposals for legislative reform in this field were included in the Green Paper and, as is usual and customary in such cases, public comment was invited. The consultative process which was started by the Green Paper is still under way, and comments are continuing to flow in to the Department of Trade from all kinds of interested organisations and individuals. I should add that the views of the Government on the future of copyright reform will not be finalised until the full consultative process has been completed.
The Government are of course implacably opposed to piracy of copyright, and therefore they are naturally sympathetic to the broad objectives of the Bill before your Lordships this afternoon. However, the measure which the Bill would introduce is in fact only one of several which were proposed in the Green Paper to strengthen the remedies available to the owners of copyright material against the piracy of their work, and we believe that there is doubt as to its efficacy when taken alone.
In particular, we have reservations as to whether the Bill, as drafted, would meet the aims of its supporters. As I understand it, it is hoped that the Bill would apply to the showing of illicit video tapes by such people as publicans and club owners, but I am afraid that there are real doubts as to whether such people would be caught by the Bill, since they—club owners and publicans—are not necessarily in possession by way of trade. I would stress those last six words, as they are taken straight from the Bill that is before us.
There is one further difficulty. It is that there is still an unresolved question of whether computer programmes are covered by copyright legislation. This is a difficult matter which we shall want to clarify when we move to legislation on the Green Paper, but at present the law is unclear in this field, and I think that while it remains in this state we must be very careful in extending the law in any way, in particular as here, when there is a new criminal offence to be instituted. Nor do I think that this is a matter that can be clarified within the present, albeit simple, Bill, because the possible extension of copyright law to computers forms part of the Green Paper debate, and it is not yet clear that a unanimous view of this particular subject has emerged. The noble Lord, Lord Lloyd of Kilgerran, made a powerful case in support 370 of the Government's study of information technology and, above all, of its relevance to all the aspects of copyright and copyright reform; and we are very grateful to him for that support.
We are of the opinion that this particular subject, and piracy of videos and films, requires a little more detailed thought before we move to definitive legislation, and when we introduce legislation, as we shall in due course —and I hope much sooner, rather than later—we would hope to produce a series of effective measures, with effective remedies. I have to say that the present Bill does not yet come into that category, and we do not think that it is capable of amendment into a form which would be acceptable. While we have felt it important to set out our reservations at the outset, the Government nevertheless do not wish to hinder the passage of the Bill, on this very important subject, in your Lordships' House.
§ Lord Jenkins of Putney
My Lords, I wonder whether I may ask the noble Lord a question before he sits down, so that the House may be clear on it. I think the noble Lord is saying that he is ready to accept my noble friend's Bill, and I understood the noble Lord to say that the Government were also intending to bring in their own legislation—I think he said "in due course". I wonder whether he can give the House rather more specific information on that subject, and also confirm that in the meantime the Government accept my noble friend's Bill on Second Reading?
§ Lord Lyell
My Lords, I shall take the last question first. We shall not hinder the proposed legislation before your Lordships this afternoon. As I stated in my conclusions, we have reservations as to whether the Bill will achieve what we believe its supporters hope it will achieve. With regard to Government legislation on the whole question of copyright and piracy of videos, we shall introduce it once we have completed the usual process of consultation following the Green Paper.
§ Lord Fletcher
My Lords, I am grateful to the Government spokesman for what he has said and happy to think that the House will be able to proceed without a Division to a Second Reading and further consideration of this Bill. Also, I am very much in sympathy with the noble Lord's observations on the general subject of copyright. I should be the last to disagree with him in saying that the present law of copyright is in need of a great deal of amendment over and above the proposals in this modest Bill. But one has found in the legislative process over and over again that very often small though desirable reforms are hindered by the thought that much wider reforms are desirable—only to find that those wider programmes never materialise. Therefore, I am encouraged by what the noble Lord has said and happy to think that this modest Bill is able to go forward for future consideration.
§ Lord Harmar-Nicholls
My Lords, it was very uncertain guidance that the House received from my noble friend on the Front Bench. If we give this Bill a Second Reading and it goes through the whole of its courses, what would the Government have in mind—hinder or help? Would it perhaps eventually prove to 371 be some obstacle to getting the right answer? Would it be a help or hindrance? We ought to have that guidance before we support or oppose this Second Reading.
§ Lord Drumalbyn
My Lords, may I ask my noble friend whether he will give the noble Lord, Lord Fletcher, any drafting assistance on this Bill if he wishes it?
§ Lord Lyell
My Lords, may I try to answer the two questions from my noble friends Lord Harmar-Nicholls and Lord Drumalbyn. I stressed that the Government had (shall I say?) neutral feelings on this Bill. I stressed that we did not feel that it achieved entirely what we believe its supporters hoped it would achieve. I stressed to the noble Lord, Lord Jenkins of Putney, that the aims and objects of the Bill before the House this afternoon were part of a wider field of copyright reform. I said that we should bring forward legislation in due course after having taken consultations on the Green Paper. So far as the question of my noble friend Lord Drumalbyn is concerned, it is entirely for the noble Lord, Lord Fletcher, if he wishes for any assistance, to speak to the Government, when doubtless we should afford to the noble Lord all the courtesy that I hope we usually show.
§ Lord Fletcher
My Lords, I am happy with that assurance. I can assure the noble Lord now that I will avail myself of the facilities he has kindly offered.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.