§ 5.55 p.m.
§ Viscount Blakenham rose to ask Her Majesty's Government whether, in view of the problem caused to British industry by the sales of pirated copyright material, they will take immediate steps to ensure that the protection of intellectual property is accorded the highest priority on the international commercial agenda and in particular will give it prominence in the forthcoming GATT negotiations.
§ The noble Lord said: My Lords, are your Lordships aware that this country is now forgoing over £1,000 million a year in lost sales and royalties as a result of the piracy of British intellectual and industrial property in overseas markets, and that, far from its being a problem confined to certain notorious 1006 countries in the Far East, piracy is now a problem world wide? I think that a lot of noble Lords cannot have known that or they would not have left the Chamber.
§ If I describe a country where virtually every item of computer software and every film, video, book and best-selling recording is available in pirated editions, and where English language textbooks are systematically reproduced, bound, distributed and sold by commercial organisations on all university campuses, I could just as easily be talking about Turkey as Taiwan.
§ My purpose in raising this Question is not only to alert your Lordships to the seriousness of the problem but to point out to the Government why and how Britain's intellectual property can and must be protected. Before doing so, I should declare an interest in the intellectual property industry. I am chairman of the Pearson group of companies, which includes book, film and newspaper publishing interests, all of which are vulnerable to piracy. Recently I have become chairman of the United Kingdom Anti-Piracy Group, under the umbrella of the Confederation of Information Communication Industries (CICI), which represents almost the entire UK information industry.
§ Secondly, it may be helpful if I attempt to define both "intellectual property" and "piracy". "Intellectual property" is a term that covers all innovative and creative output, whether new industrial products or literary, musical or artistic works. It embraces industrial design, broadcasting, videos, computer software and electronic databases, as well as poetry, prose and paintings. As such it represents an area in which we in this country have achieved significant success and particular distinction.
§ The UK information and copyright industries provide employment for over half a million people. They have a turnover of nearly £16 billion in gross sales and contribute £6 billion in gross value added terms to the economy. That represents approximately 2½ per cent. of our gross domestic product. Patent production of course represents an even larger part of the economy, but it is copyright products with which I am primarily concerned today.
§ "Piracy" is quite simply the reproduction of protected intellectual property without the consent of the rights holder. Unfortunately, one common feature of intellectual property is that its origination costs are disproportionately high in relation to reproduction costs. The consequence of that is that a work can be reproduced very cheaply if the origination costs and the royalties owed to the creator are not paid. To some extent this has always been true, but intellectual property has become far more vulnerable in recent years as a result of the wide dissemination of low-cost reproduction equipment such as offset printing presses, photo-copying machines, audio cassettes and video recorders.
§ How many times have we heard it said that the British are good at inventing products but allow others to develop them? Part of the problem may be that we do not market our ideas as successfully as we should, but neither do we always secure the protection for them in other countries that would enable us fully to benefit from the investment that we have made. It is 1007 the proper exploitation through legitimate sales that earns the returns to pay for the investment of skills and money in the original product and for developing new products in the future. That is important. It is in information and invention that Britain has particular skills which will be the basis of our future economic growth and an increasingly large part of our whole economy, yet it is that which is being increasingly being put at risk by piracy.
§ The industries affected by piracy have been particularly hard working in protecting their interests by investigation, litigation and negotiation. It was action in Singapore by the British and United States industries, including expensive legal action, which led to the Singapore Government's welcome intention to introduce new copyright legislation and to extend its protection to British works. Similar progress is being made in Taiwan, but there is a limit to what individual companies and industries can do. For instance, they can only take legal action in countries where there is a law that protects their products, and even where there is legislation, litigation may be pointless if the sanctions are likely to be too feeble to constitute any sort of proper deterrent. Action is needed at government level. The important interests at stake demand a co-ordinated policy by Her Majesty's Government.
§ In the past, the Government have persisted in regarding the issue of intellectual property protection as a technical and legalistic problem rather than the vital trade issue that it is. The standard response to requests for Government action against piracy has been to ask for evidence of the scale of the problem. Evidence is the soft underbelly of piracy allegations because it is so hard to come by. Pirates do not keep accounts or, if they do, they do not publish them. However, the anti-piracy group has recently compiled a report entitled International Piracy—the Threat to the British Copyright Industries, which sets out the position for just two industries in only eight territories. In those eight territories alone, the publishing and recording industries are foregoing at least £.158 million per year in lost sales. The report details preventive measures taken by the copyright industries and requests specific action by the Government.
§ The Department of Trade and Industry has agreed to study that report and to respond to it and there has been, I am glad to say, a discernible improvement in the Government's readiness to respond to calls for assistance. We very much welcome, for instance, the Prime Minister's undertaking to raise the issue in her recent talks with President Chun Doo Hwan in Korea. But a willingness on the part of government Ministers to raise that issue directly and forcefully in bilateral talks with offending governments, while essential if the governments involved are to be convinced that the United Kingdom attaches real importance to the matter, is only one of the options open to the Government.
§ The Government must have a coherent and constructive policy and should not limit their activities to reacting on a case-by-case basis. The defence of our intellectual property is of such importance to our trade and to our future economy that it must be given a far higher priority on the international commercial 1008 agenda, and the best place to start is the forthcoming GATT negotiations. GATT remains the principal international organisation concerned with substantive issues of trade policy and is the international organisation best placed to enforce and reinforce international protection, yet the British Government have shown a reluctance to widen the scope of GATT to include the basic protection of intellectual property for fear of overburdening it.
§ The Government have indicated that they prefer to leave international enforcement to the United Nations agencies, the World Intellectual Property Organisation in Geneva and UNESCO in Paris, which have the job of administering the international conventions. I am sure that they do it very well, but they do not have any sanctions to enforce protection. We are talking about international trade and there is no reason why countries should enjoy trade preference without giving proper internationally accepted protection to the trade in intellectual property of their trading partners.
§ To be fair, the Government are, according to their recent White Paper, prepared to support a GATT code against counterfeiting to enable customs authorities to take action against counterfeit imports bearing an unauthorised trade mark, but that does not cover the piracy of intellectual property in general and is only scratching the surface of what is a major international scandal. We are dealing with theft on a grand scale.
It is generally recognised that this country's economy will increasingly be innovation- and information-based. It is time the Government shifted their priorities accordingly. If they decide to do so, they will be doing no more than following the example set by current United States Government policy on that issue. Mr. Clayton Yeutter, the United States trade representative (the equivalent of our Minister for Trade) announced last month that the Reagan Administration would:
seek to conclude, in the new GATT round of multilateral trade negotiations, an enforceable multilateral trade agreement against trade-distorting practices arising from inadequate national protection of intellectual properties".
Unfortunately, Her Majesty's Government seemed disinclined to follow that important lead and hence my question today.
§ The Americans are our chief competitors in the intellectual property market and our sound recording and book publishing industries at least are competing very successfully with theirs. The United States Government clearly appreciate the importance of protecting their intellectual property industry. Is it not time for Her Majesty's Government to accord the issue a similar priority and to demonstrate that by clear, unequivocal action, particularly in the important GATT round starting this autumn?
§ 6.10 p.m.
§ Lord Jenkins of Putney
My Lords, I should like to congratulate the noble Viscount on raising this important Question. Most people are, I believe, aware of the revolutions that have changed the nature of our society. Most people are conscious of what the internal combustion engine has done to us. Most people are ready to talk about Caxton. But what is not generally realised is the extraordinary changes that have taken place as a result of the capacity to reproduce in 1009 quantity written material and other material, and also the consequences of the capacity, by mechanical or electronics means, to reproduce human performance—musical performance and other forms of performance. This has had a most profound effect upon the nature of our society. At one time, even when I was young, the possibility of producing 100 copies of something that was written was completely out of the question. Now, millions of copies are produced all over the world.
The same applies to the question of performance, in which I am particularly interested because of my long association with the British Actors' Equity Association. It has been an amazing revolution. At one time, in order to enjoy the process of communication, the performer had to appear in the same building as the audience. The numbers of people were relatively comparable. There were perhaps 10 peformers or, with an orchestra, maybe 100, on stage and about 1,000 or possibly up to a maximum of 3,000 in the auditorium. Now, through the means of gramophone recordings—the first example of mechanical reproduction—the performance is reproduced, repeated and so forth.
My interest arises not only in relation to copyright, although that is important, but also in relation to contract. We have had to look afresh at the whole problem of copyright in terms of the author and of performers. Your Lordships will be well aware that some performances are even more important than the object that is performed, whether this relates to a book, a play, or television. The performer is directly concerned. It affects him in relation to copyright and in relation to contract. He makes a contract with the original purchaser of his performance, perhaps the BBC, which says that it will pay him so much for televising, for sound radio, for reproducing, or whatever it may be, and that if it is done on further occasions or transmitted elsewhere in the world, he will be paid further sums. However, should the performance be pirated, the performer will see no further sums. Obviously, if a performance is taken off in another country and reproduced there without any remuneration to the original producer in this country, the original producer has no liability whatever; nor can he be expected to pay any further remuneration to the performer.
This is, therefore, a matter that concerns all of us, not only those who are concerned with the business of providing art or entertainment, but also those involved in the reception of art and entertainment or the experience of art and entertainment. If we find, in the kind of world in which we live, that pirating becomes the norm, this must, in the long run, depreciate the quality of the original object. It cannot possibly be avoided. It is therefore important to the entrepreneur and to the conveyer, to the artist, to the musician and to the actor, that there shall be some integrity in the whole process. That is what has been lost. Not primarily in this country, although it has, to some extent, been lost here, too, but over the entire globe a situation has arisen requiring some action to be taken to try to introduce some rationality.
I have received a letter for which I am, I suppose, responsible in part, although it could also be attributed 1010 to suggestions of your Lordships that I should take an interest in these matters, from the Confederation of Information Communication Industries. The noble Viscount is, I believe, chairman of its anti-piracy group. The organisation seems to me to consist largely of producers. I want to suggest to the noble Viscount that it might be a good idea for him to approach the organisations of writers, performers, and so forth in order to establish a common front in this area. It seems to me that those, as I have tried to suggest, who are concerned in the actual job are just as much involved as those who are producing. I believe that there would be a perception among performers' unions and writers' organisations that they have a common interest.
It is difficult to find the right word. The word "intellectual" frightens people in this country terribly. It is rejected almost as firmly as the world "culture", I once wrote a book which I mistakenly called The Culture Gap. It created a record in failing to sell. All that I can tell your Lordships is that it is still in print; so there is still hope. But the notion of information really does not convey the whole story. The notion of intellectual property is a little off-putting. One has to find the right approach to this problem if there is to be the depth and width of appreciation and support that it clearly deserves.
I have little interest these days in newspapers. They seem to me to have declined horribly, so that they are no longer entitled to the name "fourth estate" or any other estate. I am, however, concerned with books and with films. I am even concerned with video. That does not necessarily have to be a video nasty. Such organisations, concerned with this revolution, are entitled to receive from the Government an interest that I do not want to suggest that they have failed to receive. The noble Viscount is, however, entitled to make the point that the interest expressed by the Government in their own document, which, I think, is a good one, needs to be supported by more in the way of action. That is, I believe, what the noble Viscount is calling for. I support him in that call. I hope that we shall receive from the Government this evening the sort of answer that will persuade us that they are taking the matter as seriously as it deserves to be taken.
§ 6.18 p.m.
§ Lord Lloyd of Kilgerran
My Lords, I wish to join in congratulating the noble Viscount, Lord Blakenham, on raising this important matter. The noble Viscount has made a realistic, valuable and important speech, in a wide international context clearly pointing out the problems for British industry and the United Kingdom economy caused by this scandalous and ruthless international piracy. I agree that the noble Viscount summed up the position of the Government very clearly and in happy phraseology when he indicated, if I recall his words correctly, that the Government have hitherto dealt with the matter by taking a technical and legalistic view instead of treating it as a vital trade matter.
Before joining the noble Viscount in throwing a few small pebbles at the Government, I should like to congratulate the Government on certain generalisations to be found in the White Paper, Intellectual Property and Innovation. At paragraph 1.12 on page 7 the Government state: 1011The Government therefore intends that a higher priority and profile should be given to publicising the value of intellectual property".Sometimes I share with the noble Lord, Lord Jenkins of Putney, the associations with the word "intellectual". It used to be called "industrial property" covering patents, trade marks, designs, know-how and copyright. But this became rather mixed up with the law for building factories and other buildings. It was therefore decided to set up a world intellectual property organisation, known as WIPO. I think that "intellectual property" is quite a good name for property based on ideas, as this is.
At this stage I ought to declare an interest. For the whole of my adult life I have been concerned internationally at the Bar with nothing but intellectual property in its widest sense. I am so glad to see an old protagonist of mine, the noble Lord, Lord Cawley, in his place in the Chamber tonight. I do not practise in the courts, but I have a great interest internationally in the problem raised by this kind of piracy.
If one looks at the opening paragraph of this White Paper it would appear that the Government are again inclined to deal with the problems in a narrow and legalistic way without considering how important it is for trade. Paragraph 1 states:Intellectual property is about creative ideas … Widespread dissemination of these ideas benefits society as a whole and stimulates further creative activity. However, once ideas have been made public they can be copied by others, so that if their originators are to control and obtain remuneration from their use they can only do so within a secure legal framework which creates property rights in those ideas".That is not sufficient with regard to the subject which we are discussing this evening. It is not merely a legal framework that is necessary. However, as the title to this debate indicates, the matter should be put on an international agenda.
As the noble Viscount said, the GATT discussions by the Government should be accompanied by a forceful approach on this question of copyright, as well as counterfeiting in relation to trade marks. There is this world international property organisation, known as WIPO, which is much concerned with patent and trade mark law, but not so much with copyright. Although attempts were being made at meetings of WIPO recently to extend its international functions, having regard to this piracy, the reports which I have received of recent meetings do not encourage me to think that very much will come from that quarter for at least some time.
It seems to me that it is necessary to have firm diplomacy. The Government must act in the way I believe the Prime Minister acted on the recent visit abroad to which the noble Viscount referred. Firm diplomacy is necessary at government level in view of the extent of this piracy. It is necessary for the Government to raise these matters forcefully in the EC, not only in the context of some directives—to which I shall refer later—but generally in the spirit and within the scope of competition law, of which I have had considerable experience during these last 25 years.
In my view the Government should press for proper laws to protect the rights of British industry in this country and abroad. They should put diplomatic pressure on governments both bilaterally and through 1012 organs such as the EC. There is now an EC regulation which provides for concerted action against illicit trade practices. The Government should join their EC partners in exploring the possibility of using this against the worst offenders. I understand that an action has been taken by an individual organisation in this country, but it is necessary under the EC rules, in order to make the attack more formidable, to join with a member state. I understand that an organisation known as the International Federation of Phonogram and Videogram Producers (known as IFPI) wrote to the Minister some time ago in respect of this matter. I gave notice only a couple of hours before this debate that I shall ask the Minister to make some comments about that memorandum during the couse of his reply or at a later stage.
I do not want to take up the time of the House this evening in amplifying the important matters so ably and coherently summarised by the noble Viscount in introducing this matter. Apart from a legal framework, to which the Government refer in the White Paper, what is required is a firm diplomatic effort by the Government to stop an international scandal. I would respectfully suggest that there is such an opportunity within the context of the EC, with the directives which are now being discussed. I understand that there is a regulation on counterfeiting under consideration by the Council of Ministers, and that should include copyright. I strongly support the matters raised by the noble Viscount in his speech.
§ 6.27 p.m.
§ The Earl of Arran
My Lords, you will probably by now appreciate that piracy is not dead, for although the traditional form of maritime piracy has gradually faded as this century has progressed, a new form of piracy called publishing piracy has now sprung up to take its place. As yet, and as far as we know, flashing sabres in the hands of ferocious swashbucklers are not in order, but the loot, the treasure, is—even allowing for inflation—just as great and is most certainly much easier to come by. Perhaps at this juncture I should decare an interest, not—your Lordships will be relieved to learn—one of a piratical nature, but rather as a director of a United Kingdom bookselling organisation.
In my maiden speech, not all that long ago, I talked of another form of publishing piracy which at that time was strongly rumoured to be an evil glint in the Chancellor's eye; that of a possible value added tax on books. With immense relief to the industry that was eventually scuppered. We now have to scupper another. This form of piracy, however, is altogether different since it is very distant from our shores and is dependent upon the ability of Her Majesty's Government to persuade, gently to coerce, and to cajole foreign governments to legislate and prosecute these publishing pimps.
The British book publishing industry lies immediately behind the United States publishing industry in size and thus it is the second largest publishing industry in the world. It contributes £1.95 billion to the economy and employs 45,000 people. Such figures alone—and not even allowing for the enormous value of the knowledge and culture it imparts—must surely demonstrate its importance to 1013 this economy. But that industry is being raided and, moreover, its profits eroded by pirates who, with scant regard for who owns the copyright, mass produce hundreds of millions of books each year. The industry is raided by plunderers whose profits from each book can amount to some 70 per cent. of the retail price, while the average profit of the United Kingdom equivalent is a mere 10 per cent. There is up to 70 per cent. profit for someone who only has to buy one book, copy it and reproduce it by as many times as he thinks the market will stand. There is up to 70 per cent. profit for someone who has only had to copy, to reproduce all the talent, all the skill, all the capital investment and all the risk that the originator, the British publisher, has had to put into his publication. In every sense is it not a pretty cheap way of making money?
So, too, is their defiant defence pretty cheap. They say, "Our work is in the national interest", and setting themselves up as some type of self-styled Robin Hood they go on to say, "We provide cheap books for those who cannot afford the West's prices". Tell that to the authors and publishers whose works litter the pavement outside the Regal Cinema in New Delhi—works all aped and worth not one penny of income to either author or publisher in this country.
I mention India since the pirates in many of the countries in South-East Asia actually export these unlicensed copies of books into vital British markets. Such pirated books have been found in India, China, Indonesia, the Middle East, Nigeria and East Africa. Now in Pakistan, whereas 20 years ago there was a thriving British publishing presence, today only one publisher remains—Oxford University Press.
Publishers are losing many millions of pounds of revenue each year which could be used for publishing more books. However, it should be realised that this piratical damage is not only restricted to developed countries but is also to be found in developing countries. What incentive is there, for instance, for a Pakistani publisher to publish a student's textbook by a local author when, if it is of any merit, it will be pirated or, at the least, will almost certainly have to compete with cheaper pirated editions of foreign bestsellers? Moreover, piracy may very easily place badly printed medical textbooks into the hands of students, and in so doing will probably stifle and indeed kill off local and indigenous books thereby ensuring that students are exposed only to foreign ideas and alien cultures. What irony!
I believe that it would try your Lordships' patience to continue to give more examples of these piratical practices across South-East Asia. Suffice it to say that not only do they exist in frightening numbers, but they are also on the increase. Unless, therefore, there is concerted and speedy action by the West, the risk we run is that this monstrous unfairness will continue and in so doing will allow these publishing plunderers to assume the mantle of respectable Mafia. That must never be the case.
Happily, however, I understand that, while Western legislative forces are already on the march, the United States is still very much the forerunner as regards the bold and positive moves it is making. I know that the British Government are increasingly concerned, but I 1014 have the feeling that at times the arguments are found to be somewhat dull and arid. Therefore, I really urge my noble friend the Minister and the Government to take an even longer and harder look at what can be done to increase the help we already give to our allies.
We need at all times to give our friends from the brave new world our help and moral support whether it be in endeavouring to deter acts of aggression by hostile nations or, as in these commercial circumstances, in helping them to scupper this armada of publishing pirates.
§ 6.35 p.m.
§ Lord Hardinge of Penshurst
My Lords, I know that we are all grateful to my noble friend Lord Blakenham for raising this very important subject. I must declare an interest. I earn my living as an employee of a major UK book publishing company. I shall make this brief. I have read quite a lot of papers on this subject, as I am sure other noble Lords have done. The worst that one can say of this form of commercial lobbying is that it has produced a most horrific crop of acronyms.
A recurring theme in these documents is an exhortation to the Government to do something: higher priority is to be given to the protection of intellectual property; protection is to be introduced as a result of bilateral talks, and so on. I do not denigrate or underrate those possibilities, but they can have only long term results. In the near future they are not likely to do much to discourage the entrepreneur in India or Korea or wherever who happens to have a modest photo-litho plant at his disposal. He will go on copying our books until somebody stops him.
There was one point in the documents that struck me as interesting, and that is really the subject of my intervention. I note from the documents that the only people who have actually achieved anything as regards this particular problem are the Americans, to whom my noble friend Lord Arran referred.
Some think that the agreements which they have obtained, or are in the process of obtaining, will not necessarily be to the advantage of UK publishers. Of course we all understand the danger—the danger that they will obtain terms not necessarily profitable to publishers who are not themselves American. However, I think that we should regard American results in this field as an extension of the pax Americana, and that some type of order is preferable to anarchy and theft.
I now come to the methods that the Americans are using to obtain results. With your Lordships' leave, I shall read two extracts from the documents to which I referred earlier. The first has the acronym CICI and comes from their 1986 survey, Section 3, paragraph 4. It reads:US Government influence at a high level and the threat to remove the general system of preference (GSP) trade benefits and initiate punitive '301' actions under the US Trade Act were undoubtedly main factors in the Singapore and Taiwan Governments' belated decision to give attention to the problemI imagine that there is scarcely one of your Lordships who is not familiar with the punitive Section 301 and its detailed provisions. However, I had to learn its meaning two days ago from a paper called Anti-Piracy News, from which, with your Lordships' permission, I shall quote the following extract: 1015Section 301 empowers the US Administration to take retaliatory trade action if a foreign government fails to correct unfair trade practices that discriminate againt US products. In this case the administration has threatened to stop the importation of Korean cars to the United States if the Koreans do not take adequate measures to protect US intellectual property by October 1986.".So that is what the Americans are doing, and it seems to me to be the only thing likely to work in the short term.
This is not the time or place for any kind of discussion about protectionism. In any case, I lack the knowledge to judge whether we should or could follow the American example. I support the wording and intention of this Question. This is the very least that the Government can do, and I hope that they will go ahead and do it.
§ 6.39 p.m.
The Viscount of Falkland
My Lords, I too should like to thank the noble Viscount, Lord Blakenham, for allowing us the opportunity to air our views on this subject. I also very much agreed with the noble Lord, Lord Jenkins, in his summary of the history leading up to the position that we have today, where copying has become such an enormous growth industry. As the noble Earl, Lord Arran, said, it has become so easy to make cheap money. It has grown to such proportions in the record industry and the video industry that I should like to confine my remarks—and I am happy to say that I shall be brief—to those two areas and to ask the noble Lord the Minister whether, in his reply, he can give answers to two specific points as regards each area.
In the record industry the owners of copyright are losing approximately £70 million a year. This is growing as the technology improves. It is a fact of this particular business that the reproducing technology of pirates grows apace with the technology of the hardware and of the other technology which goes into producing the legitimate article. We are losing £70 million in the record industry. The Government in their White Paper—which is an excellently written document and full of interesting and encouraging remarks; and it also goes a long way to drawing the public's attention to this matter—have now taken to the idea of the levy. The levy is something we discussed in your Lordships' House during the Films Bill: the wisdom or practicality of a levy on video tapes.
A levy on blank tape for recording is a good idea and a bad idea. There is no doubt that it will inhibit some people, and it will produce some revenue for those people who would lose from their copyright being infringed. But are we not here—and I ask the Minister to comment on this—in a way legitimising copying by producing a levy? When you have paid for a tape with a levy, have you not in fact paid the price to copy? Are you not then encouraging not just the small back-street man who reproduces in his spare time and goes out to Camden Market at the weekend and sells on a trestle table, but also the rather larger organisations to go into the business of copying because there is a new legitimacy about it? That is something which strikes me as a possibility. Current estimates in the record industry are that after the levy about £6 million will be clawed back through this levy. That is an enormous shortfall from the £70 million which it is estimated is being lost at the present time, and which is growing.
1016 The other question I should like to ask the Minister on the subject of the piracy of records is whether it is possible nowadays to persuade hardware manufacturers—and I am aware that most hardware manufacturers are unfortunately not British; this is a part of the decline of our British industry which has gone overseas, mostly to the Far East because the technology is there to be used—like car manufacturers, to bring their equipment to the specification that we require, which would make it impossible for duplication to take place.
I am told that it is perfectly possible with chip technology to have tapes and hardware matching in such a way, with certain quite cheap components, as to make it impossible for reproduction to take place. I am aware that there is a difficulty here in compelling hardware manufacturers to follow this line, because they have an enormous market in the illegitimate trade. It is really a case of, should one industry benefit to the detriment of another? There is something which needs to be explored here.
I do not find in the White Paper—and I have read it cursorily—and I have not heard in discussion any views on this matter. It would be an important departure for us, and it may well enable us to take a lead in Europe in encouraging a uniform kind of practice to bring together the interests of the hardware manufacturer and the artist and the intellectual side. That is all I have to say on records.
Videos are another huge industry, and we discussed this matter during the Films Bill. It is possible for people to hire a video, fill a room and watch it, and copy it and show it to more people. I do not think that anybody is going to chase somebody who does that. What is needed is some kind of brake on the people who do this for reward; who create a business out of doing it; and it is a growing business. The Copyright Amendment Act 1983 may have something to do with the fact that a lot of the work done in chasing people who illegally reproduce videos is now being done by an ex-head of the terrorist squad. Since 1983 there has been a reduction, so I am told, from losses of £100 million down to about £45 million. That is significant. That has been done because the police were given powers under that Act. Usually where you find the duplication of video recordings you find that pornography is involved, though not always. Under the new powers that the police have to get search warrants since 1983 they have had 300 uses of search warrants with 95 per cent. prosecutions.
That leads me to another question I should like to ask the noble Lord the Minister relating to the White Paper under the heading "Remedies". Under "Remedies" there is a lucid and clear account of what happens in civil actions against infringements of copyright. What is now inhibiting the police in a criminal action when they pursue somebody who has been illegally running a business duplicating video recordings—and I wish I had had a chance (I was quite late in the House) to consult my noble friend Lord Lloyd on this, because he might have been able to give me the answer—is that it is so much more difficult under criminal law to prove copyright. This has inhibited a lot of the prosecutions that have taken place.
1017 As I understand it, you need primary evidence. It does not matter whether the film is obviously a film made by Lucas or Spielberg, or whoever; when you get into the criminal court you have to produce the kind of evidence which requires Mr. Spielberg, or Mr. Lucas, or whoever, to produce that evidence. That seems to be extremely cumbersome and quite a brake on prosecutions under the criminal law of people who are doing good business and making easy money, as has been said by a noble Lord, out of this particular business.
Those are the only two points I should like to make. I should also like to tag on to this, because it has just occurred to me, that in this country we have the boom technology in the new compact disc industry to create an important new manufacturing boom in that area. I know that the people who are interested in producing compact discs, which would employ quite a number of people, are not prepared to do so because of the likelihood of Japanese equipment being imported into this country using digital tape, which is solely for the use of copying. It can have no other use.
It is highly efficient equipment. I have not heard it myself, but I am told that if you have access to a compact disc player for an evening and you have this machinery from Japan, you can reproduce any amount of compact discs with exactly the same quality. There is no decrease in quality. Therefore the opportunities for the pirate are obvious. This is inhibiting potential manufacturers in this country from investing in this kind of enterprise. What is the point of their doing that if the pirates are going to come in and make their business less profitable then it may have been?
To sum up, it is a terrifying business, and it is growing. I am grateful to the Government for producing a clear White Paper and I hope that some teeth can now be given to legislation.
§ 6.50 p.m.
Lord Bruce of Donington
My Lords, we on this side of the House are most grateful to the noble Viscount, Lord Blakenham, for having introduced this particular debate. As has been said, the term "intellectual property rights" is a dehumanised expression which does not readily attract public sympathy. This evening there have been some most interesting and constructive contributions, and these have covered, quite properly, the interests of the publishers, the interests (in the case of the acting profession) of the performers, and indeed some reference has been made to authors. All of these have been most adequately covered and, with your Lordships' permission, I should like to narrow it down still further and deal with the position of the authors.
It is the authors of these pirated works, particularly in the publishing field, who are the most vital factor of all in our country. It is the work of the authors and inventors of new ideas which sooner or later has to be reduced to writing or to diagrams or to sketches that lies fundamentally at the root of all the progress that we make as a society; and, somewhat characteristically, of course, in the perverse way in which rotten societies develop, it is precisely these people—the people who have creative force, creative ideas which 1018 they try to articulate or draw and convey—who get the least reward of all.
It is on these, the creative people of our population, sometimes referred to contemptuously as "intellectuals", that the whole basis of creative movement and progress in all spheres of our society is founded. Authors, it is well known, are remunerated largely by royalties on the percentage of their works that are sold. Therefore any diminution in their circulation, particularly by theft (which is what piracy amounts to) immediately has a very adverse effect upon them. Whether in the field of design, biology, immunology, physics or chemistry; whether in the field of medicine; whether in ordinary or electronic engineering, inventors are generally ordinary individuals. It is this particular creative segment of our society that dedicates itself not always, I fear, to profit—because some people in our society have as a principal aim not the accumulation of wealth—but to leaving its country a little better placed after its members have died than when they entered it.
This is the idealism, the purpose and the dedication that lies particularly behind technical writers, writers of new treatises, writers of learned articles, writers restlessly using their brains to explore their new ideas for advancement. These people are sometimes employed by large firms and therefore do this work in their spare time only. Some of them work on their own on a particular subject of interest. But, apart from those who achieve very great eminence, perhaps by accident and sometimes with the aid of patronage, most of them in one year can look forward to an income—an income earned by a technical publication which advances knowledge and learning and progress in their own field—well under the amount that they would receive per annum if they were unemployed.
This is a very depressing fact. I very often wonder whether, when we see some technical work in an area in which we may perhaps have only a very general knowledge, we realise the work that the author has to put in in order to produce, shall we say?, between 3,000 and 10,000 words on the particular subject in which he is seeking to make progress, in which he is seeking to obtain recognition and seeking further to advance in the field of his own particular subject. There are hours and hours spent in research, all at his own expense. There is the search through libraries, there is the writing to other authors whose minds have been working in the same way. Fortunately, these days, although not without expense, those who have access to computer outlets can get their works of reference readily referred to them by getting on to one of the information networks. But still all the works have to be read and after that the ideas have to be formulated.
Even Members of Her Majesty's Government, I believe, occasionally have unto themselves what is called "think time", the time when perhaps they are observed to look vacantly into space and when people think that they are doing nothing but when, in fact, they are exercising their brains on the information they have at their disposal in order that they can further the purposes that they have in mind. Authors work very hard indeed. I am well aware that, particularly in the fiction field, the prospects of success are very often a little greater in monetary terms; although 1019 the amounts gained by best-sellers—unless the author happens to be a person like the present vice-chairman of the Conservative Party—are not all that great.
The question is how much do we value this activity? No one is asking—and I am not venturing to ask this afternoon and I have no interest to declare—that they should get a greater percentage royalty from their publishers. I am bound to say that although I have no personal knowledge of the firms of publishers that are represented here this afternoon, distinguished as they may be, I know that publishers also have a very strong sense of public spirit. There are many small publishers known to me who publish works in the foreknowledge that they are for the advancement of science and the advancement of knowledge, and that their prospects of obtaining a vast and profitable circulation are small. Therefore, I should like to pay tribute to the publishing profession as a whole, which, by and large, carries out its functions in the United Kingdom with a far greater degree of scruple than I could observe in many other departments of industry, commerce and finance at this time. But I am still concerned with the author.
What can the Government do about this situation? What has been suggested in essence this afternoon is that the Government should put some punch behind their approaches to other countries in this matter similar to the kind of punch that has been put (and it was referred to by the noble Lord, Lord Hardinge) in regard to the action of the Singapore pirates.
The difficulty is that authors have no lobby. I do not want to be too unkind to Her Majesty's Government in this matter, and what I have to say goes for past Governments of a different political persuasion also; but there is a tendency in politics and a tendency in government to pay heed only when the very large concerns make protest to the Government. For example, I shall quote now from a small piece in the Daily Telegraph which appeared as recently as 3rd May:Pressure on the Japanese to open up the Tokyo Stock Market to British banks wishing to trade shares on a world basis will be paramount for Mrs. Thatcher and Nigel Lawson, the Chancellor, during the Tokyo summit".I can understand that: bankers and large and powerful industrial interests have a ready access to Governments—not only to this Government but to previous Governments—and Governments tend to pay attention to the big lobbies, who are virtually free, through their leaders, even to visit Downing Street from time to time. The Government pay heed to the big battalions in the City and to what remains of British industry, and certainly to British agriculture.
What we now require is a slight change of direction and the development of a different set of values so that those who derive their income mainly from the buying and selling of debt or the buying and selling of equity investments in property—the great casino—who have so far had so much preference, not only in this Government but in other Governments, too, should take it on board that if they are to act in the national interest as such, which it is their duty to do, then they really must protect those creators of new ideas that lie at the whole basis of the British economy itself.
We do not want to be told, as we are so often told, that these matters are under constant review. We do 1020 not want to be told that a high priority is being given to their consideration. What we want is an indication of some action, and I should like to ask the noble Lord who is to reply to answer specifically the following question. In answer to a question on 10th December in another place Mr. Geoffrey Pattie, in referring to the report to which the noble Viscount, Lord Blakenham, referred this afternoon, said this at col. 558:I am concerned that our support should be as effective as possible and we shall be looking at ways in which it might be made more so.That was five months ago. I want to know, after looking into the report which has been referred to this afternoon and which has been furnished to the Ministry, after five months, precisely what the Government are going to do about it.
§ 7.6 p.m.
§ Lord Brabazon of Tara
My Lords, I should like to join other noble Lords in thanking my noble friend Lord Blakenham for raising this important issue today. He and others, particularly my noble friend Lord Arran, have spoken graphically of the damage done to United Kingdom intellectual property industries, particularly the publishing and record industry, through piracy of copyright material in overseas markets.
Since pirates and counterfeiters do not publish statistics, it is impossible to be entirely certain of the scale of this problem, and all estimates must to a degree be a matter of informed guesswork. Nonetheless, the Government fully accept that that copyright piracy, along with the allied scourge of counterfeiting of branded and trade-marked products, are real, widespread and increasing problems. I can assure the House that the Government take both problems very seriously. I congratulate my noble friend on the work of the Anti-Piracy Group, of which he is chairman, in bringing together the available information in their excellent report International Piracy—the threat to the British copyright industries. The detailed studies they have made of copyright piracy in eight countries where the problem is at its most intractable are extremely valuable. As my noble friend told the House, my honourable friend the Minister for Industry and Information Technology is currently looking into ways in which the Government might strengthen their support for industry on this issue, and is studying the proposals in the report carefully.
The House will recall that within the frontiers of the United Kingdom itself the problem of video and audio piracy has been largely brought under control by the Copyright Act 1956 (Amendment) Act 1982 and the Copyright (Amendment) Act 1983, and we hope that the Copyright (Computer Software) Amendment Act 1985 will do the same for the emerging problem of computer software piracy. In addition, as noble Lords have reminded us, in April the Government published a White Paper, Intellectual Property and Innovation, which contains proposals for the reform of United Kingdom copyright law. I am grateful to the noble Lord, Lord Lloyd of Kilgerran, for his kind words on this subject, and I listened to his criticisms with interest.
Among the proposals are those to extend to all categories of copyright material the increased penalties 1021 for copyright infringement which were introduced in relation to video, audio and software piracy in the enactments I have just mentioned. Powers to obtain search warrants in respect of criminal offences will be similarly extended, and the criminal offence of knowingly being in possession of infringing copies by way of trade will likewise be extended to all categories of copyright material. Further provisions will be included to ameliorate the difficulty faced by copyright owners when a defendant in an infringement case makes an unreasonable challenge to the presumptions as to subsistence and ownership of copyright.
I note the points made by the noble Viscount, Lord Falkland, about the blank tape levy and the difficulties of proof in domestic criminal actions. I would, however, this evening prefer to concentrate on the subject of this debate, on the activities of international commercial pirates rather than on the domestic legal system. I would simply say that our proposals in the White Paper were arrived at after much detalied consideration and have been broadly welcomed by copyright owners. The measures proposed in the White Paper and those already in force are, however, of little direct help to British exports of books, videos, sound recordings and software; to the performers whom the noble Lord, Lord Jenkins, mentioned; or indeed, to the authors to whom the noble Lord, Lord Bruce of Donington, referred. However, I do believe that they will have some value as a model to other countries of the legislative package required to get this problem under control. Exporters must rely on the copyright laws of the importing country to fight any piracy of their material which occurs locally.
A large number of countries throughout the world recognise the damage to creativity caused by piracy and give substance to that recognition by adhering to one or more of the main international copyright conventions, such as the Berne Convention or the Universal Copyright Convention. A central feature of these conventions is that in addition to binding their member states to provide a certain minimum level of protection they require that these states make that protection available within their territory not only to works of their own nationals but also to works of nationals of any other member state.
It has been said, however, that in a minority of cases even adherence to the conventions does not guarantee that a copyright work is safe from piracy. Protection may be available under local law in theory, but in practice legal procedures may be bureaucratic and ineffective and penalties inadequate. More serious is that group of countries, mainly in the Far East, which do not belong to the conventions and which, by failing to protect foreign works, allow piracy to flourish, not merely for local consumption but for exports.
Developing countries sometimes contend that unauthorised reproduction of copyright material is justified because the price of text books is high. This is an unreasonable and unfair argument, because it does not take account of the extra expenses borne by publishers in the original publication of their editions. Furthermore, it does not take account of the willingness of most British publishers to make cheaper editions of their works available to developing 1022 countries and to offer advantageous licensing terms to local printers.
But, in any case, although educational works are often a significant target for piracy, a large proportion of the copyright material pirated throughout the world is not for the educational market at all. It is straightforward entertainment works of various kinds—popular music on record or cassette, feature films and popular novels. No country can reasonably defend the pirating of intellectual property of this sort in the name of education or on any other footing. It is, as most noble Lords have said, quite simply, a form of theft, and the absence in some countries of legal rights protecting foreign works or performers does not render it any less so.
The task we face is how to bring about the adoption of comprehensive and enforceable copyright and allied law in those countries which lack it, and improvement of the law where, as is too often the case, rights are inadequate or not available to foreigners, enforcement procedures are unwieldy and penalties for piracy insufficient to deter. This evening's debate has focused on the possible scope for use of trade weapons, and the role of trade agreements, in pursuing this objective, and I shall address myself to this aspect first.
The United Kingdom is active in a number of fields: as a signatory to the General Agreement on Tariffs and Trade and as a member of the European Community, and also within the World Intellectual Property Organisation (WIPO), which alone, or jointly with UNESCO and the International Labour Organisation, provides the secretariat for the main international conventions in the field of intellectual property. In the forthcoming GATT round of multilateral trade negotiations, we hope to be even more active, and to achieve finally some of the very elusive objectives that developed countries have been pursuing in this field since the 1970s.
Much has been said in debate outside, and indeed in your Lordships' House this evening, about the need to make progress in the forthcoming GATT negotiations. We agree, and my noble friend Lord Blakenham and others I hope will be pleased to note that at last month's ministerial-level meeting of OECD countries it was agreed, in the words of the final press communiqué, that the new round should address trade-related aspects of intellectual property rights. The question of quite what aspects are trade-related and of how to address them, falls to be answered in the GATT Preparatory Committee now at work in Geneva. But it will be heartening to all those eager to strengthen the protection of intellectual property rights overseas to have this clear and united declaration of the industrial countries' commitment to this objective. I hope it will encourage the noble Lord, Lord Bruce of Donington, to know that this was endorsed once more at the Tokyo summit.
Work in GATT is already under way. The UK, our Community partners and the US have all been pressing since the Tokyo round for agreement on a code designed to restrict international trade in goods that infringe registered trade marks. The proposed code would require other countries' customs authorities to impound suspected counterfeits giving the trade mark owner the opportunity to take effective 1023 legal action. As those who follow the subject closely will know, developing countries have opposed them very firmly, arguing that GATT is not competent to make rules on issues affecting intellectual property, even on trade-related issues in that field. But the argument about competence is a cover for these countries' very different commercial objectives.
It is one of the United Kingdom's high priorities in the new round finally to overcome those essentially legalistic objections and to achieve agreement on a code. We would also be well pleased if we could agree that the code might, either from the outset or after a period running in, be extended to cover international trade in goods infringing copyrights as well as trade marks. None of this will be easy, but we believe that with a little luck it may be possible.
As to activity within the World Intellectual Property Organisation, the role of the conventions it administers, either jointly or with UNESCO and the ILO, is of the greatest value in setting standards for intellectual property rights. It is not the fault of WIPO that not all countries are willing to join these conventions. Where the standards seem inadequate, WIPO is looking at possible ways of strengthening them. Current work on "model laws" and principles for the guidance of governments in formulating their own intellectual property laws should encourage wider application of those standards. But WIPO must proceed by consensus, and its initiatives hitherto in tackling the problem of piracy have met with little success. Representatives of some countries, particularly those from developing countries, have failed to grasp, or, if they grasp it, to accept the urgency of the need perceived by the copyright industries in the developed world for better intellectual property protection.
Multilateral organisations such as the WIPO and the GATT move rather slowly, since there are many members with widely divergent interests. It is therefore important that the Government pursue particular problems more rapidly both bilaterally with countries primarily involved and through the Community. Noble Lords have referred to this strand of policy, and I am glad to be able to report that efforts on this front, too, continue unabated.
In the European Community we have been pressing our partners to agree to a possible Community instrument on broadly the same lines as the GATT draft anti-counterfeiting code. The outcome will be to require Customs authorities in other member states to block consignments of suspected fakes, pending legal action. Progress is being made, and, I can assure the House, will continue if anything at a faster rate under the UK presidency of the Council which begins in July. Our aim here is to make it harder for imports of counterfeit goods from outside the Community to undermine British manufacturers' markets in other Community countries. I think the noble Lord, Lord Lloyd of Kilgerran, pointed out that other Community trade policy instruments exist which can be useful in attacking piracy in certain circumstances. The IFPI are in touch with officials about one such problem to establish whether a case can be mounted.
Finally, we should not belittle what can be achieved on a purely bilateral basis. Although the United States 1024 may carry more clout in the international market place than the United Kingdom, direct discussions with the governments of countries where piracy flourishes have a considerable role. We have made representations for several years to the Government of Singapore over the need for improvement in the protection offered to UK intellectual property. A new Bill has now been published there which we are glad to see takes account of a number of the points we have made and the Singapore Government have promised that the new law will apply to UK copyright works. There are, however, a number of points on which we think the Bill could be further improved, and discussions will continue.
In July last year Taiwan also introduced a new copyright law, which provides for the protection of foreign works on a reciprocal basis. The United Kingdom has already taken the necessary steps to meet this criterion of the new law, by making an Order in Council that applies the protection of the Copyright Act 1956 to works first published in Taiwan. A new copyright law is under consideration in Malaysia, and we are watching the situation closely, with particular regard to the need to ensure adequate protection for foreign works. We have also made known to the governments of Korea and Indonesia the importance we attach to the introduction of laws there which will adequately protect United Kingdom copyright owners against piracy of their works. Again, we shall be maintaining contact on these issues. In the case of all these countries we shall continue to press the desirability, and long-term benefits to creativity in the country itself, of multilateral copyright protection through membership of the copyright conventions.
I hope I have demonstrated sufficiently that the Government take this issue very seriously indeed. It would be idle to suppose that any quick solutions are to hand, or that the copyright industries will obtain any early relief from the need to continue their own local monitoring and to pursue infringers through the legal processes that may be available in the countries concerned. But we shall continue to keep under general review the measures that government can pursue in support of the copyright industries, in the light of progress within GATT, the Community, WIPO and elsewhere, and to provide support in every way we can.