§ 3.40 p.m.
§ The Secretary of State for Trade and Industry (Lord Young of Graffham)
My Lords, I beg to move that this Bill be now read a second time.
The Copyright, Designs and Patents Bill which I commend to the House today is long and often technical. However, it is concerned with a most important subject; namely. intellectual property. It has been observed that nothing can be more properly described as a man's property than the products of his mind, and over the years a system of law has been established to protect ideas—patents for inventions, copyright for literature and art, and so on. The intellectual property system has served us will by encouraging creativity and innovation and the spread of ideas.
Intellectual property is of substantial economic significance. It forms the foundations of major industries. Without copyright law the publishing and record industries could scarcely operate. The entertainment world would be in chaos. How would the pharmaceutical industry operate without patent and trade mark laws? A recent study concluded that 2.6 per cent. of GDP is generated by copyright based industries. If one were to take into account industries which rely heavily on patents and designs the figure would obviously be higher still.
Our future prosperity depends on the people who make things happen, the people with ideas and those who apply them. The larger, more open, more competitive market for which we are working must be one in which innovative talent can thrive if creativity is to be encouraged. To achieve this we must enable people with ideas to protect those ideas from any who would steal them. But at the same time we must ensure that we are not overly protective in a manner which hinders competition or which introduces yet more unnecessary bureaucracy and regulation into the market place.
Those with ideas deserve a fair reward for their labours but they cannot expect to be completely sheltered from the real world. This would stifle rather than stimulate creativity. In drawing up the Bill we have sought to provide a fair return for creative talent and those who develop and use their work, while ensuring that ideas are not locked away but are accessible to society as a whole.
The Copyright, Designs and Patents Bill follows much research and consultation and is largely based on the White Paper we published last year. We have set out to restructure the law on a more logical and consistent basis than the often criticised existing legislation. There have been three other factors to consider. First, we have had to bring the law up to date with the latest technological developments. In the computing, broadcasting and photocopying fields there have been tremendous advances which could not possibly have been foreseen at the time of the 1956 Copyright Act. We have had to accommodate these changes and allow for future development. Secondly, we have been mindful of our international obligations. In particular, we aim to be in a position to ratify the latest text of the Berne 1477 Copyright Convention. Thirdly, we have tried to remove unnecessary obstacles to the use of intellectual property and the exercise of rights, making the whole system more user friendly.
I should like now to outline the Bill's provisions for the benefit of the House, picking up some of the factors that I have just mentioned. The Bill is in seven parts. Part I reforms and restates the law of copyright and will provide the substantive law in this area. It is by far the largest part, making up over half the Bill. It is subdivided into 10 chapters and presents the law in a very much more ordered way than the 1965 Copyright Act which it is to replace.
The first three chapters define the works that are to be protected by copyright; who is to own copyright; what the rights are; how long they are to last, and the exceptions to copyright. Copyright will continue to protect original literary, dramatic, musical and artistic works as well as sound recordings, films, broadcasts, cable programmes and the typographical arrangements of published editions. The provisions relating to ownership and duration are largely unchanged, as are the rights themselves.
We have, however, taken account of technical advances since 1956. For example, it may already be feasible for a computer to generate works to which it would not be possible to ascribe human authorship. In order to ensure that such potentially valuable works enjoy copyright protection, the Bill makes provision to ascribe authorship in cases of so-called computer generated works. We believe this to be the first copyright legislation anywhere in the world which attempts to deal specifically with the advent of artificial intelligence.
There are a number of exceptions to copyright, so that copyright material may be used without permission in circumstances where it is reasonable to do so and where the economic interests of the copyright owner are not damaged. In particular, the exceptions set out in Chapter III ensure that copyright considerations will not unduly hinder the processes of education, or public administration, or the working of libraries.
Several of the exceptions are new. For example, there are exceptions which will allow any broadcast to be recorded by schools for educational purposes and by organisations working for deaf people for subtitling purposes. One particularly significant change is a limitation in the free copying allowed for private study and research. This allowance is to be restricted so that it will no longer cover free copying for commercial research. Modern photocopying techniques permit ready copying of copyright material, and industry and business now makes considerable use of photocopied copyright material for their research purposes. It is anomalous that a business should be able to use another person's property without paying for it, particularly when the scale of the use may conflict with the direct exploitation of the work by the copyright owner. Under this Bill, copyright owners will be able to license photocopying and be remunerated for the extensive use of their works in commercial research.
1478 I should now like to refer to Chapter IV. The Berne Copyright Convention requires that the author be given the right to claim authorship of his work and to object to any modification which is prejudicial to his honour or reputation. The Bill enshrines these moral rights in statute for the first time. Film directors are also specifically recognised in the United Kingdom copyright legislation for the first time and are given moral rights in respect of their films. Moral rights are of great importance to authors and other originators of copyright works, who value their artistic reputations as much as the financial rewards for their works.
Chapters V and VI of the copyright part cover dealings with rights and the remedies for infringement. Except in one or two areas, the law is not significantly changed. There are several measures aimed at easing the burdens on copyright owners in establishing subsistence and ownership of copyright. On the other hand, a provision which sometimes led to awards of damages which were out of all proportion to the damage suffered by the copyright owner will no longer be available in copyright infringement cases.
We continue to take a very firm stand against piracy and counterfeiting. The stricter powers already introduced in respect of computer software and record and video piracy are to be extended across the board to all other works covered by copyright law. In industry, we are stepping up the fight against the counterfeiting of goods by making the fraudulent use of a trade mark a criminal offence, with a maximum penalty of up to 10 years' imprisonment. We want free and open competition in the market, but competition must be fair. I want to give warning in the clearest possible terms that the cheats, those who steal other people's property and ride on the backs of the good names of reputable businesses, will get no sympathy from us. I am sure that all sides of your Lordships' House will agree that piracy and counterfeiting are practices which must be stamped out.
The Bill acknowledges the increasing practice of collective administration of copyright and contains a number of provisions to regulate the operation of collectively operated licences. The jurisdiction of the Performing Rights Tribunal is to be expanded to supervise this.
All these provisions add up to a balanced package ensuring that the copyright owner is adequately protected and can get a fair return, while the users are not unreasonably denied the use of copyright material.
Part II of the Bill deals with performers. Performers do not at present have a copyright or any statutory civil right in their performances. The Performers' Protection Acts 1958 to 1972 protect performers from the making of unauthorised films, recordings, broadcasts or cable transmissions of their performances by creating criminal offences. The Court of Appeal has recently considered a case involving the use of clips and out-takes from the "Pink Panther" films starring Peter Sellers to make a further film in the series after Sellers' death. The Court held that the performer does have a civil 1479 remedy, deriving from offences under the Performers' Protection Acts, which survives the performers' death, so conferring rights on his personal representatives. In so finding, however, the appeal court recognised formidable arguments against conferring private rights of action since this gave the performer a right which was not subject to limitation of term or the exceptions which apply to the copyright.
Part II of the Bill provides a statutory framework of civil law for performers' protection which meets the appeal court's criticisms. The existing criminal law in this area is retained, although remedies are brought into line with those for the corresponding copyright offences. New civil rights are also provided for persons having exclusive recording contracts with performers.
I turn now to Parts III and IV of the Bill, which deal with designs. The House will be aware that this has been a contentious issue over many years. We take the view that all original designs deserve a limited amount of protection, quite simply because it is unfair to the designer if his new product can be copied in its entirety as soon as it comes on to the market. Where is the incentive to invest time, money and effort in producing a new product when others can hitch a free ride? We are therefore providing a new right for original designs which will give protection against copying for a 10-year period.
This will ensure that the original designer has a head start over those who wish to copy the design. However, we do not wish to keep competition out of the market for as long as 10 years and we have therefore provided that licences will be available as of right after five years, and even earlier if the Monopolies and Mergers Commission finds that the right is being exercised against the public interest.
Even this, however, does not deal completely with the problem of spare parts where the customer is a captive one. Because spare parts have to fit, they must to some extent be copies of the original designs. Consequently, the Bill will allow copying where there is no design freedom. This will apply whether there is no design freedom for functional or aesthetic reasons. Of course, where there is design freedom, competitors will have to create their own designs. This will ensure that designs are protected from unfair copying. But competitors will always be able to copy as much as they need to.
The Registered Designs Act will be amended to avoid its being used as a back-door method of protecting spare parts and so that protection will only be available for truly aesthetic, stand-alone designs where competitors do not need to be able to copy such designs in order to compete effectively. On the other hand, to ensure that design effort is encouraged the term of protection for registered designs is to be increased from a maximum of 15 years to 25 years.
These measures taken as a whole mean that, as in copyright, we have provided a balanced package which will encourage creative design effort without inhibiting competition.
We are making changes by way of Parts V and VI of the Bill to open up the intellectual property system 1480 and to make it more accessible to its users. The exclusive right of registered patent agents to act for inventors in dealings with the Patent Office is to be abolished and in the future anyone will be able to represent them. Existing restrictions on mixed practices (for example, of patent agents and venture capital advisers) will be relaxed. The proposals on patent litigation will do much to make the system more accessible. At present, patent litigation is undertaken in the High Court and many innovatory smaller firms find that the cost and complexity of proceedings are such that their patent rights are effectively unenforceable. Equally, they find they are unable to defend themselves against allegations of infringement.
The particular White Paper proposals were criticised, but there was general agreement that something needed to be done. On reconsideration, we have concluded that a new county court jurisdiction with special procedures will reduce the cost and complexity significantly, enabling the smaller firm to compete on a more level footing with the larger companies. We will also amend the Patents Acts to remove anomalies and simplify procedures.
The House may recall that the noble Lord, Lord Northfield, introduced a Bill in the last Parliament concerned with the licensing of certain pharmaceutical patents. That Bill, which we supported, had passed to another place when it fell on Dissolution. The present Bill includes provisions which closely follow those in the Bill of the noble Lord, Lord Northfield, as it left this House, but now includes powers to extend by order the provisions to non-medicinal products. The effect will be that licences will not be automatically available to manufacture certain existing patented pharmaceuticals in the last four years of their patent life.
Finally, I remind the House that the Government are continuing to press the case for London to be the site for the European Community Trade Marks Office. Part VII of the Bill will provide the necessary statutory authority for financial assistance to be given to this office if it is located in London.
As I said at the outset, this is a very long, technical Bill. But I believe that it will provide us with a new framework of intellectual property law, particularly in the field of copyright and designs, which will see us in good stead for many years to come. It takes account of the very latest developments in modern technology and it will make the intellectual property system more accessible and more relevant to the needs of British business. This Bill will encourage creativity and enterprise and the growth of fair competition. I commend it to your Lordships' House.
§ Moved, That the Bill be now read a second time.—(Lord Young of Graffham.)
§ 3.56 p.m.
§ Lord Morton of Shuna
My Lords, my first duty is to express regret that a family bereavement has prevented my noble friend Lord Williams of Elvel from taking part in today's debate and to assure the House that he will be taking a full and active part at the Committee stage.
1481 From this side of the House we have a general but rather guarded and cautious welcome for the Bill, which is in fact two or three Bills in one. We are rather more favourably disposed towards the copyright part of the Bill than towards the design and patent parts. We welcome it because it aims to bring up to date and to reform areas of the law which are of considerable importance to industry and business. Our welcome is cautious because of the extreme complication and technical nature of the Bill, which must be intended to last for at least 30 years. This means that the Bill will require close scrutiny in Committee and will entail, I am afraid, many clause stand part debates, for which we apologise in advance.
Two major issues which were proposed in the White Paper have been omitted. We welcome the omission of the proposals to extend the jurisdiction of the controller of the Patent Office. We consider that those proposals were mistaken, and it is good to see them disappear. The other important omission is the blank tape levy. Here we are not sure which way the Government are facing. Certainly the omission of this provision may save some time in Committee, but it is difficult to see that it is right to leave things as they are, where the owner of the copyright in a sound recording does not have or appear to have the same protection and return as the owner of copyright in a printed work and where the private taping of records and tapes, which does go on, is apparently to remain illegal but uncontrolled. We do not think it right that that matter should be left in the air. Are the Government bringing forward proposals about taping or will they just leave it? If there are to be proposals, what form and what direction is it intended that they should take?
Turning to the different parts of the Bill, we welcome the re-statement of copyright law, which had reached a level where it was almost wholly incomprehensible. However, many points of detail remain on the question of meaning, and it remains doubtful whether it could be understood by an intelligent layman even as drafted in the Bill.
The Government's proposal to introduce moral rights is welcome and in keeping with the obligations under the Berne Copyright Convention. It is therefore regrettable that the new moral rights announced in the Bill are for most practical purposes quite useless. The first moral right proposed is the right to claim authorship, the right to put your name on something, whether a painting or a publication, which you have created. That is fair enough.
The Bill then proposes that this right shall exist only if it is first asserted by the author. He must have prior knowledge of the dissemination of his work through publication, exhibition, sale or broadcast in order to be able to assert his moral right to authorship. That is a curious right. It can hardly be said to exist as a right for the persons for whom it is intended unless there is an obligation on the publisher or exhibitor to assert the right of the creator in advance; otherwise the burden on authors and other creative people is unfair.
The remedies proposed for breaches of moral rights are pinned solely to economic loss, yet moral 1482 rights are concerned with the protection of reputation and integrity and are not the province of economic rights. Economic rights are covered by the law of copyright, so to allow a remedy for breach of moral rights only when it can be shown that economic loss has been sustained is to confuse two distinct branches of the law on two different sets of rights. Surely the remedy for authors lies in proof of damage to their reputation, which is a general damage not restricted to economic loss.
It is difficult to see how Clauses 63 and 24 are to fit together. How do you prohibit in effect all video recorders and tape recorders and yet allow the private taping of broadcasts? It appears to be the case that if somebody privately tapes a record of, say, a symphony, that is an offence and is illegal. But if that same recording is broadcast on Radio 3 it can be taped legally. That seems to be an odd result and no doubt it can be cleared up. It is difficult to see why there is to be a different approach to the ownership of copyright in Clause 11 compared with the ownership of design right in Clause 194. It is also difficult to see why the periods for copyright in photography and films and for copyright in written work are to be different.
There are problems in the defences in Clauses 29 to 31 dealing with permitted actions. Is fair dealing to be restricted to the activities mentioned in these clauses of the Bill, or is it to be a generally permitted defence? Commercial research is defined in Clause 161 in such a way that it is difficult to see exactly what it does not cover. Commercial research is defined as:research done for the benefit of a trade or business carried on for profit".The question then arises: at what time? If somebody is doing pure research without concern for profit and then halfway through it discovers that there may be some commercial application, is the copying he has done for that retrospectively illegal? What is the position to be?
On the copyright tribunal, we welcome the extension of jurisdiction and the provisions in general. As a Scot I am pleased to see that the noble and learned Lord the Lord Advocate is to be consulted by the noble and learned Lord the Lord Chancellor on almost everything. Quite why it is necessary for the noble and learned Lord the Lord Chancellor to consult the noble and learned Lord the Lord Advocate to find out whether somebody has gone bankrupt I am not certain, though no doubt there is some reason for it.
We welcome the provisions on rights in performance, but should not these rights be copyright and be stated to be copyright rather than some form of subsidiary right? The design right provisions are, as the Minister stated, a very difficult area and one of fundamental importance to industry. A new right is being created. There are obvious problems in the relationship between the design right and the copyright. It is important that we get this part of the Bill correct and a principle clearly defined, or at least as clearly defined as possible. One of the offences that was spoken to as being the aim of these provisions relates to counterfeiting, but counterfeiting and copying are not coterminous 1483 words and there is a considerable distinction between the two.
On patents, the difficulty has always been the cost to the small and medium-sized inventor who cannot afford to fight the large companies. The county court provisions are interesting but will depend almost wholly on the rules and how they will work. We have not seen those yet. It may well be that the adversarial system in the courts to which we have been accustomed is the cause, or one of the main causes, of the excessive cost of litigation and in this sphere we may have to move into something more akin to the inquisitorial system.
On the licences of right provisions, the abolition regarding certain pharmaceuticals was, as the Minister has already said, previously included in the Bill sponsored by my noble friend Lord Northfield which fell in the last Parliament. The crucial issue there was the expected cost to the National Health Service. As the estimate in the Financial Memorandum seems to be different from the estimate given at the time my noble friend's Bill was being discussed in the House, we shall require to explore this matter carefully in Committee.
The Bill is important because a balance must be struck between civil liberties and the protection of rights to intellectual property. It is important that the right should be protected sufficiently to encourage research, innovation and production of new articles but it appears that over the past years breach of these rights has tended to become a criminal offence rather than a matter of civil remedy. We are not entirely satisfied that that approach is necessarily right. The theme that will run through our scrutiny of the Bill is whether this balance is correctly struck.
§ 4.8 p.m.
§ Lord Lloyd of Kilgerran
My Lords, perhaps I may, first, congratulate the Secretary of State for Trade and Industry on his concise and clear summary of the main proposals of the Bill. It is a massive Bill. It has 277 clauses, seven schedules containing 183 paragraphs, many of them running into seven to 10 subparagraphs, and occupies hundreds of pages. I agree with the Minister that this is an important Bill. It has substantial economic importance and is a step forward in the encouragement of creativity.
In a press release on 30th October, only a matter of a few days ago, the Chancellor of the Duchy of Lancaster said that the Bill:will make the intellectual property system more accessible and relevant to the needs of British business. This Bill will encourage creativity and enterprise and the growth of fair competition".It affects hundreds of advisers to industry and hundreds of members of British industry.
I am sorry to have to cast a little pebble against the usual channels but this Second Reading debate comes today when it was scheduled to take place on 17th of this month. A large number of Peers from all sides of the House have told me that this has made life rather difficult for businesses and their advisers on this important Bill. My post this morning was over six inches high, and even as I was sitting here I had contributions from persons who had hoped to make representations during the next five days but who unfortunately have not been able to do so.
1484 Perhaps I may remind Members of the House that we had an interesting debate on the working of the House of Lords. The noble Lord, Lord Harris of Greenwich, pointed out that when we have massive Bills like the Criminal Justice Bill, with 137 clauses, we ought to have more time to consider these important matters. This Bill is twice as long as the Criminal Justice Bill and we have lost five days on which we could have had consultations. However, I really must not pursue this matter because I have had a full confession from the Leader of the House, who expressed to me personally, in a letter I received this morning, how sorry he was that he had inconvenienced me and members of industry by having deprived us of five days of consultation.
I must therefore ameliorate in some way my criticism in this matter by saying, in declaring my interest, that almost the whole of my adult life has been devoted professionally to questions of intellectual property, internationally as well as nationally. When we read the foreword signed by the Prime Minister to the Green Paper, Cmnd. 9117 of 1983, many of us were delighted that the Prime Minister had taken such interest in intellectual property and had stressed the great importance of intellectual property for the creation of wealth when adequately understood and adequately operated, as the Minister has said. She pointed out there—and I have noticed it during my experience—that in the field of intellectual property there is a lack of knowledge as to how to operate the mechanics of it. We are still a long way behind the Americans, the French and the Germans in creating wealth through their methods of intellectual property.
I also express through the Minister the sincere thanks of many persons in industry, in associations and in various bodies, to the civil servants in the department and their advisers, who have been so helpful to persons like myself closely associated with these highly technical matters of intellectual property. Finally, I should like to mention members of the Minister's staff who have been so kind and helpful to Mr. Geoffrey Proudlove, who has done a great deal of work here; also to Alistair Wilson, Queen's Counsel, who is a member of my old chambers. In particular, I should like to thank Mr. Victor Tarnofsky of the Patent Office, and also Mr. Ivor Davis, who did such splendid work at the Patent Office when he was the Comptroller-General of Patents. As the Minister said, this is a highly technical field, and we are deeply grateful to them.
I should like to conclude my list of thanks by mentioning the Minister, John Butcher, from the other place. He has borne the brunt of complaints and requests for information in relation to the White Paper over a number of years, and many people have tried to persuade him what should be in the Bill. He has done a great job, if I may say so, in avoiding a lot of the problems that might have arisen had not the Government been so kind as to allow such consultations and to prevent this Bill being once more a playground for lawyers and not clear in its parts.
There must be a great deal of tightening up of the Bill in the course of the Committee stage. I am not going to deal with minor matters, but there are a 1485 number of points that I wish to put to the Minister. I wonder why there has been an omission in the Title of the Bill. It is a trade marks Bill. The Explanatory Memorandum refers to "patent and trade mark agents", and makes certain comments on trade marks, but that is omitted from the Title. Small chinks let in much light. This is another example of people not understanding the difference between patents and trade marks. There are great differences. They are both extremely important as limbs of intellectual property. In their different ways they are able to make a great contribution to the economic welfare of this country.
There is another omission. There is no reference in this Bill to the rights of an employee designer in industry. In Section 40 of the Patents Act 1977 there is a reference to the rights of the employee inventor. I laboured for years to get into the Bill, when the Labour Party was in power, that employee inventors should have rights in relation to important inventions, and that was put into the 1977 Bill in respect of patents. I suggest that the Government ought to consider whether the position for the employee designer should now be considered for inclusion in the Bill.
When I was consulting representatives of various directorates in the EC, I understood that there was to be harmonisation of the copyright laws of the EC. We have not heard very much so far—if anything—in the Explanatory Memorandum as to whether the Government are proposing any harmonisation in the Bill. There were two anomalies which were raised some years ago, and I am glad to see that one of them has been removed. One of the serious anomalies in copyright law was that if there was an infringement of copyright you could have much greater damages—technically known as conversion damages, which could come to a very high amount—quite different from the damages which arose in patents and in trade marks. I understand from my reading of the Bill that Clauses 86 and 87 are directed to dealing with conversion damages and to reject them from our jurisprudence. It should be made much clearer that that is the position of the Government in Clauses 86 and 87.
Another anomaly that was raised in those discussions I had with the EC directorates was the period of copyright protection. On reading the Bill, particularly Clause 12, I am not sure what the Government propose should be the period of rights which you can have in copyright. Is it 50 years? It should be made clear that it is 50 years. Up to the present it was possible—and this is another anomaly of the English law—that an astute owner of a copyright, aged, say, 60, could join with him a young man of 20 as a co-owner of the copyright.
If it extended to 50 years after the period of his life it was thus possible to get something like 80 or 90 years for the term of the copyright, which from an international point of view was quite absurd. I wonder whether the Minister could indicate—not today but at some later time—the precise term of this copyright.
I should like to mention moral rights, which the noble Lord who has just sat down also mentioned. I 1486 have had today a memorandum from the Arts Council, who asked me to commend the Government for having taken heed of much expert advice of the Arts Council in the preparation of the Bill. But they say that so far as concerns Clauses 69 to 79 the right of authorship is untenable as drafted in the Bill. According to the Bill, the requirement to assert the right before it can be enjoyed by authors is not merely against the spirit of the Berne Convention, whose provisions on behalf of authors the Bill is supposed to enact, but is also unworkable in practice.
They give this example. Imagine that an exhibition of one's own painting was held in a gallery but one's name was left off. Under the Bill that would be a breach of one's moral right. However, imagine that on complaining to the gallery the reply was, "But you did not assert your right in advance." What kind of right is that? It is no right at all but a provision which serves to protect not only the producers of creative works but the consumers. Yet the galleries, like publishers and broadcasting companies, are already able to protect themselves by contract if necessary. In my view, that is a serious defect in the clauses on moral rights with which no doubt the Government will be good enough to concern themselves.
I should like to turn to Clauses 264 and 265 which are directed to reducing the cost and delay in patent legislation. I approach the matter with cautious approval and I understand that Sir Patrick Graham, who was a judge of the High Court dealing with patent matters, has sent a memorandum to the Lord Chancellor on the matter. I hope that it will not be considered discourteous by the House if I do not read the memorandum which I received only this morning. I am sure that matters contained in the memorandum can be made available to the noble Lord, Lord Morton of Shuna, through the offices of the Lord Chancellor.
I should like to say something which may be a little provocative. The Comptroller-General of Patents always had jurisdiction to deal with infringement of patents. I do not know that many such cases have been heard in the Patent Office, but I agree with Sir Patrick Graham that it is now a dead letter for the Comptroller-General of Patents to have that jurisdiction.
Perhaps I may deal quickly with several major points which arise. Clause 89 grants draconian powers for the seizure of the rights owners. That power is opposed and in our view the clause should be deleted. Clauses 94 to 97 deal with presumptions—a matter of considerable importance. Clause 94 prevents the plaintiff being put to proof of the subsistence of, and his title to, copyright in cases where the defendant has no evidence to justify putting those points in issue. It is totally unprecedented for a plaintiff not to have to prove his own case. Often the only person who knows the true position as to the ownership of copyright is the plaintiff. If he truly owns the copyright, it is not normally a difficult task for him to prove it.
In reality, the problems experienced by plaintiffs who are required to prove their title arise because, in the course of the case, they discover that they are not the owners. For example, it is frequently discovered 1487 that a third party designer was the true owner and not the plaintiff in the case. The plaintiff then has to obtain an assignment and that may be difficult. Therefore, the presumption that the defendant must justify issues in the matter, but the plaintiff not, is quite wrong.
The provisions of Clauses 94 to 97, as drafted, may allow the Act to be used as a vehicle for the suppression of honest competition, especially in industries producing articles which are primarily functional but in the design of which there is nevertheless a certain degree of freedom.
Dealing with another important matter, the Minister referred to the desire, with which I agree, to suppress piracy and counterfeiting. The penalty of imprisonment has been introduced for those found guilty. I suggest that the sanction if imprisonment in those circumstances should be deleted. In line with trade marks and registered designs, criminal sanctions for infringement of copyright should be abolished. In my submission, criminal penalties should be confined to counterfeiting from overseas outside the EC.
There is little more of a general nature that I wish to put before the House. I have considerably exceeded my time but I should like to support the Minister's remarks as regards the financial provisions to be made available for the setting up of the Community Trade Marks Office in London. That sounds a promising title but I ask rhetorically whether the efforts that have been made to establish that trade mark office have been successful.
I should like to make a further plea. Large numbers of businesses and their advisers are anxious to help in improving the Bill. I make an earnest plea for a longer interval of time before the Committee stage. I realise that the timetable of the Government is difficult but I believe that an exception should be made of this massive Bill and that a longer time for consideration should be given between Second Reading and Committee stage.
§ 4.27 p.m.
§ Lord Lloyd of Hampstead
My Lords, I propose to confine my remarks to the copyright section of this massive Bill. I should like to congratulate the Secretary of State for being in the happy position of introducing major reform in our copyright law. It is true that it has taken 10 years to produce the result. The Whitford Report was made public in 1977. After the publication of a Green Paper in 1981, I had the privilege of introducing a Motion in your Lordships' House, which some noble Lords may remember, in which I expressed regret that five years had already passed. I wondered how many more years would need to elapse before the final product was presented. We now see it after a further five years. Nevertheless, we can rejoice at the outcome in so far as the Bill achieves its objective, which in the main it does.
I find particularly pleasing the fact that the draftsman, and those directing him, have recognised a point that I made in the Motion in 1982. It was that the whole law needed recasting and that an amending Bill was insufficient. Rather surprisingly, we now benefit from the redrafting of the whole of the 1956 1488 Copyright Act. The Whitford Report pointed out the fact that the 1956 Act was a nightmare for those trying to understand it. The call for a fresh start has been heeded and it is a matter for congratulations.
§ Lord Broxbourne
My Lords, if the noble Lord will allow me to interrupt, will he dissociate himself from the somewhat ungraceful reference to the Copyright Act 1956 from the Front Bench opposite? It was my privilege, or task, to take that Bill through the House of Commons. I venture to ask the noble Lord to say that the Bill has served its purpose well albeit, as with most Bills of that age, it now requires improvement and amendment.
§ Lord Lloyd of Hampstead
My Lords, it always gives me pleasure to express commendation of any course that the noble Lord, Lord Broxbourne, has taken and I am sure that those of us who have had to practise and operate under the 1956 Act realise that it was in itself valuable legislation. This is not to say that its drafting was entirely satisfactory, as I am sure the noble Lord would be the first to concede. I suspect that, if he has had an opportunity to read the massive amount of succeeding legislation, he would agree that the Bill is in a much more satisfactory form.
Whereas the previous Bill started off with a complicated discussion about what constituted a "qualified person" for the purposes of the Act, that aspect is now relegated, quite properly I think, to Chapter IX; and the opening chapter deals logically with the whole position of what amounts to copyright.
I want to express some regret that this Bill has had tacked onto it bits and pieces of reforming legislation regarding patents and designs. This is an unnecessary complication. Copyright, although admittedly part of our general law of intellectual property, has always been treated as different from patents. Now that we have major legislation in the copyright field summarising the reformed law of copyright, I think that it is confusing to have tagged onto it bits and pieces of other intellectual property provisions that would be more satisfactorily dealt with separately. No doubt the tacking-on process is for parliamentary convenience, but it is not very good for the general framework of the law.
As we know, the copyright law has to strike a balance between creative workers and the great industries that support them, on the one hand, and the consumers who enjoy the fruits of those creative workers on the other. To achieve this result maximum access has to be given to the public compatible with the fair rights of authors. As the noble Lord, Lord Young of Graffham, pointed out, copyright is a form of property. I am glad to see that in Clause 1(1) the specific point is made, "Copyright is a property right". One must realise that it is a form of property which is as much entitled to protection as are our homes, factories, personal goods, and so on. The public do not always appreciate this point, particularly in regard to matters like home taping. It is on that aspect of the Bill that in the main I wish to concentrate.
A curious feature of the opening speech of the Secretary of State, if I may say so, is that he made no 1489 reference to this subject. In the White Paper the Government adopted the policy of imposing a levy on blank tapes to compensate people who had their copyright material illegally and privately taped in other people's homes. They recognised that the only way in which to deal with the problem was by way of a levy on blank tape. One then suddenly finds this tremendous lacuna in the legislation of a feature given great prominence in the White Paper.
I wish to retrace a few of the steps that the Government have taken in their consideration of the problem to show how surprising the outcome is. To go back to Whitford 10 years ago, they already recognised the problem that control of taping was unenforceable so far as home activity was concerned and that the only solution was to impose a levy on either equipment or blank tapes. Then came the Green Paper of 1981, which said that there was a great need to do justice to copyright owners. In the absence of a spoiler system, that is, some built-in technology enabling the tape to fail to record copyright material—it is true to say that not even the ingenuity of Japanese technology has yet devised such a system—the Government said that the only solution was a levy on blank tapes. They agreed to do this in the case of audio tapes, although they rejected it in the case of video cassettes of feature films, rather blandly taking refuge in the statement that they were not convinced that the film industry was being harmed. That was a different view from that taken by the film industry itself.
Then came the Green Paper of 1985. That made a considerable advance on the Government's position and aroused new hopes in the minds of copyright owners, including those of feature films. In the Green Paper a levy on blank audio and video tapes was proposed in return for legalising home-taping. It was agreed that this involved some rough justice and that there should be various exceptions in regard to blind or disabled people and certain organisations. Nevertheless it was said that the difficulties could be overcome and the levy could be collected by collecting societies on the model of the Performing Right Society. In the Green Paper the Government even went so far as to recognise that the film industry was affected. The Green Paper says:One possibility might be for film proceeds to be diverted to a central fund to support production.Hopes rose considerably when that passage was read.
Subsequently, however, came the Films Act 1985. As some of your Lordships at least will know, there were protracted battles on this matter regarding a video levy. I note with pleasure that the noble Lord, Lord Lucas of Chilworth, is to take part in the debate. As the Minister of the Government then responsible he will of course recollect the sturdy resistance that he put up to any suggestion of a video levy. As a result, in my view—I believe that at the time a good many people shared my view—a golden opportunity was lost to place the finances of the film industry on a sound basis, perhaps for the first time, and at no cost to the Treasury. I shall not rake over the embers of that past conflagration. One recognises that the battle has for the time being been lost. I confine my observations now to audio tape.
1490 So far as concerns audio tape, after the resounding proposals of the Green Paper of 1985 there appeared the White Paper of April 1986, in which the Government accepted positive recommendations for a levy on blank audio tapes and at the same time legalising home taping, on the basis that there was no realistic alternative. They then put forward firm proposals to solve the problem along the same lines as measures successfully adopted in many leading European countries, including Germany, France, Austria, Norway and Sweden. Behind the Iron Curtain, even Hungary has introduced a system of levying on tapes.
After that most interesting disquisition in the White Paper, following the earlier proposals, rumours began to spread which unfortunately have proved all too true; namely, that the Government were yielding to persuasion—lobbying or whatever it is called—and were changing their views. It was rumoured that they intended to drop the scheme; and so it has proved. We have a great and manifest lacuna in this legislation, and by following the Government's own principles it appears that justice will not be done. Apparently the Government will acquiesce in, if not actually encourage, daily acts of theft; namely, the deliberate seizing of the products of other people's brains by people in their homes, where there is no conceivable possibility of enforcing existing law. There will be created a situation not of rough justice but of flagrant injustice, which will be on a massive scale because the process is going on in millions of homes.
One can only express a faint degree of surprise, if not astonishment, that a government who set themselves up as the champion of a property-owning democracy should show such total disregard of claims on a legitimate form of property as enshrined in the very first clause of their new Bill. It is property, after all, which is of immense significance to both the culture and industry of this country, as the Minister pointed out. The reasons that are given are manifestly insufficient—at least so far as they appear in the press, which is all I have read.
As I have said, the Minister did not make any reference to the question. In the press it has been suggested that the Government's view is that the result of such a measure would be to levy a new tax. In the Green Paper of 1985, on page 5, the Government stated:The levy would constitute a royalty collected and distributed, after administrative costs, solely on behalf of owners of copyright in material subject to private copying. It would not be a tax, but would be provided solely as a means of transferring royalties from users of copyright material to copyright owners".A similar passage appears in the White Paper and I shall not take up the time of the House by reading it.
It has further been said that the Government are coming down in favour of consumers. One must concede that there are a great many more consumers than copyright owners, so if it is a question of securing popular support I suppose it can be assumed that everyone likes to have something for nothing and that home tapers would rather obtain free material than have to pay a little more for their blank tapes. That does not seem to be a fair way of looking after the interests of consumers.
1491 On this Second Reading of the Bill I venture to urge the Government to think once again about this vital matter. On various occasions already they have placed themselves on record as strongly supporting the need for justice in this matter and have indicated that there is a practicable and sensible way to achieve it. It is something that has been achieved in many other developed countries. I think it is a sad day when there is such a blemish on a valuable piece of legislation.
§ Lord Young of Graffham
My Lords, does the noble Lord seriously argue that the payment of a levy of lop should legitimise theft of another person's copyright; or alternatively that a charge should be made, by means of a levy of lop on a tape that is not used, for the purpose of legitimising theft of another person's copyright?
§ Lord Lloyd of Hampstead
My Lords, I am not entirely sure what point the Minister is seeking to make. Is he saying that there are certain people—I do not doubt that there are such people, although they must be in a small minority—who possibly use tapes for purposes other than copying copyright material? That is part of the argument that the Government themselves have referred to as rough justice, and there is some element of rough justice in that. Nevertheless, it is beyond dispute that up to 95 per cent. of home taping involves the taping of copyright material, and there are ways—the Government themselves have indicated them—in which those exceptional situations may be met.
It had been my intention to make some brief comments on other aspects of the copyright Bill, but I am afraid I have already exceeded what might be regarded as a reasonable time for speaking in this debate. Admittedly, to some extent—I make no complaint about it—that time has been encroached upon by interventions, which I am sure were very helpful.
§ Lord Broxbourne
My Lords, perhaps the noble Lord would agree that the interventions brought forth the best part of the speech.
§ Lord Lloyd of Hampstead
My Lords, I hope the noble Lord, Lord Broxbourne, feels that that has occurred in this instance as well as others. Be that as it may, I should like to conclude by saying that while one welcomes the Bill as a very important contribution to our intellectual property law, one hopes that the grave lacuna that I have ventured to point out will be given serious attention by the Government. I hope that at least in the course of later debates on this Bill—not necessarily in this Second Reading debate—they will throw further light on their intentions.
A large section of industry in this country is extremely anxious about the situation. I do not speak on its behalf. I have no interest in it whatsoever. I have no interest to declare and therefore do not declare any. I am concerned solely with the general principle that is involved. I therefore confine myself for the moment to those observations.
§ 4.48 p.m.
§ Viscount Eccles
My Lords, it has always been a pleasure for me to follow the noble Lord, Lord Lloyd of Hampstead. He has done more for the British cinema industry than any other man I know of, and one must always listen to him when he is speaking about pictures in any form. Having said that, I do not quite agree with his remarks; but that is no matter.
The question of copyright raises a very old conflict between authors and publishers, on the one hand, and users of their material, on the other. There must be rights for authors so that they can protect their material and control the way in which it is used, but obviously the question arises as to how restrictive those rights are to be. I think all noble Lords would agree that a balance has to be struck between the creators of intellectual property and the public who use that property.
I regret that I have not had enough time thoroughly to investigate the whole of this very important Bill, but from a cursory examination I believe that a fair balance has been achieved, with one very important exception. Before I come to that defect I should like to thank the Government for Clause 42, which makes it legal to photograph manuscripts in order to facilitate their preservation. This relaxation will enable rare book libraries better to preserve large quantities of documents, papers and pictures. From bitter experience I know that in the British Library the reader is the principal enemy of the manuscript and the book; the more the reader handles such fragile material, the more damage it suffers, so exact copies, which can now be made, will help to avoid the deterioration becoming a disaster.
I now come to the defect in the Bill. I, and many others more knowledgeable than I, should like to see the words "other than commercial research" in Clause 29 and Clause 38(2)(a) deleted. The effect of these words is to impose a new restriction on access to the information of use to trade and industry. We are very lucky in this House to have the Secretary of State himself in charge of this particular Bill. Who does not applaud the efforts of my noble friend to make British industry more efficient and more competitive? He is doing a lot to remove handicaps which our rivals in other countries do not have to bear. Therefore, when I read these words in the Bill I felt that I must put the blunt question: is my noble friend on the side of half a dozen publishers who are already doing very nicely out of their high-priced journals and constantly raising the price and making discriminating prices; or is he on the side of trade and industry?
This is not only a question of requiring firms, or their agents, to pay for what they are accustomed to obtain without a royalty. The really important question is this: how easy and quick is it to secure the information which is useful to both large and small firms? I know that my noble friend is much interested in small firms; these are the people who do not have the resources easily to get hold of information of first-class importance to them.
The Bill would make access a much more complicated, laborious and time-consuming business than it is now. I ask the House to look for a moment 1493 at Clause 38(2)(a). Noble Lords will see that the librarian—poor man—has to be satisfied that the person requesting the information requires it for private study or research, and not for commercial research. The librarians I know—and I have moved among them for a very long time—will tell you that they have no means of ascertaining with certainty the purpose for which a piece of information will be used or passed on; of course, republication is prevented because there is a penalty.
However, suppose someone comes to the British Library and asks for a copy of an article dealing with the ethnic origins of the population in a district of Manchester. What does he want that information for? Is he a sociologist, interested in where our nonwhite citizens are living? Or, is he a market researcher, interested in discovering whether his particular product is likely to sell in that particular area? He could, of course, be both and I am told that sometimes he is. The librarian can hardly be expected to be satisfied about the use to which the information will be put. Perhaps I may just read the short words in Clause 38 because they really are extraordinary:The prescribed conditions shall include the following—that copies are supplied only to persons satisfying the librarian that they require them for purposes of private study, or research other than commercial research, and will not use them for any other purpose.The fact is that no one can draw a clear line between academic and commercial research and yet, if the Bill becomes law as it stands, that is exactly what the librarian, overworked and probably not an expert in this field, will have to decide in case after case, over and over again. This is a new obstacle to commercial research. It would not only handicap industry, but the methods proposed to operate the restriction would not work in the most sophisticated libraries—and I can certainly say that of the British Library which issues several million copies of this kind every year.
In order to provide a little more profit for Messrs. Robert Maxwell, Butterworths, Blackwells and a few other publishers—not to mention the many foreign publishers of intellectual journals—it is proposed to get round the difficulties of the unfortunate librarian by setting up licensing agencies to collect royalties from commercial researchers. So far as I know, the United States is the only country in the world where such a system is being tried. But how does the American system work? In the first five years of operation all the fees collected by the United States Copyright Clearance Centre were consumed by administrative costs. This year a few royalties are said to have been paid out, but the time-lag between the making of the copy and the payment of the royalty also happens to be five years. I doubt whether the authors would ever get anything. Whether British agencies would do any better I cannot say, but it is certain that the complications and the time required to operate agencies would be an expensive and harmful restriction on the use of the information by industry.
It is worth noting that it is the publishers, and not the authors, who are campaigning for extra money. Authors of articles in learned journals—so I am informed by the library—do not seem to want royalties. Can your Lordships imagine a doctor who 1494 has contributed an article to a medical journal having to refuse to allow a member of his own profession to use that article until some royalty has been collected by the agency set up by the publishers? I can assure the House that my own father, who wrote a lot of articles in medical journals, would have been horrified at the idea that something he had written was not free for anybody to make use of.
When this Bill comes to Committee I shall be on the other side of the Atlantic, and therefore all I can do is hope that your Lordships can persuade the Secretary of State for Trade and Industry to drop a provision which damages the causes he has at heart and harms the clients, both big and small, for whose well-being the title of his office makes him responsible.
§ 5 p.m.
§ Lord Willis
My Lords, my noble friend Lord Morton of Shuna gave a cool but cautious welcome to the Bill. I should like to give a slightly warmer welcome. I think the reason may be that I have been waiting for it a lot longer than he has. In fact I feel rather like somebody who has been standing at a railway station on a cold winter morning for a very long time and when the train eventually arrives I do not really care whether it has a buffet car or first class carriages as long as it is there. So I welcome the Bill and I agree with other noble Lords who have spoken about its key importance.
British copyright has long been a model throughout the world. Therefore it is tremendously important that we should get this Bill right, because it will have consequences not only here but elsewhere. I have to declare an interest as an author. My ownership of copyright puts cornflakes on my table every morning, so I cannot complain about that. I am also president of the Authors' Licensing and Copyright Society, which has done sterling work in collecting royalties and other payments for authors in this country.
I welcome very much the statement in the Bill about moral rights and the establishment of those being enshrined in legislation. I regret very much that, having given with one hand, the Government appear to take away with another in Clause 77, where there is a waiver of those moral rights. On the other hand, in the spirit of what I said when I began, the Government have not got it all right—it would be astonishing if they had got it all right in such an immense Bill—and I want to pick up one or two points which will have to be looked at in closer detail in Committee.
I want very strongly to press home the case that my noble friend Lord Lloyd of Hampstead made about home taping. It is absolutely astonishing that after the case made in the White Paper this should be now left out of the Bill. Although the noble Lord, Lord Young, is not in his place at the moment, he interrupted my noble friend to ask whether it was fair to put a 10 per cent. levy on tapes, even though some of those tapes may not be used for home taping purposes and might be used instead for private filming, private video taping. All the experience shows that a 10 per cent. levy on audio or video tapes would not disturb the market one iota; it would be 1495 subsumed and taken up by the consumer without a hiccup.
Let us assume that 10 per cent. of the use of videotapes is by people who want to take pictures of their children, their grandchildren and so forth and to have video records of their families. There is still 90 per cent. home taping going on, and, whatever way you look at it, that is theft. It is theft of property. If you have a television set you have to pay for a licence to operate it. If you do not have a licence you are breaking the law. So on the one hand we have a law which says that to have a set in the corner you must pay a licence fee; otherwise you are breaking the law. On the other hand, once you have paid your licence fee you can steal everything you want off the box. Whatever the BBC puts on, whatever ITV puts on, you can put it on home tapes and steal it without paying a penny.
Of course it is impossible—we all know that, and various governments not only in this country but abroad have recognised this—to enter people's homes and say, "You are home taping. Pay a penalty". What is the simplest way? The simplest way is the way they have found in France, Germany, Portugal and Spain—put a levy on blank tapes.
The Government may worry that they have a big problem. They have even suggested that this might be thought of as a tax. We know that it is not a tax. It is a levy. The Government would not have to distribute it. There are perfectly adequate distributing societies in this country, both from the publishers and from the authors, which could distribute this money to authors. It is being done elsewhere. Why do the Government not study how it is being done elsewhere? Why have they gone back on what was outlined in the White Paper on this point? I stress that I hope the Government will come back to this because it will not go away. It is a problem that will increase and it is totally unfair.
The same problem applies to the rental of tapes, videotapes and others, in the high street. We recognised, after a very long struggle in this House and in the other place, that authors should be compensated for their books that were being borrowed from libraries. So we now have a very reasonable and good system whereby, if you go to a library and borrow a book, that is clocked up by means of a computer and at the end of the year some money goes to the author for the use of his book. Nobody in this House would disagree with that principle. It is perfectly fair.
But you can go to the same library and get a videotape. You do not get it free. You actually pay money to the library to hire that videotape or that audiotape and the author gets nothing. The composer gets nothing. Nobody gets anything from it except the library, which makes money from it. I am not criticising libraries. I love libraries and I think they are perfectly entitled to hire out these tapes. But it is absolutely wrong that you should be able to take a book out and the author gets something from it, but if you take that same book, which has been dramatised, adapted and developed for television and put on a videotape, the author gets nothing. So I 1496 think that the Government should look again at this point, and there should be a rental right, not paid for by the Government but paid for by those who make money by hiring out videotapes.
In other countries they have solved the problem by licensing video shops that let out these tapes. The same could be done with libraries, and a percentage of the money that they take could be paid to the collecting societies of the authors, the publishers, the musicians and so forth. There would be no problem. I hope that the Government will consider that.
I should like to make just one or two very brief points. As regards Clause 35, I certainly do not think that educational establishments should have the right to record without payment if there is no licensing scheme in operation. I should like to ask the Government a specific question. Is this proposal not contrary to the Berne Convention? Will the Government not be contravening the Berne Convention on Copyright with Clause 35? Clause 130(4) empowers the state to impose a licence fee free of royalty. That would penalise copyright owners. Is that also not contrary to the Berne Convention?
I come to a more serious point, the problem of the first ownership of copyright. The first ownership of copyright must clearly and logically lie with the creator, but the Bill proposes that the employer is the first owner in the absence of any agreement to the contrary. I ask your Lordships to imagine what this does to a writer who is on the staff of a television, a broadcasting or a film company. He is actually on the staff and is being paid a salary. According to the Bill, the copyright of anything that he creates will be owned by the company and not by him. I think that that is not only contrary to moral rights; it is contrary to the Berne Convention.
Copyright by its very nature is intended to protect the creator. In fact the White Paper said:Moral rights will be independent of the economic rights and will be exercisable only by the author".What is in the Bill is a direct going-back on what was said in the White Paper. I urge the Government to look at that again, because the proposals as they now stand would penalise writers who work on the staff of advertising agencies, film companies, television companies and so forth. They would penalise photographers, artists, designers and a whole host of other people.
Photographers in general have been given a very rough ride in this Bill, because Clause 12 singles them out for some really special treatment by proposing that copyright in a photograph should last not 50 years from the death of a photographer but 50 years from the year when a photograph was taken. I find that incomprehensible. Why have the Government chosen to treat photographers differently from authors and other people? What is the reasoning? There is no reasoning in the Bill. I should like an answer to that point. Why is there different treatment?
I ask the Government to look again at Clause 192, because subsection (3)(c) seems ill-conceived. It can only benefit the pirates and the barnacles who contribute no design or technical input of their own. That could have serious economic consequences for 1497 organisations which have spent huge sums on design development in that they may have their product stolen. A classic example of that is the motor industry. I am told that the Ford Motor Company believes that, if the clause goes in as it stands now, it will lose a large number of jobs and sales and its business will be seriously affected. I should like the Government to look at and comment on that matter.
I have briefly picked up a few points which we shall return to. However, I have also asked several specific questions and I should like the Government to reply to those. Above all, I hope that the Government will think seriously about the levy on blank tapes.
§ 5.12 p.m.
§ Lord Hutchinson of Lullington
My Lords, I follow the noble Lord, Lord Willis, with a great deal of humility, knowing what an enormous contribution he has made towards getting the Bill on the statute book—if it actually gets there. It has already been said that this is a massive Bill and that it is larger than the Criminal Justice Bill. I think it is worthy of a mild protest that it was published on 28th October and is now having its Second Reading in less than two weeks. No outside organisation has had a proper amount of time to judge or comment on it. Nevertheless, it is a most welcome Bill. It seems on a quick reading that it has a greater clarity and orderliness of drafting than was shown in the Criminal Justice Bill.
I shall confine my observations to those provisions in the Bill which affect the authors of artistic works as defined in Clause 4, which concerns visual artists and architects. I wish to judge that area of the Bill with two statements of principle in mind. First, Article I of the Berne Convention states:The countries to which this Convention applies constitute a union for the protection of the rights of authors in their literary and artistic works".Secondly, paragraph 16.3 of the Government's White Paper states:Variations from the simple fundamental principle that the author owns copyright are justified only when convenience and national justice clearly point in this direction and where the exception can be expressed in clear and unambiguous terms".We are thus concerned with the persons who create the work and not with the works themselves and with the expression of ideas and not ideas as such. Clause 11 is the central clause in that area. Clause 11(1) is to be welcomed when it states:The author of a work is the first owner of any copyright in it",largely for the things that it does not say. By that I mean that clearly copyrighting commissioned work is not made an exception and it will henceforth be owned by the artist who created it. The Whitford Committee was split on that matter and the White Paper seemed to favour the status quo of the exceptions set out in the old Act, which should perhaps be called the Lord Broxbourne Act. I should like to congratulate the Government on that decision and give great credit to the Arts Council, which fought so hard for the rights of the artist in that area.
1498 Clause 11(2) is disappointing. Copyright in creative work by an employee in the course of his employment remains the property of the employer. That preserves the effect of a long series of English cases whereby what a workman produces by the strength of his arm, the skill of his hand or his inventive faculty belongs inevitably to the person for whom he works. He must substitute the employer for himself as owner of all the benefits flowing from the performance of his contractual obligation. I cannot help feeling that we have now reached a stage in the relations between worker and employer when the onus should be reversed. Surely natural justice calls for that. It has been reversed as far as commissioned work is concerned; surely it should be reversed in this area as well.
At paragraph 560, the Whitford report said:Plainly the simplest solution to the question of ownership is to leave copyright where it naturally lies, that is, with the creator of the work, and leave everything else to contract".The law would then be perfectly clear and everybody would know where he stood. I say "Amen" to that. But alas, as so often happens with high powered committees, it was unable to endorse the simple solution. Nor does that solution occur in Clause 11(2), and that is much to be regretted.
Turning to moral rights, that is the English version of the droit moral as espoused by our European friends. As we have heard, it has to do with reputation and not with morality. Indeed, if the Bill had existed in 1928, D. H. Lawrence would have been entitled to identification when Lady Chatterley's Lover was first published, though I have some doubts as to whether he would have asserted that right in 1928.
Under Clause 76, moral rights continue to subsist so long as copyright subsists, whoever may at any time own the copyright. No matter what happens to an original work of art, the author has moral rights in regard to it for his lifetime. Those are the rights to be identified, not to have the work unjustly modified and not to have someone else's work attributed to him.
All that is excellent and it is to be welcomed. However, how do those rights become effective? They do so when the work is published or exhibited. But an infringement can be brought home to the perpetrator only if the right has been asserted to him in the manner set out in Clause 70. There has already been a reference to that matter. The person who fails to identify the artist has to be a person who has been personally bound by the artist's assertion if he is to be brought to book. What do the subsections in Clause 70 really mean on the matter of assertion? Subsection (2) states:The right may be asserted on an assignment of copyright of the work by including in an instrument effecting the assignment a statement that the author or director asserts in relation to that work his right to be identified".Is it envisaged that that document is passed on on each transfer of ownership of a work? Subsection (3) states:The right may also be asserted by an instrument in writing signed by the author or director".1499 Again, is that instrument to be kept by the artist? How will it be promulgated to all those who come by the work later on? Subsection (4) states:In either case"—presumably that refers to subsections (2) and (3)—the right may be asserted generally".I find it very difficult to understand what that means. How can you assert a right generally in relation to a specific work? Again, how is this going to be promulgated to future persons who come into possession of the work?
The exhibitor in the gallery or the museum or the editor of a periodical has no obligation whatever under this Bill to the artist unless he has been personally bound. One asks how the artist can do this when he may produce hundreds of works over the years disseminated countrywide or indeed worldwide.
I ask why this distinction is made between the artist's right to protect his property and the artist's right to protect his reputation? Should not the onus be placed squarely on the shoulders of the consumer in both cases? I wonder whether the Minister can enlighten us as to exactly how it is thought that the provisions of this clause are workable. What are the artist's remedies if there is an infringement under Clause 93? He may obtain damages, but, where the ground is failure to identify, only in so far as he has suffered economic loss. I think it has already been said that moral rights are not geared to economics; they have to do with reputation, as the noble Lord, Lord Morton of Shuna, pointed out.
If, for instance, the artist enters the Tate Gallery and is confronted at a major exhibition of British art with a great sculpture in the main hall and it is also illustrated on the front of the catalogue and there is no mention that this sculpture has been made by its creator, the artist, what does he suffer? He suffers a great injury to his reputation but he suffers absolutely nothing to his pocket. If, on the other hand, he walks into the Tate Gallery and there is a great work of art, a sculpture, in front of him which is by another artist and if in his view it is by a third-rate artist and it has been wrongly attributed to him, then as far as I can see under Clause 73 he can recover damages even though the visitor might think the piece of sculpture was supreme.
Perhaps the Minister can explain why there is this distinction between the three forms of moral right and why the Bill does not require damage to reputation to carry with it any economic loss at all. Cynically of course some might believe that the explanation is quite simply that within the philosophy of this Government, as with so much else, they can recognise injury only in terms of money.
I end what I have to say by mentioning two short matters. I regret that nowhere in the Bill is there provision for a resale right, or a droit de suite as it is called in Europe, whereby the artist receives a small percentage on each reselling of his work. A redress of this injustice would give the artist some benefit from a later recognition of the merit of his work. I ask the Minister whether this was considered by the Government and, if so, why it was rejected.
1500 Lastly I refer to Clause 58, which causes me a certain amount of confusion. It comes under "Miscellaneous" and it states:The copyright in an artistic work is not infringed by the making of another artistic work by the same author if in making the subsequent work he does not repeat or imitate the main design of the earlier work".Does this clause deal with the creation of a new work by the artist as opposed to copies of an original? It seems to me that copies appear to be covered in the earlier Clauses 16 to 18. It is presumably under those clauses that, for instance, casts from an original sculpture would be covered.
What copyright in Clause 58 are we dealing with? Is it the copyright which the artist has assigned to somebody else? Surely if that is so no artist can be restrained from creating numerous versions of the same theme. All through the ages artists have created versions of the same theme. Indeed, artists almost always become obsessed with one particular subject. I find Clause 58 quite incomprehensible. At the moment I cannot understand to what copy or to what second version it is supposed to refer and why it is sought to restrain an artist from creating a number of versions of the same theme in his work. The idea of an artist imitating his own earlier design seems to me fanciful in the extreme. I should be grateful for some elucidation on this clause.
§ 5.27 p.m.
§ Lord Mottistone
My Lords, I, too, would like to thank my noble friend the Secretary of State for the introduction of this vast Bill. I also welcome the Bill for bringing up to date the law on these subjects after quite a long time. There are many who say that perhaps the Bill is overdue. I like to think that there is much in it which is acceptable to a vast number of your Lordships. All of us can find some parts of it which need correction and I hope that those corrections will be made here. That is necessarily the case for a Bill of such size. One cannot expect it to be perfect at first sight.
I may have to ask the indulgence of your Lordships in general and of my noble friend Lord Beaverbrook in particular if I leave before the end of the debate to keep an appointment which cannot be forgone.
The range of the Bill is vast. I propose to limit my consideration to its application to computer software and industrial design. On these subjects I am advised by the Business Equipment and Information Technology Association and the CBI. The Bill naturally endeavours to be as up to date as possible. Indeed my noble friend the Secretary of State has said that it is. However, it needs to look into the future as well, especially if it will be another 30 years before the subject is again reviewed comprehensively.
This is especially the case in matters concerned with information technology where technical advances continue to come fast and furiously. There is no sign that this will end in the near future. Even though I am tackling a relatively small part of the compass of the Bill, I propose to touch upon only four aspects of my selected subjects. These are the protection of copyright works held in databases, importation of copyright works, a possible rental 1501 right for databases and the protection of industrial design rights.
There are several related matters which will in due course be the subject of amendments which I shall propose. Sadly, time does not permit their inclusion at this stage. Normally, I like inisters—one hopes that their attitude will be friendly—to know all my proposals at the beginning with a view to their being accepted. That is not possible on this occasion.
To start with and by way of example, I choose two problems faced by databases in the Bill. First, modern communications ensure easy access to computer storage, that is to say, a database. The information stored belongs to its originator in the same way that the text of a book belongs to its author. The author obtains royalties on the sale of his book. The originator of a database could reasonably expect the same. Thus, one might expect the Bill to provide for access to the database to be controlled and recorded in some way so that a royalty can be claimed in the way I described. However, Clause 17(7) appears to have the opposite effect because it says that viewing a work stored in a computer is not infringing copyright.
The second problem relates to the definition of a cable programme service in Clause 7(1)(a). This definition, by its phrasing, describes more or less exactly a database. Thus, unless steps are taken to correct such an interpretation, various consequential clauses, like, for example, Clause 63(1), might be argued as applying to databases to the detriment of the rights of their originators.
All copyright work, from books to sculpture—I hope the noble Lord, Lord Hutchinson, is not too offended when I refer to sculpture—can be described by a succession of binary digits and transmitted electronically with ease across national boundaries. It does not appear that Clauses 22 to 24 recognise this potential method of secondary infringement of copyright. It would therefore be good to make certain that those modern developments are reflected in all parts of the Bill where there might be an effect. My advisers and myself will do our best to unearth the places where modern technology could have an impact. I hope that the Government will do so, too. It does not appear to have happened yet.
Returning to the analogy of the originator of a database being as entitled to a royalty on his work as the author of a book, likewise in these modern times, he requires the equivalent of the recently introduced public lending right to which the noble Lord, Lord Willis, referred. No doubt the noble Lord agrees with this proposal. I suggest that the Bill needs to cater for that.
However, my last example will perhaps not appeal so much to the noble Lord, Lord Willis. It relates to the protection of industrial design rights. Comparing Clause 12 with Clause 195 one has the impression that a photograph might have a copyright for 50 years while an industrially produced holograph—perhaps an even greater work of art in its own way—might be lucky to have a design right for 15 years. More likely, it would be 10 years or, if I heard my noble friend the Secretary of State aright, only 1502 five years. This sort of discrepancy needs to be cleared up. In any event, a period of 10 years is far too short to provide protection for some industrial designs. Protection over 20 to 25 years is needed.
My noble friend the Secretary of State spent a long time explaining how he thought these time limits were right in order to ensure fair competition. But it is terribly difficult to make a difference between what people generally understand as art, talking about it in terms of 50 years, and industrial design which is perhaps not as appealing to everybody but certainly is as appealing to the experts for whom it is designed. The question of competition is a very difficult one to measure between the two examples.
In welcoming the Bill I look forward to endeavouring to persuade my noble friend the Secretary of State that it requires tidying up in relation to the subjects to which I have referred and, indeed, associated matters. The Bill must provide the necessary protection for high technology invention for many years to come.
§ 5.36 p.m.
§ Lord Ardwick
My Lords, I hope the noble Lord will forgive me if I do not follow him down that mysterious path where the binary digits are lurking among the databases. I am not even sure that I know what they are.
I must start by declaring a modest interest. I do some freelance journalism and I am a life member of the National Union of Journalists, which is concerned about the effect of the Bill on its reporters, writers and photographers. I intend to mention one or two of their concerns and also the anxieties of some librarians.
This is a long and difficult Bill—four or five Bills rolled into one. We must not blame the draftsmen for its complications. They are inevitable in a Bill which seeks to do justice between the individuals whose creative work it protects, those who produce or publish those works, and the reading, viewing and listening public. Perhaps we shall be able to clarify the Bill during its passage through Parliament so that, for example, writers and photographers can understand what their rights are and how they can be safeguarded.
Just before coming into the Chamber I was told that the department has issued a layman's guide to this Bill, but I could not find anybody who has a copy. I am now glad to see that at least one noble Lord has a copy. I thought my former colleagues sitting in the Gallery were better informed than some of us in the Chamber. I think that nobody on this side of the House has seen this very necessary explanation.
I welcome the Bill. I do not share the outrage of my noble friend Lord Willis or the noble Lord, Lord Lloyd of Hampstead, about the failure to put a tax on tapes. My noble friend Lord Stewart told me recently of a girl who boasted that her school had a Latin motto: "Audio, video, disco"! Most of us would hesitate to risk our arthritic limbs in a discotheque, but I believe that we are concerned with audio and video.
1503 A tax of 10 per cent. will increase the cost of a tape by considerably more than the nominal 10 per cent. and will be unfair to those of us who use tapes for purposes unconnected with music. For example, I tape important radio talks which I do not have the time to listen to, such as the analysis programme recently on the functioning of the House of Lords. I use tape to record notes and for language studies. The Government were right, after playing with the idea of taxation, to resist the alternate bulldozings and blandishments of the record companies and the pleas of some millionaire pop stars for social justice. I am sorry for the humble musicians, who have a terrible life, and I am sorry that we cannot find a way of rewarding them for their work which is recorded without authorisation.
I do not see it as theft. It is more like borrowing a motor car for a joyride. There is a difference between that and stealing a car, which I believe the law recognises. I can see it would be theft if I were to say to my neighbours, "Do not go to the cinema tomorrow. Come to my house and see a couple of video films. I will give you a nice cup of coffee in the interval and you will give me five bob at the end of it".
That would be theft. It would be theft if I were to record a product on tape and sell it to someone else. But if there were something on television tonight that I wished to see but was unable to see because I am detained here, it could be recorded on video—if I had the controls right, which I do not always do—watched in the morning and then wiped out. Where is the theft in that? That is what I do not understand.
I shall return to my union's problems. First, there are the photographers, who have already been mentioned. They are the only people who have copyright that expires, not 50 years after their death but a mere 50 years after the year in which the picture was taken. Thus, a photographer could within his lifetime lose the copyright of the pictures that he took as a young man. An elderly photographer today would have no copyright in the pictures that he took of the Abyssinian War, the advent of Hitler or the Spanish Civil War. They are historical pictures which may still have considerable value.
Another photographic problem arises out of Clause 30, which provides that fair dealing does not infringe any copyright in connection with the reporting of current events. The limitation of fair dealing can seldom apply to photographs. As a rule, the whole of a photograph is used and not merely a small part.
Journalists are worried about part of Clause 11 which makes their employers the first owners of copyright in anything they have written for their employers. After publication, articles are often syndicated by newspaper companies at considerable profit, and the journalists, compilers of crosswords or bridge problems and photographers have no rights in the syndication unless they have managed to negotiate a special contract. They would be weak parties in such a negotiation as the employer is already the owner of the copyright.
Authors are gratified that for the first time the moral rights of a group of people are to be 1504 recognised. In certain circumstances, their work may not be modified. So far, so good; and yet they fear the provision which permits that moral right to be waived. It would mean that the publisher or producer might stipulate that he would accept a work only on condition that the author's moral right to resist modification were formally waived. That would give the producer and the publisher too powerful a bargaining weapon.
Photocopying is the libraries' major problem. It has become easy. All those years ago when I was at primary school, teacher had to write out poems in special ink. That then had to be transferred onto what was called a jelly-graph. They tediously had to roll off each copy as it was needed. Today, photocopying is so swift, efficient and easy that it invites abuse. Most libraries have a machine which the public can operate themselves on payment of a fee. In appropriate circumstances, libraries can copy something for members of the public.
Under the Bill, licensing bodies are to be set up in the fashion of the existing Copyright Licensing Agency which has made agreements covering reprographic copying for school classes. "Reprographic" merly means the copying of printed matter. That body is soon to start an experimental scheme for universities. I think that it has already collected over £1 million from local authorities.
The Bill provides that the proposer of a licensing scheme may seek certification for educational purposes from the Secretary of State. The Libraries Association believes that certification should be compulsory for all purposes. What are needed, it says—it speaks from experience—are blanket schemes with simple instructions which avoid the need for the copier to consult lists of excluded items. It is dismayed by the Bill's provision of a free allowance for the copying of a mere 1 per cent. of an original over a period of three months. How could a library with a self-service machine monitor that percentage? How could it police the frontier, as it were, between culture and anarchy?
The Bill retains the concept of fair dealing and yet makes no attempt to define it. The Americans have a useful phrase for it. Their concept is fair use, which they define as a use which is considered not to damage the market of the copyright owners. I am told that in most developed countries the concept of fair dealing allows an individual to take a copy of one article in a journal, but in the Bill commercial research is excluded. What is commercial research, as the noble Viscount, Lord Eccles, asked? Today, an academic research project may have commercial links. What about the small businessman in search of information? Is he a commercial user? Who in a library is to decide that?
The Bill reaffirms a library's right to copy a reasonable proportion of material other than journals. Again, what is "reasonable"? At what point does the proportion cease to be not unreasonable and become the forbidden substantial part? Once there were guidelines, but they seem to exist no longer.
Finally, libraries want the responsibility for the use of self-service machines laid upon the individual user and not the library, so that the user operates the 1505 machine with all the responsibilities he would have if he bought a machine for use in his own house. The libraries claim that individuals should have that responsibility provided that there exist, alongside the machine, rules which tell the user what he may not do. That is a reasonable point of view.
These matters may not seem of great moment, but they mean a great deal to the people concerned. We must not in any way stint the time that we are willing to give to subsequent stages of the Bill. The consequent Act will be with us for many years.
§ 5.48 p.m.
§ The Earl of Winchilsea and Nottingham
My Lords, at this stage of the Bill I should like to confine my remarks to two subjects, both of which are of great concern to the record industry, and which are not contained in the Bill much to everyone's surprise. I should also like clarification from the Government on Clause 24 which the noble Lord, Lord Morton, mentioned. I shall return to that point.
The first of those two subjects is the levy. The second is concerned with record rentals. My first task is to compliment the Bill's drafters on the clarity of language that runs throughout its considerable length. Even I can understand it. I have an interest to declare. It is that of the record industry as a whole; and, in particular, that of the British record industry. That interest however is not expressed by any financial remuneration that comes my way from the industry. That is not the interest I have in mind. My interest is a long-standing one. It goes back 40 years or so. For all that time, I have been an avid collector of records. I suppose that I am one of the industry's best customers. I am certainly one of its most ardent fans. The quality and variety of the product is second to none in the world. For 15 long years the British phonographic industry has been campaigning for some kind of levy to be applied to blank audio tapes. This I fully realise is seen by some people as being unfair, a restrictive practice, a tax on young people, rough justice and unnecessarily bureaucratic. They may be right but I do not think so for the following reasons.
On the charge of its being unfair, I ask: unfair to whom? Presumably it is to the consumer. The truth of the matter is that all the record industry is asking for is a levy of lop on each 90-minute blank tape which costs about £1 retail. I do not consider that too great a burden for the blank tape importer to bear. There are no manufacturers of blank audio tapes in the United Kingdom; they are all imported. It may well be that the importer will pass this small charge on to the consumer. So what, my Lords? Nor do I consider an extra lop per tape too heavy a price for the consumer to bear in order to offer some return to the copyright owner to which he is legally and morally entitled.
Every time a record is copied a theft takes place. I agree totally with what several noble Lords have said on this subject before. Such theft occurs on a massive scale and there is not much that can be done about it, because to police it would be utterly out of the question. Therefore I suggest, as Mr. Preston of RCA 1506 Records said today in his admirable letter to The Times, that it is grossly cynical of the Government to leave this Bill unchanged in respect of tape copying and by dropping the levy which was mooted in the White Paper of April 1986. This is quite extraordinary. Noble Lords will remember that the levy was also contained in the gracious Speech earlier this year.
There are several viable suggestions as to how this levy could best be distributed. One of these would comprise a three-way split between the performer, the producer and the Musicians' Union, each receiving one-third. Therefore from every blank tape sold each would finish up with 3⅓p However, the Musicians Union would further divide its 3⅓p into two equal parts, one part going to the union and the other into a pool which could be used to fund musicians just starting out on their careers. I thoroughly support this idea as it is a positive and helpful commitment to youth and the development of undiscovered talent.
Another charge is that it is a restrictive practice. An absence of a levy places severe restrictions on to the flourishing British record industry. It has severe and far-reaching implications for the level of investment within that industry. Many people have an unflattering image of the average record producer. They are often seen to be "fat cats" sitting in plush offices in the West End living off the gigantic profits of the performers and artists in their stable of popular music stars. Nothing could be further from the truth.
However much some noble Lords may dislike—and often despise—the form of music that is popular today, there is no doubt that it generates enormous sums of money for this country. Twenty-five per cent. of hit records worldwide are of British origin. In 1985 British sales accounted for over £2 billion. Due to the massive success of British popular music, both at home and around the world, British popular music is effectively funding all other forms of British music, be it classical, jazz, folk or ethnic, as these last types of music are not popular and have a limited audience. Nevertheless, the record industry feels that these are very important to us as a nation, to our culture, and not least to maintaining our position as world leader in record production and sales in terms of both quality and quantity. Therefore in my view the music industry of this country needs protection, not protraction which I believe will result from a lack of a levy.
In 1985 the overseas earnings for the UK provided by the domestic record industry amounted to a staggering £400 million. The industry invests very heavily in new technology and it also invests heavily in new British talent. Last year this investment amounted to £40 million. It employs directly and indirectly 26,000 people in real, unsubsidised jobs. It constantly breeds new, small businesses in the form of independent record companies of which there are now many hundreds. Over £300 million is lost annually to the copying of records in the UK. The levy would produce a modest £6 million, and it would help.
Another charge often levied against a levy—if noble Lords will excuse the expression—is that it is a tax on young people. Yes, it probably is; but, again, why not? It is known that about 90 per cent. of all 1507 music copied on to blank tape is in the popular music field. Therefore it can safely be assumed that young people do most of the copying. Why should a copyrighted product be pirated on such a huge scale for free? No doubt when the Secretary of State for Trade and Industry retires from Government we shall all be treated to his memoirs—an event I, for one, shall look forward to. But I should like to ask the noble Lord how he would feel if his book was pirated by certain gentlemen in some far off country without a penny being paid to him in royalties? Not very happy, I imagine, my Lords. This applies to any noble Lord, or indeed anyone, and can be instantly arranged.
Let us look at the charge of rough justice. Perhaps it is rough justice; I would agree. But I feel that rough justice is better than no justice at all. We all pay a collective price one way or another for the actions of others.
On the charge of being unnecessarily bureaucratic I say that that is not so, my Lords. There is already in place an organisation which has been handling and distributing royalties for many years. In fact, there are two bodies that could easily cope with the levy on blank tapes: the Phonogaphic Performance Limited and the Performing Right Society. It appears once again that we shall be out of step with the rest of our European partners on the question of a levy. West Germany, France, Spain and Portugal have levies in place and operating. Belgium, Italy and the Netherlands are preparing legislation. There is a European Commission Green Paper imminent that will, without a doubt, propose a common system for all member nations of the EC. It is my opinion that the Government are being somewhat sly over the levy question. Could it be possible that for populist reasons they are ducking the levy issue? Then when the European Commission produces its long-awaited Green Paper the UK Government can hide behind Brussels and tell us all that it was not them that hoisted this evil on us; it was that lot over there. I am not very surprised that the Government went ahead with this Bill without waiting to see what came out of the European Commission.
Turning to record rental—this is a problem that has been touched upon very slightly—it poses a very serious potential problem for the record industry in this country. On first sight, I am sure that there are many noble Lords who would welcome and support the establishment of new businesses and enterprises, and that if someone wanted to open a shop specialising in renting records, especially compact discs, to people who could not afford to pay the retail price of compact discs (which currently stands at an average of £10) they would say, "Great; more power to them!"
I ask your Lordships to allow me to outline what this seemingly innocent commercial enterprise is all about. My remarks are based on knowledge acquired first-hand earlier this year on two separate trips that I made to Japan. The first of these trips was partially connected with the record industry. The second was totally on behalf of the industry and was specifically made to investigate the havoc that record rental shops have wrought on the international record industry in Japan.
1508 Since the introduction into Japan of the compact disc in 1983, nearly 4,000 record rental shops have been established throughout that country. Compact discs and their development represent probably the single most important technological advance that the record industry has ever made in its long history, going all the way back to Edison and the first gramophone. They possess three great attributes: the quality of sound is perfect, even to a layman's ear—it is quite remarkable. Secondly, they are almost indestructible. Thirdly, they are indeed compact. They take up very little shelf space when compared to the more common 12-inch vinyl long-playing record.
The research and development of compact discs represents a colossal investment made by individual record companies. Their production employs many thousands of people all over the world, a considerable number being employed in the United Kingdom. In Japan, foreign musical works receive limited copyright protection. In retail shops the period covered is 20 years from the original date of release. In record rental shops there is no protection whatsoever for foreign musical works. This perhaps is due to the fact that in a largely Buddhist society the product of the human mind is generally regarded as being for the benefit of society as a whole. But, to their credit, the Japanese Government have realised that this appalling situation has to be changed and they are currently working on their own White Paper which will give full protection to all Japanese and foreign musical works, both in retail and in rental shops.
On my last visit to Tokyo in May I went into three large downtown record rental establishments to observe what was going on. The experience was hair-raising and it is not at all difficult to see exactly the same operation taking place in Oxford Street or anywhere else. The repertoire carried was huge. Japan produces more compact discs than anyone else anyway. But even taking that into account, the shelves were far more extensively stocked than even the largest retail shop that I had visited. The shops were invariably packed solid with people renting records for the equivalent of 50p for 24 hours. It might be worth mentioning that one shop was organised like a large supermarket with a row of checkouts and cash tills. By the side of each cash till copying machines were available to copy the compact disc for an additional fee of roughly £1. These machines were the latest tape machines capable of reproducing compact discs to perfection. Also available at every checkout counter was a vast pile of the latest high-quality blank tape which a customer could purchase to make his copy. Having done this, the compact disc was returned to the shelf to await the next client—and there was never any shortage of clients.
The international record industry is losing millions of pounds' worth of revenue to these operations. The British share is roughly 25 per cent. of that, and our losses have been cautiously estimated at around £12 million per annum. Can I have an assurance that the Government will address themselves to this potential minefield and return at Committee stage with an additional clause to the Bill to prevent this sort of operation from taking hold in the United Kingdom?
1509 Finally, will the Government clarify what is intended by Clause 24? This has already been mentioned once, I believe by the noble Lord, Lord Morton. Whatever the intention, I submit that the interpretation will be that the clause effectively makes it illegal to sell, hire or import into the United Kingdom any tape recorder, particularly those having a twin-deck capacity, all photocopiers and duplicating machines—not to mention printing presses and photographic printers which can reproduce copyrighted photographs. All tape recorders are designed to do two things: one, to copy; and, two, to play back the copy. That is surely ludicrous, and I cannot believe that that is what is intended by the Government. I am sure I must be mistaken, but I should like clarification.
§ 6.6 p.m.
§ Lord Lucas of Chilworth
My Lords, as this is the first time that I have spoken in your Lordships' House since resuming my place on these Benches, perhaps I should declare commercial and financial interests in a wide area which are substantially affected by matters across the content of the Bill.
I too welcome the Bill. That welcome is tinged with a certain sadness that it has been a long time coming. Here we are, half-way through the list of speakers—in fact, we are now into the second half—and we have already identified that there are a number of areas in which clarification will be needed because the Bill is very technical and somewhat complicated. I fear that I shall not be able to relieve my noble friend on the Front Bench from even more demands for clarity and explanation.
I want quickly to turn to the Bill itself. I particularly welcome Clause 35 permitting educational recording. However, I take careful note of what the noble Lord, Lord Willis, and, to some extent, the noble Lord, Lord Ardwick, said in this regard because there may have to be some consideration as to licensing arrangements. I welcome Clauses 98 to 101, those which improve measures to combat copyright piracy, as I do Clause 272 relating to counterfeiting.
I ask my noble friend the Minister who is to reply whether those two provisions in the Bill, coupled with the intention to ratify the Berne Copyright Convention, will in any way strengthen the Government's hand in dealing with the great problems of international piracy and international counterfeiting, which were matters that came fairly high in the agenda of the recent Uruguay GATT round. If there is domestic resolve shown by the Government and this can be translated into negotiations in GATT, I believe it would make a considerable difference.
I want to turn now to Part III, which deals in Chapter I with design rights in original designs. Unlike the noble Lord, Lord Willis, I welcome this section, as do many parts of the retail motor industry, notably the Motor Factors Association, the Motor Panel Manufacturers and Distributors Association, the Vehicle Builders and Repairers Association, and others. They are particularly pleased, as I am, to see in Clause 192 exceptions to those industries provided 1510 for in subsection (3)(b) and (c)—the so-called "must fit" and "must match" exceptions. If the noble Lord, Lord Willis, were to debate those matters further I should be bound at that time to challenge some of the assertions he made in his speech this afternoon.
The exception provisions in Clause 192 will not only provide for a very much more competitive regime but will also lead to less expensive replacement parts and panels. They will also provide an opportunity for United Kingdom producers to compete more evenly and fairly in Europe, where the market is dominated by Italian and Spanish manufacturers, and give United Kingdom manufacturers an opportunity to stem the rising tide of imports from the Far East.
There are, however, some difficulties, particularly in Clauses 243 and 244, which deal with the transitional arrangements. In the first line of Clause 244 there is a technical error of which I believe the Government are aware. Subsection (2) provides that an existing registered design shall expire 10 years after the commencement of Part IV of the Bill, even though the current right expires before that 10-year period. So there is something of an anomaly here. In addition, there is an inconsistency in subsection (3)(a) in that the general principles embodied in Clauses 192 and 51 are cancelled out to an extent by the transitional arrangements. I shall want to return to that point at a later stage.
There is some rather odd drafting in these clauses. I refer momentarily to Clause 51, from which stems Clause 192, and thereby Clauses 243 and 244. Clause 51 states:It is not an infringement of any copyright in a work which is, or so far as it is, a design document or model recording or embodying a design for an article which is not an artistic work".I then turn to Clause 4, which defines "artistic works". It says:In this Part 'artistic work' means—(a) a graphic work, photograph or sculpture, irrespective of artistic quality".So there are some difficulties with Clauses 4, 51 and 192 which we may have to look at later.
I now turn to the part of the Bill that deals with the pharmaceutical industry. I refer specifically to Clause 266, which effectively deals with the repeal of licences of right. There is a long and tortuous history to this matter, going back if not to the Registered Designs Act 1949 then certainly to the 1977 Act and the European Patent Convention. The Patents Act 1977 came into force in June 1978. In retrospect, that Act was something of an unhappy compromise between the provisions of the 1949 Act, the European convention and that which a number of people particularly wanted. In the end, it was a mish-mash which satisfied nobody.
At a later stage in our deliberations I shall fill in the important statistics of that industry—manpower investment, sales, research and development, and so on—because when we come to that clause and the provisions for the repeal of licences of right it will be necessary to ensure that there is an absolute understanding of what the industry does.
In 1985, the then Secretary of State said that if the industry could prove an erosion in the effective time 1511 that its patents were running for a repeal would be inserted into legislation. This was proven and accepted in 1986 and subsequently efforts were made to implement the Government's intention. The industry had reasonably planned its future commitment to research on that basis. It is interesting to note that the United Kingdom was the only country in the Community which did not accede in full to the European convention of 1977.
This firm and oft-repeated commitment to repeal is now embodied in the Bill. That is laudable, but if the Government's commitment to the pharmaceutical industry is to be worth anything at all the repeal must be effective from the earliest possible date commensurate with fairness to all. That date is the date of introduction of the Bill in your Lordships' House on 28th October this year. To allow the effective date to drift even further—possibly even as far as the autumn of 1988—would be unjustifiable since the mischief the repeal seeks to remedy is continuing day by day. I hope that in later stages we may be able to agree the best way to remedy this mischief.
As the Second Reading of the Bill was brought forward at somewhat short notice from 17th November to 12th November, it might not be unreasonable for the government business managers to look at the timetable to see whether we can bring forward a little further than is currently proposed the first day of the Committee stage, which I believe is the 30th of this month. I hope that my noble friend the Deputy Chief Whip will urge upon his managerial colleagues some flexibility in their attitude on this matter.
§ 6.18 p.m.
§ Lord Perry of Walton
My Lords, I shall confine my remarks to a consideration of those clauses in the Bill which relate to the ways in which educational establishments are permitted to use copyright material for teaching and research. The intention of making special provision for educational needs is admirable but the practice as currently defined falls perhaps a little short of that standard and I hope that it can be suitably amended at a later stage.
Education has two main needs. First, it needs the ability to record broadcast material off-air and to show it at a later date to students. Secondly, it requires the ability to distribute copies of the textual material to students. Neither of these actions is done for commercial gain. The first of these needs arose, in my experience, when the Open University first started to operate, because a large number of other educational establishments in the country wanted to record Open University broadcasts for subsequent use.
Even if our Open University students were prepared to get up at 6.30 a.m. in order to watch the broadcast, such unsuitable hours were not available for teaching classes in conventional establishments. On the other hand we felt that it was wholly desirable that they should be free to make such recordings and to use them at a later date, because we believed that this could only improve the overall standards of education.
1512 What actually happened was that we devised a system of blanket licences on a voluntary basis whereby any educational establishment for an annual fee—not a large one—was free to record off-air. The stipulation was that the recordings be deleted after 12 months, and this was intended as a protection to the authors against the possibility of license holders continuing to use material already discarded by the authors at the Open University as out of date. An agency was established to collect the licence fees. This, I am glad to see, is in essence what the Bill proposes for educational establishments in relation to recordings of broadcasts, and I hope that it will present no particular problem.
The position in relation to the copying of textual material is unfortunately not so good. It would be much better if this too were handled by a similar system of blanket licences. Clause 32 of the Bill allows copying of textual material by teachers or students, but only if it is not done by a reprographic process. It is a futile waste of time and energy to copy these days by any other means, and it achieves nothing whatsoever. What is needed is a clause that permits reprography when there will be no damage to the copyright owner's economic rights.
Let us assume just for a moment that I have written a book that is adopted as a set text for a university course. I and my publishers can expect that many students will buy a copy, and we shall collect the royalties. The university, however, decides also to issue students with reprographed texts. These will never be the set book. They will usually be extracts from learned journals of articles written on a similar subject, and I myself may have been the author of some of these articles so chosen. But neither I nor any other author of such an article is normally paid for writing it; we do not get a royalty on it, but we get a royalty on books.
If the university is forced to pay heavy royalties through a licensing system for articles—and the current rate of the Copyright Licensing Agency is, I understand, 2.4p per page per copy—these large costs would be passed on to the students, and as your Lordships well know students have limited funds. If they pay a lot of money for copies of articles that are passed out they will not have so much money to buy my book. There will be a redistribution of student purchasing money away from me and my book publisher and in favour of the publishers of the journal.
Since the price of many journals is already grossly inflated because it is expected that these articles will be photocopied, the publishers of the journals will make a killing twice over. But I, as an author of the textbook and of the articles, get even less reward for my efforts, and it is not sensible. Let me quickly say that I am not in the position of earning any money from either at the present time.
On the other hand a blanket licence at low cost permitting reprography of a defined range of articles from journals, or of short extracts from other publications, could achieve the same reasonable compromise that is used for off-air recordings. I hope very much that the Bill can be amended in this respect.
§ 6.25 p.m.
§ Lord Denning
My Lords, I should like to give the Bill the most enthusiastic welcome and my unqualified support. During my life in the law I have been much concerned with copyright. In my chambers when I was a junior at the Bar I had as a pupil one John Whitford. That was 50 years ago. I am glad to say that 40 years afterwards he presided over this important committee which dealt with all the problems of today in an exemplary manner, its recommendations forming the basis of the White Paper which in turn formed the basis of the Bill before your Lordships. Indirectly, through my pupil, I have had some connection all the time with the present Bill.
Intellectual property is one of the most important property rights to emerge this century. It has not been founded on the common law. It is entirely founded on statute passed by Parliament; first, the Copyright Act 1911, and then the Copyright Act 1956 with which my noble friend Lord Broxbourne had a good deal to do, very effectively. However, in the last 30 years, there has been a revolution brought about by modern technology.
Copyright gives the author the sole right to make copies of his work or to reproduce them. What happens to that right when copies can be made by a machine running off a thousand at a time? The composer is the first owner of the copyright in a piece of music. No one can reproduce it without his consent. What happens to that right when it is put on tapes and played in every home and the like? You can see at once how important are intellectual property rights, and how they should be protected in support of the owner but also bearing in mind the user.
Take, for instance, the vexed question of tapes made at home. Of course, the owner, or anyone for him, cannot prevent what is done in the home or in the university. He cannot sue for any infringement of his copyright without permission. There is no recourse in that way by the owner against the home user, the educational user and the like. The Whitford Committee followed by the White Paper suggested, "Let us have a blanket fee when equipment is supplied—so much per cent. on the equipment or the tapes payable as a fee irrespective of whether it is afterwards used on a particular copyright or not." Mr. Justice Whitford saw no other way of getting any reward or more remuneration for the owner of the copyright for all his work that was being reproduced.
That step, taken in Germany, was approved by Mr. Justice Whitford's committee and the White Paper. Now the Government have said that they do not think it is a practical proposition. I can see a good deal in the Government's answer; they may well be right. However, the matter will be raised in debate at a later stage of the Bill. It is one of the most vexed questions that will arise.
The next provision of fair dealing in connection with the work is admitted by our present law. In America it is known as "fair user". It can be used for the purposes of study or research. But the Bill goes on to state:except for commercial research1514 The person who uses it for commercial research will have to pay. Is that a practical proposition? My noble friend Lord Eccles referred to his father writing a scientific article. My son at Oxford writes scientific articles and I am sure that he does not mind anyone using them for the purposes of research, commercial or not. The provision of fair dealing needs to be considered further.
The question of moral rights intrigues me. In the English language, to talk about moral rights is almost a contradiction in terms. We know in law what is a legal right. As to moral rights, we are speaking of something which cannot be enforced in law. I do not like the title "Moral rights". It comes somewhere from the French. On the other hand, a good and new right is established by the Bill, enabling the author to have stated on the reproduced work that it is that of Mr. A., Mr. B., or whoever. His name appears on the work; it is attributed to him; he is identified with it. It is a right that he should have. It should not be whittled down by the qualification that he must first claim it. An important new right is being introduced into our law.
I am also pleased to see the rights of the performers. In court cases the performer on the stage, or playing music, had no right to protect the material himself. He was merely the player; he did not write the music. He was protected by the criminal law but that provision has been removed and the performer's right is now recognised in law in terms equal to the ordinary copyright in writing. That is another important new right introduced into our law.
I shall not go into further detail. I should like to say that this is a good Bill which brings our copyright, designs and patents law up to date in a way that I hope will last for at least another 30 years and guide our destinies during that time.
§ 6.34 p.m.
§ Viscount Brentford
My Lords, in welcoming this Bill I am intrigued by the fact that my grandfather was involved in the debate in another place on the 1911 Bill. However, I have not checked Hansard to discover the difference between what he argued and what I shall say today.
I should also point out that my partner, Rosina Harris, served as a solicitor on the Whitford Committee with the ex-pupil of the noble and learned Lord, Lord Denning. Therefore my firm has had a number of dealings with the law of copyright and it is on the subject of copyright that I shall be addressing the House.
As has frequently been said, this is a large and complex Bill because of the changes in technology that have taken place over recent decades. It is vital that the Bill strikes the right balance between the legitimate interests of the creators of the copyright on the one hand and the users and consumers on the other. The difficulty arises in striking that balance. The earlier Bill was called an authors' charter and, as the Minister said in his opening speech, this Bill tends to favour the user and consumer much more.
It is important to remember that the creators of ideas and other forms of expression covered by copyright must be encouraged. We need their cultural 1515 contributions to enrich our lives. The country also needs the economic benefits that arise from their work, including foreign earnings. Therefore they must be encouraged to carry out their work and exercise their gifts, and to do so in this country. International conventions emphasise the author's exclusive right of licensing the use of his works. The law of the UK cannot conflict with that right and nor must we prejudice the legitimate economic interests of authors.
I should first like to mention the exemptions in Chapter III, because they appear to be broader than in the earlier copyright legislation. A copyright owner does not receive equitable remuneration from those exemptions. The use of the exemptions has been argued in the debate and I am not questioning it; I am pointing out the fact that they appear to be broader and we need to recognise that.
I also have fears that the commercial exploitation of exempted copies could follow from this, and that possibility must be clearly prohibited by law. Why should a library be able to rent out videos and records without paying any fee to the copyright holder? That contrasts with the system of public lending rights for books. In that case the author of the book receives a royalty but in the case of a video or record there is no such remuneration for the owner of the copyright.
I should like to point out, as has already been said, the ease with which a record, particularly a compact disc, can be copied in the home while being rented from the library over a weekend. That provides no benefit for the copyright owner or the library. Exemptions for education proposed in the White Paper were in the context of the blank tape levy. Without a blank tape levy there is no remuneration for authors or composers.
I turn to deal with the first of the two major omissions from the Bill. The first concerns home taping. In the White Paper the Government concluded that copyright owners and performers should be remunerated for the use of their material by those who tape it at home and that there was no realistic alternative to a compulsory levy on blank recording tapes. On 25th June the press office at 10 Downing Street announced that the Bill would:legalise home taping in exchange for a 10 per cent. levy on blank audio tapes".I understand that the department has been given details of the way in which the scheme could be administered and the levy distributed without undue cost and with no expense to central funds. That is always an important point in the Government's consideration. A system of rebates could also be devised for those registered as blind. I ask the Minister, when replying, to state his view on the commitment already given by the Government and to say whether any amendments of that kind are to be considered.
Then there is the question of rental, on which I have touched. The renting of videos, films and sound recordings is an established commercial activity. Can the Minister say why this country should not follow the example of the United States and Japan and make rental a restricted act? With an ever increasing volume of sophisticated hardware available for use in 1516 the home it is both just and fair for the Government to legislate in these areas. The aim must be to establish the right balance between the creators and the public interest. This will not be achieved by continuing to permit the public to record at will or by allowing equipment manufacturers to ignore copyright.
With those thoughts in mind and with amendments along the lines that I have indicated, the Bill is to be most warmly welcomed.
§ 6.41 p.m.
§ Lord Kilbracken
My Lords, like every noble Lord who has spoken so far in the debate, I must start by declaring an interest, having earned my living almost exclusively for exactly 40 years by creating, to use the language of the Bill, "literary and artistic" works which in my case mean books, articles and photographs whether as a freelance or, less often, as a staff reporter. The employer who owned the first copyright in everything that I wrote when I was a staff reporter for some years was the grandfather of the Minister who will reply to the debate. I confine my attention to Part I, which to a great extent restates the existing law of copyright but with certain significant changes, and in particular to its impact on writers and photographers.
The Bill is supposed to make the law more logical and consistent than before; but in this I fear that I cannot share the feelings of the noble and learned Lord, Lord Denning, who gave it such an enthusiastic welcome, because I do not find it to have been particularly successful. Many apsects of its drafting I find unfortunate. I shall delay any comments on this until Committee stage.
I mention now that I find it curious that in this age of high technology there should be references to something called "wireless telegraphy—a phrase that I cannot remember using or indeed hearing since I left the Navy in 1945—and even to "moving pictures", which seems to belong to an even earlier era. Even Part I of the Bill deals with a very large number of exceedingly diverse matters, and I find it difficult to speak in the general terms that are supposed to be employed on Second Reading. I have three of four specific matters to which I wish to draw particular attention.
The first is the definition of "author" in Clause 9. It is the author of course who is the first owner of the copyright in a work—the book, the picture or whatever it may be—so this is a matter of importance. We are told that the author is the person who "created" the work; but what is meant by "create"? In the case of a book, the first owner of the copyright should certainly be the person who wrote it and no one else—but can he be called the sole creator of the book? We are given no guidance, and the question does not arise in the present Act. How about the printer of the book, the editor and even the binder of the book, who all take part in the creation?
In the case of a photograph, it is even less clear because the cameraman is the person who should own the copyright; but he may do no more than expose the film, which he may then send undeveloped for processing. No picture exists, no picture has been 1517 created, until it has been developed and, if it is a black and white negative, printed.
As for a motion picture—or should I say a moving picture?—we are told that the creator is,the person by whom the arrangements necessary for the making of the recording or film are undertaken".Who on earth is this person? Is it the director? Is it the producer? Perhaps it is the producer's secretary, her assistant or her PA. Many individuals undertake the arrangements necessary for making a film. The question of the definition of "author" needs to be clarified.
My noble friends Lord Willis and Lord Ardwick have both referred to Clause 12, in which the copyright in a photograph under the Bill would expire 50 years after it was taken. The injustice of this was mentioned by both my noble friends. However, they did not mention that this injustice exists already and has existed at least since the present Act became law. The photographer has always been under this disadvantage in that the copyright expires 50 years after the picture is taken, not 50 years after he dies. The copyright of a photograph under the Bill would expire 50 years after it was taken. Under existing legislation, it is 50 years after it was published. That period is to be made somewhat shorter, therefore, perhaps only by a day or two, perhaps by several years, and pictures that have never been published are included in the exemption for the first time. Although this is a continuation of something that is wrong at present rather than a new injustice, I believe that photographs should be put on the same basis as other copyright works.
I wish to draw attention to Clause 25, which deals with secondary infringement. This is a new provision; it does not exist in the present Act. I cannot believe it to be right. It states that:The copyright in a … work is infringed by a person who permits a place of public entertainment to be used for a performance which infringes the copyright in the work".However, it continues to permit the defence that the person responsible did not know and had no reason to believe,that the performance will infringe the copyright in the work".It has always been the principle that ignorance of the law is no defence. I see no reason for exception here. There is great danger also in the further defence permitted that there was no charge for admission or that the charge was no more than would cover expenses. This means that I can take the Albert Hall, fill it with an audience and put on a performance of any copyright work that I like without paying or even notifying the authority providing that the price that I put on the ticket is no more than will cover the cost of renting the hall, the cost of the performance, and so on. I do not feel that that can possibly be intended.
Finally, I wish to refer to Clauses 29 and 30, which concern fair dealing. It is a matter that has been mentioned before, but for no good reason that I can imagine it has not been pointed out that artistic works are for the first time included in the provisions. Artistic works are not covered by fair dealing under the existing Act.
1518 Often, perhaps usually, the artistic works in question will consist of photographs. I do not see how photographs can possibly come within that concept of fair dealing. However that may be, surely it should not be the case that the use of a photograph for the purpose of reporting current events—as the Bill puts it—should be an occasion on which fair dealing should apply. That seems to be so obvious that I think a drafting error must have occurred. I should be grateful if the Minister would elucidate that matter when he replies.
§ 6.50 p.m.
§ Lord Auckland
My Lords, today your Lordships have been called on to give a Second Reading to a Bill which contains 277 clauses and seven schedules and which was published just a few weeks ago. A formidable task faces your Lordships' House in the future stages of this Bill, which may prove daunting even to those Members who are lawyers and directly concerned with copyright and patent law.
I must be one of the very few speakers in this debate with no interest to declare. I do not own any record companies nor am I an author or anything of that kind. I confess to your Lordships that I have never in my life taped a record. For a 25th wedding anniversary present, the children gave my wife and me a music centre. As a music lover and former chorister, I am an avid collector of gramophone records and I also possess a few tapes, though not of course blank tapes.
I approached this Bill with an attitude which may perhaps be termed somewhat machiavellian, or piggy in the middle, if you like. One has to sort the wheat from the chaff. There are two points of view: one held by those who are concerned with the record industry and the other held by those who are the consumers. I approach the Bill primarily from the point of view of the consumer.
It should be borne in mind that when the 1956 Copyright Act was passed, just a year before I entered your Lordships' House, there were no videos, no tape recording and, I think I am right in saying, no stereophonic records. I believe that all long-playing records were monophonic. As regards recording, this Bill is the first in the modern technological age to come before your Lordships' House. So far as concerns the record industry, and recording on blank tapes—I shall confine my remarks to that issue in the Bill at this stage—first of all we must consider the ordinary consumer who entertains a few friends at his house and tapes merely for home consumption, in contrast with persons who tape for commercial purposes, which obviously means for pirate purposes. It may be that the present law is an ass and that much of our legislation may be so described but we should be trying to educate young people into an appreciation of the arts and particularly, I hope, music.
It seems to me that home taping for domestic purposes only when done in one's own home creates a very different situation from that obtaining in the sphere of rental. I believe that the record industry and other industries concerned with the arts have a very strong case to make in that respect, because if a video 1519 recorder is being rented for, say, four weeks and indiscrimate taping takes place, then surely piracy is involved.
There are many anomalies created. For example, I imagine that many people taped the Royal wedding that took place recently. At that wedding, the splendid singer Felicity Lott sang an anthem or two very beautifully. My noble friend the Minister will correct me if I am wrong, but my understanding is that it is illegal to tape Felicity Lott or my good friend Kiri Te Kanawa, who sang at the wedding of the Prince of Wales, because they are under contract to a recording company and it is fair that such recordings should be copyright. Obviously that is something that those who are better versed in this matter than I am may well have to consider when the Bill goes through its Committee and remaining stages.
§ Lord Willis
My Lords, may I ask the noble Lord whether he would condone the non-payment of television licences?
§ Lord Auckland
My Lords, I defer to the noble Lord, Lord Willis, who is much more experienced in this matter than I am; but, with respect, the House is discussing a rather different situation. A television licence is valid for only one year. However, no doubt we can pursue that point during the further stages of the Bill.
If the levy is introduced, a question arises as to how the artists will benefit. I think that the noble Earl, Lord Winchilsea, raised an interesting point when he mentioned tripartite allocation of the levy. Even in that case, however, it seems to me that the artist will receive a very small slice of the cake. It may well be that "levy" is an unfortunate word to use, because it is one that is regarded with cynicism. It gives the impression of a tax—which obviously it is—and people do not like paying taxes. It might help if another word could be substituted.
Finally, I turn to the position of the handicapped members of our society. I wonder whether my noble friend the Minister, if not now then perhaps at a later stage of the Bill, can give an indication of what will happen in the case of blind people. My understanding is that blind persons use blank tapes for a number of purposes other than recording music. I cannot see anything in this very large Bill—though I must confess that I have not had time to digest all of it—that will help the blind. Near to the place where I live in Surrey is the Royal institute for the blind. I have not consulted that organisation about this Bill but I feel that an aspect which needs to be considered very carefully is its impact upon blind people.
At this late hour and with other speakers to follow, I shall not delay your Lordships further. I sympathise with my noble friend the Minister in the mammoth task that is before him, but I believe that it is essential for your Lordships' House to give this matter a very thorough airing when the Bill goes through its further stages.
§ 7 p.m.
The Earl of Stockton
My Lords, may I congratulate the Government on the Bill before your Lordships' House. The general re-shaping of the law of copyright into a logical framework and in plain clear language is welcomed by all connected with the creation, dissemination, and protection of intellectual property
As the chairman of a publishing company of both books and learned journals which, I assure the noble Lord, Lord Perry of Walton, do pay their contributors, and a member of the Council of the Publishers' Association, I have an obvious but, I trust, not conflicting interest.
May I also thank my noble friend the Secretary of State for his masterly exposition of what is a complex and highly technical Bill. The importance of the major copyright industries—literature, music, sound recording, films and video, broadcasting and the theatre, architecture, computers and functional designs—cannot be over-emphasised. For they contribute almost 7.5 per cent. of GDP. As Jennifer Phillips, author of a study, The Economic Importance of Copyright, put it in 1985:The major copyright industries taken together form a substantial part of the economy, greater in size, as conventionally measured by value added, than any manufacturing industry, including food, drink and tobacco or the motor industry.It is therefore vital that everyone, not just lawyers, should understand their rights and obligations in copyright law. The role our society gives to copyright is to stimulate creativity and to protect investment in that creativity so that authors of all kinds, and their various business partners, are encouraged to create, produce and publish on behalf of us all.
As my noble friend Lord Brentford pointed out, the protection of such creativity is the protection of a national asset. So the House, I am sure, agrees that copyright is dramatically significant. The effectiveness of copyright depends on the interaction between the state of the law and the state of communication technology.
The revolution that has taken place in communications since the Acts of 1911 and 1956 has been spelt out by my noble friend Lord Auckland. Now 30 years on, we must ensure that this Bill locks into the technologies of today and anticipates at least some of the developments of the early part of the 21st century.
Notwithstanding the strictures of my noble friend Lord Aberdare in the debate last week on the workings of your Lordships' House, I hope I may be permitted a last Back-Bench canter through those parts of the Bill which are of particular interest to the book and learned journal industries. I must here pay tribute to the invaluable assistance of my colleagues in the trade and their organisations, in particular Mr. Charles Clarke of the Publishers' Association, as well as many individuals whose experience and expertise have already proved invaluable.
In Chapter I of the Bill the publishers of software welcome the unequivocal placing of the computer program as a literary work in Clause 3(1). It also recognises the special nature of the program in, for example, Clause 21(4) which concerns acts of 1521 adaptation. It may be that access to a programme through a VDU should also be restricted by copyright, with possibly appropriate fair-dealing exceptions. I would draw the attention of the noble Lord the Minister to the views of the Australian Copyright Council. I quote:It is illogical that hard-copy computer print-outs have the potential for infringing copyright, whereas visual displays which perform precisely the same function, and convey the same information, do not.The recognition in Clause 3(1) of a "compilation" as a literary work is important, for it accepts the concept of recognition in copyright of a database, as referred to by my noble friend Lord Mottistone, and the far-sighted incorporation of computer-generated works in our copyright system will allow investment in artificial intelligence systems, in the future, to be made with confidence.
In Clause 11, I have to welcome the retention of the prescription in favour of the employer as the first owner of copyright works made by an employee in the course of his or her employment. Unlike the noble Lord, Lord Ardwick, I saw nothing wrong in this when I was writing for the Daily Telegraph and was happy that the copyright in my words belonged to my noble friend Lord Hartwell—for all the good that may have done him. The position of the freelance, or independent self-employed writer, is different. Such copyright properly belongs, in the first place, to the writer who has, in the words of James Cameron,preferred the putatively higher rewards of the 'trottoir.' over the dubious security of the 'maison clos'".This is a matter to which I shall return when considering moral rights under Chapter IV.
In Chapter II, relating to the rights of copyright owners, I must congratulate the Government that at Clause 27(3) they have enshrined the reversal of the Charmdale decision. At the same time, I must express serious concern at the premise of subsection (5) of the same clause. It could hardly be more unhelpful to British publishers, and authors alike, for the Government to incorporate into the Bill a proviso which may cut the ground from any attempt to persuade the EC that the British book trade needs special treatment. It is the only world language book trade in the Community which is faced with an alternative manufacturing and publishing trade outside Europe.
The American trade is capable of flooding, and is ready to flood, the UK market with its editions imported from, say, Holland, in accordance with the EC dogma of "free trade within member states" and in flat defiance of UK publishers' licensed territorial rights.
I can hear the Minister say that this Bill, when enacted, will be liable to be construed within the ambit of the European Communities Act 1972. But that Act will not take effect as part of any domestic, regional, or international copyright law, and I can see no justification for incorporating in Clause 27 "free trade area provisions" which are not framed in copyright at all. I urge my noble friend the Minister to consider this point when we come to Clause 27 in Committee.
1522 The provisions made in Chapter III on acts permitted in relation to copyright works does, on the whole, balance very fairly the interests of the copyright owners with those of the copyright users. In particular, I welcome the firm intention of the Government to exclude commercial research from the ambit of fair-dealing under Clause 29, and in this I have to differ from my noble friend Lord Eccles. The cost of photocopying articles in specialist journals is simply another cost like that of heat, light, salaries or equipment that is reflected, ultimately, in the price paid by the customer.
No publisher of specialist journals seeks to impede the flow of research information and knowledge. It is simply that, as the Government have recognised, research for commercial purposes ought to be paid for. How that is done, at what rates and with what safeguards for security, is a matter for negotiation between the relevant collective licensing agency—here the copyright licensing agency—and the relevant representatives of industry. I would assure my noble friend Lord Eccles that the record of the copyright licensing agency far surpasses its opposite numbers in the United States in both speed and efficiency. A major purpose of Chapters VII and VIII of the Bill is to facilitate such negotiations and to have the new copyright tribunal in place for dispute settlement.
I also welcome the fulfilment of the pledge by the Government in the White Paper to exclude systematic copying from library privileges, embodied in Clause 40. However, I feel it is vital that the substance of subsection (2) of that clause must also be incorporated in the "fair-dealing" provisions of Clause 29, especially if subsection (3) of that clause is to stand as part of the Bill. Clause 29(3) will otherwise open the door to widespread abuse of the fair-dealing provisions. I hope that my noble friend the Minister will address himself to this inconsistency at the Committee stage. Incidentally, I think it is fair to point out that the American concept of fair use is very different from fair dealing as outlined in the Bill.
It is not my intention to oppose in principle the incorporation of the moral rights of paternity and integrity into UK copyright law as laid out in Chapter IV. However, I must tell your Lordships that I have some reservations. If publishers feel uneasy with the practicalities of moral rights, their unease does not concern the seeking of waivers in contracts with authors of commissioned typescripts as much as the seeking of waivers in contracts with freelance writers, with "ghosts", with contributors to composite works and with editors and rewriters.
Of course, the right of waiver, referred to by the noble Lord, Lord Willis, is essential to the practical working of moral rights. Further, whatever accords may exist between individual writers and publishers, I know that I speak for the publishing trade when I say that I can see no sense in the right to paternity being available for employees. I have to differ from the noble Lord, Lord Hutchinson of Lullington, on this point.
The terms of paragraph (b) of Clause 73 should be applied to cover the right of paternity as well as the right of integrity with consequent amendment to Clause 71. Publishers of composite works, such as encyclopaedias and other works of reference, partly 1523 or wholly written by employees, are as concerned on this point as they are over the waivers in contracts with purely freelance workers. It may be that the industry will seek to have composite works excluded from both of the moral rights of paternity and integrity as has been granted to computer programs.
In Chapter V, the provisions for dealing in rights, especially those in Clause 82, are very welcome since publishers often hold exclusive rights from their authors and here and elsewhere—for instance, in Clauses 90 and 91—the status in copyright of the exclusive licensee is recognised and helpfully strengthened.
Turning to Chapter VI, like my noble friend Lord Lucas of Chilworth I am happy to note that the Government have recognised the part that has been played by the trade in fighting infringement of copyright, by strengthening the industry's hand in both the substance of the provisions and the presumptions in favour of copyright holders in civil proceedings. May I, however, put down a marker to express my dismay, in regard to the new offence of possessing "in the course of a trade or business", at the introduction of the words,with a view to committing any act infringing the copyright".I feel strongly that in Clause 98(1)(c) these additional words weaken the new offence of possession introduced into the clause.
I come now to Chapter VII covering licensing schemes and licensing bodies. I have to say that—to put the matter mildly—this is not an easy read. The complexities of both intent and expression are in great contrast to the pellucid qualities of other chapters of Part I of the Bill. Clause 105 establishes criteria for a collecting society to qualify as a "licensing body". This body then operates "licensing schemes" and/or grants "licences". In respect of photocopying by educational establishments, there are important provisions for bringing into the scope of licence both individual works or classes of works, the availability of which through collecting societies' repertoires may be educationally important. It is not clear whether this inclusion is in accordance with, or in defiance of, the Berne Convention.
For the purpose of Clause 130, it will be important that the "licensing body" has in place a scheme capable of being "certified" by my noble friend the Secretary of State. I accept that your Lordships may not find this a suitable moment to enter into technical detail. But do the provisions of this chapter need to be so complex? Why distinguish between "licensing schemes" and "licences"? I would ask my noble friend the Minister to take a look at the whole of Chapter VII, for I fear that it may end up being comprehensible to the very few whereas its subject matter is so fundamental to all copyright owners and users that it needs to be as comprehensible to the many as the rest of Part I.
The establishment of a copyright tribunal under Chapter VIII of Part I of the Bill is, on the other hand, wholly welcome for the industry has always accepted that there is an inherent tendency in the nature and operation of any collecting society to become a quasi-monopolistic body. So a measure of 1524 supervision through an arbitration mechanism is appropriate.
Chapter IX covering the qualification for and extent of copyright protection may need some attention in Committee and I note some of the wording; for instance, the detail of provision at Clause 143(1)(a) for qualification by reference to author and the new transitional provision at Clause 147(3) for a colony ceasing "to be so". This latter is of concern to those of us who do business in Hong Kong. It is important not to extend copyright protection in the United Kingdom to the works of nationals of Commonwealth countries that do not extend reciprocal protection to the works of qualifying British authors.
I will not stress your Lordships' tolerance by going into the detail of Chapter X, save to point out that a number of topics, including the territorial provisions and savings of Schedule I concerning moral rights and the expressions defined in Clause 161 concerning "reprographic process", affect directly the relevant substantive clauses of the Bill.
Perhaps I may turn to what is not in the Bill. Like the noble Lords, Lord Morton of Shuna, Lord Lloyd of Hampstead, and other noble Lords, I fear that the omission of a royalty to be paid by a blank tape levy will not make the problem go away. The reconciliation of rewards for creativity with the convenience of private and undetectable use implicit in the new technology remains the nub of the problem. The Government have also failed to take the opportunity to incorporate into the Bill a rental right as outlined by the noble Lord, Lord Willis, and the noble Earl, Lord Winchilsea.
Thirdly, and rather more specifically, the Government—through perhaps deliberately unclear wording—at Clause 45 have put the publishers of law books and others in a difficulty. It must be important as a matter of public policy that statutes and judgments should be widely and quickly available. Ignorance is no excuse. The Bill does not follow the recommendations of the Whitford Report, referred to by the noble Lord, Lord Lloyd of Hampstead, and the noble and learned Lord, Lord Denning. In paragraph 591, Whitford says:So far as judgments, written or extempore, are concerned, it is arguable that they are not entitled to copyright. The same might be said of Acts of Parliament and other forms of legislation. The statutes and judgments embodying as they do the law, should on the face of it be free of any possible copyright restriction".Finally, on behalf of the many people who have an interest in the protection and creation of intellectual property I welcome the intent, the timing and much of the drafting of this Bill. To nourish creativity through a new copyright Act fit for the year 2000 and beyond is a truly democratic and significant act of political will, and one excellently suited to the major theme put forward by my right honourable friend the Prime Minister, as referred to by the noble Lord, Lord Lloyd of Kilgerran; namely, the need for the United Kingdom to exploit its brain power especially in small and medium-size businesses. In other words, in the words of the 1986 White Paper:The United Kingdom relies heavily on getting value for its intellectual property".Only a major new reforming copyright Act can ensure and enhance that value for the future.
§ 7.18 p.m.
§ Lord Peston
My Lords, the subject that we have been debating for the last few hours is an important one and as many noble Lords have said is extremely complicated. In my view, there is much in it which is controversial but little that is party political. Indeed having sat through the debate I not surprisingly agree with quite a few of the remarks I have heard from the opposite side of the House and have not been entirely convinced by everything that I have heard from my own side. Clearly the Committee stage of the Bill should not be hurried. It is too easy to make mistakes and we are talking about legislation which we hope will last for many decades.
Following on what I have just said, almost every problem for discussion has two valid sides to it. It is indeed typically the economists', "On the one hand, this, and on the other hand, that". Let me add, in connection with all that, that I hope we can take a rather robust view of some of these topics. It does not seem to me that the issues are quite as black and white as some people have suggested. Also by way of a preliminary remark let me say how much I agreed with the Secretary of State's opening remarks on how much the future of our country and our economic system depends on the creation of intellectual property and of course also on investment in human beings. The two go together. Indeed, I am grievously disappointed that the Secretary of State is not present to hear me say that. However, perhaps he would find the strain too much for him! I hope that the Minister will convey my remarks to him.
Perhaps I may make another comment concerning the debate. This has surprised me as someone new to your Lordships' House. I believe that the noble Lord, Lord Lloyd of Kilgerran, mentioned that he had received some six inches of pressure group material. Perhaps I am regarded as being much less important than he is, because I received considerably less. However, it seemed an immense amount. Looking at the material and listening to the debate, I am bound to say that one matter which concerns me is to note the extraordinary extent to which the producers' side of this argument has been represented when hardly a word has been said on the consumers' side. I find that lack of balance less than satisfying.
In considering each of the topics, I may be rather disparate and incoherent. It is difficult to sit down and write a smooth and rounded contribution to the debate as one listens to it. However, let me start with my series of incoherent points by making one in the general area of publishing. I do not think that one should make the assumption that publishers' and authors' interests are always the same in this field. One or two people have taken that for granted and, with due respect, that is not quite right. Perhaps I may declare the first of many interests at this point, in that I am an author. However, I assure your Lordships that I should starve if I had to live on the royalties which I have earned from my writing.
I for one do not worry about copying of my work. On the contrary, I want my work to be copied and I want people to read it. I do not in any sense resent the knowledge that students all over the country have xeroxed copies of the things which I have written and I should find it quite a wrong state of affairs if we 1526 went too much to the other extreme and interfered with students and others whom I would regard as legitimate copiers of work which I have written especially for them to read.
Turning to the question of the tape levy or (as I do not think that the terminology matters a great deal) the tax, let me say that, speaking for myself, I am very open-minded on the issue. I am a trifle worried about the vehemence expressed on both sides of the discussion. Those who are concerned with the producers' and artists' side rather exaggerate the degree of what they call "theft" which is involved in copying. Equally, I am bound to say that on the other side it cannot be true, as some people seem to suppose, that the Deity would not have sent down twin cassette recorders and a plentiful supply of tapes if he did not want everybody to copy everything that is going. I look forward to the Government's positive and explicit statement on their position regarding what is apparently a change of view on tapes. I think that there is a need for reform in that area.
I also think that it would be a good thing if home taping were made explicitly lawful. Equally, I entirely take the point that the artists concerned would like some reward in connection with that. I personally do not like the idea of a tax on tapes because it would mean that they would cost 10p more than I might otherwise pay. However, I cannot think of another solution. I shall be interested to know whether the Government will be coming forward with one.
In that connection, for those who exaggerate the nature of the problem, I think that the simple economics of the matter, which are well established, should be recalled. A great many things are sold on the assumption that they will be copied. It is at least theoretically possible that the sale of some products, including those in the audio field, will be greater because they can be copied than would otherwise be the case. It is not true, and there is no economic presumption that it is true, that the authors and the publishers get nothing. A rational pricing policy will certainly take into account to some degree the fact that something might be taped. I am not saying that authors, publishers and artists get enough. However, the statement that they get nothing is wrong economically.
Turning to the question of copying for educational purposes and to some extent private purposes, I very much follow the noble Lord, Lord Perry. Like many other Members of your Lordships' House, I cannot claim to be expert at reading legal documents and I cannot be totally certain that this matter is in the Bill. But it seems to me that the Bill leads toward licensing fees and licences. Again, taking a robust view, it is better to have a blanket licence which covers everything rather than all sorts of detailed provisions for specific cases. That is especially the case where there is really no damage to the rights of the copyright owner with respect to a good deal of reprographic copying because so much is done for convenience.
Even after joining your Lordships' House, I still occasionally find the time to read academic journals and I occasionally copy articles photographically for two reasons. (I must not say that I "Xerox" them because that is a trademark.) The first reason is that 1527 I would prefer to read the article at my convenience rather than while sitting in the library, which in our case is quite crowded. The other reason is the rather more neurotic one that there is quite a lot of stuff which I think that I should like to read one day and therefore I copy it. I must tell your Lordships that I often end up never reading it, which is a source of great disappointment to me. But under no circumstances was I ever going to buy the journal from which I took the copy. I do not believe that the authors of whom I am speaking have a different view.
§ Lord Willis
My Lords, I must interrupt the noble Lord. I object strongly to what he is saying. Authors do object. What he is saying is that authors do not get paid for what they are doing. I have no objection to the noble Lord taking copies of articles, short stories and whatever he likes by means of reprography. However, there should be some central payment and licensing for that. If we do not have that, it is theft. Do not come on with that stuff!
§ Lord Peston
My Lords, I am sorry to say that I profoundly disagree with the noble Lord. It is not theft.
§ Lord Peston
I am saying that it is not theft. I am providing the noble Lord with a specific example. I write quite a lot—
§ Lord Peston
My Lords, I am not writing in order to get anything. I want the people who are concerned to have it. I do not deny that there are other authors, especially in the field of fiction perhaps, who have a different view. I am simply pointing out that it is not quite as simple as those who say that it is theft would like to believe. In many cases it is not; in other cases it may be. My only point was to get a sense of balance in the matter, perhaps excessively since I am an economist. I have no doubt that some writers feel very strongly that they do not want their work copied. But I must say that a large number of us who are academics have exactly the opposite view. I am certain that I am reflecting that view. I do not doubt that the noble Lord is reflecting another view.
To summarise, I think that so far as academic journals are concerned it is entirely reasonable that academics and students should be able to copy from them. The alternative is not that they will buy the journals but rather that they will read them less.
The noble Earl, Lord Stockton, although he has never actually published a whole book of mine, may know that I have been included in books which he has published. I think that I have had minuscule royalties on occasion. But then I do not write the sort of work which would produce larger royalties. I do not know whether the noble Earl pays authors in the academic journals. However, there are many of them and again it seems to be my bad luck that the ones I write for do not pay authors. But we are not in the business of being paid. We are in the business of 1528 seeing our names in print and claiming something rather like a moral right. We want our papers to be recognised and read. I am simply arguing that there are two sides to the question.
There are aspects of the position on copying that seem to me to be illogical. However, I may have them wrong. I am not entirely clear concerning the Bill on this matter, but as I understand it the position at the moment is that individual students can make for their own use copies of material in journals.
The library itself at the moment cannot make a copy for general use either without permission of the author or without approval under the licensing scheme. I am currently teaching monetary economics until I retire and I have 30 students. Although they have no need for individual copies of some of the things I recommend, 30 copies are made because the library tells me that I cannot place a single copy in the library for general use without permission. I think that is an absurdity. There are many other absurdities going on in the academic world at the moment. With luck, when we properly interpret the Bill and amend it we shall be able to deal with those matters.
I am speaking for longer than I intended. I agree with the noble Viscount, Lord Eccles, on the question of commercial research. Logically, it is so difficult to decide—as the noble Lord rightly points out—what is commercial and what is not. If I read an article for my own purposes in a journal of financial economics I assume that is academic. If the BBC then asks me to comment on the current state of the stock market in which I make use of the material that I obtained from the journal, because I have now learned something, and the BBC pay me a minuscule fee, that would then seem to be commercial research. The whole thing is nonsensical.
To return to what I was saying, I think that in many of these areas we really ought to have a rather robust view of these issues and not try to draw too precise lines in these matters. It does not make a lot of sense.
I am very sympathetic myself to the problems of the artist concerning non-attribution or incorrect attribution. I think it is only right that the question of moral right ought to be moved forward, as I understand it is. Again, I hope that we do not exaggerate this kind of thing. There is so much about this Bill and the debate on it which seems so full of fuss. I suppose all of us who write occasionally see something and recognise it as one's own. There is no footnote which says where it came from. One feels a bit annoyed, but one gets over it fairly rapidly. I have certainly seen my work mis-attributed to other people. Indeed, since my name is very frequently spelt wrongly, it is often attributed to a chap called Preston. Therefore, whenever I open a book I always look first at the index to see if I am mentioned. I have now learnt not to be too disappointed when my own name is not there because I then look for the other chap and sometimes I am lucky because he is there. If your material is in the book and it is not quoted, you are unhappy about it, and you may claim that you ought to have been quoted. Again I think that somehow the hurt that many artists claim to receive from this can to some extent be exaggerated.
1529 Perhaps I may now turn briefly to licences of right, and declare an interest since I am a member of the Council of the Pharmaceutical Society of Great Britain. I am a Privy Council member who is supposed to represent the public interest. This is an interesting problem although one should not exaggerate its significance. The central issue is that if we abolish licences of right, what would be the cost to the NHS? One of the problems here which I hope the Minister will be able to enlighten us upon either this evening or subsequently is this. There seems to be no agreement on what the cost will be to the NHS. There is not only no agreement, but the range seems so enormous between an original suggestion of about £1 million to £5 million. One communication from a pressure group which I received told me that the cost to the NHS of abolishing licences of right would be £250 million. Even within my kind of work one should be able to narrow the gap down a little more.
I think abolishing licences of right would reduce the competition in pharmaceuticals, and prima facie on that ground I should not like it. If the cost is at the very lower end, and if it is demonstrated that that would damage the important research activities of the pharmaceutical companies, then of course one would say that it is a good idea and we ought to move along the lines that the noble Lord, Lord Lucas, and others suggested. If the cost is of the order of £250 million and it is not demonstrated that there is no research lost, then, rather pragmatically, I would not be in favour of abolition. I certainly think that the Minister ought at some stage to reassure us one way or the other on this matter.
Very briefly, I may say that all noble Lords are very sympathetic to the point about photographs. It seems to me that the obvious solution is that photographs ought to be treated as any other form of copyright. It seems so obvious that I do not quite understand what is the problem.
I actually believe that the copyright law of this country is incredibly generous. There is no point in saying that because we have the Berne Convention, we have to stick to that. I am frequently rather shocked to hear people criticising; but I think we are extraordinarily generous in the provision of copyright. The least that we can do for photographers is to offer them exactly the same as we offer everyone else.
There are one or two other general points I should like to make, and take a little more time and try your Lordships' patience a little longer. I am a little worried about the freedom of exchange of ideas in higher education. Recognition of originality and authorship has always been important. Higher education is an area in which researchers obviously compete with each other to get to the answers but they also co-operate with each other.
Until now, most of us in our pathetic attempts at research have not paid a lot of attention to the intellectual property side of this problem. It may well be right that we ought to pay more attention to this subject. I hope we do not go too much to the other extreme where every time we go into the common room we do not join in a discussion on a subject in case we are transferring some property to a colleague that we might want to keep for ourselves.
1530 This is a trivial matter in economics, but I do not regard it as a trivial matter in the case of the natural sciences or in engineering. Therefore I hope that that point is borne in mind.
There is another matter that I wish to deal with in response to one of the contributions. From the economic point of view, intellectual property is not the same as other forms of property. The point about the economics of it is that intellectual property is fundamentally different from other forms of property, generally because the use or appreciation of intellectual property in no sense diminishes it. The use of it by one person in no sense takes it away from another person. It is quite a different form of property, and that is why one has this particular area of discourse. It is not the same sort of thing. I do not want to start the same row going over again; but that is why the issue of theft is rather more complicated than the simple statement that it is theft. I believe that the economics of the problem are reasonably straightforward. There is the need to provide incentives in the intellectual property field and reasonably recompense those who create intellectual property.
There is also the public good to be taken into account. The creators of intellectual property of all sorts make use of and build on what is in the public domain. It is perfectly fair therefore that some benefit should accrue to the public domain from their efforts. Essentially, what I am saying is that intellectual property is a form of public good, and it is very difficult to exclude others from using it. That is why the subject of intellectual property law is so difficult. Nonetheless, to argue that it has simply a private interest side is not quite right.
I should like to add a couple of further points before I sit down. They relate partly to design rights, which have intrigued me as indeed has the whole nature of this subject. When I read the material I have at hand I did not quite understand the point.
Perhaps I may put it this way. If noble Lords believe, as I certainly do, in competition as one of the key driving forces in the economy, and if one considers what competition is about, it is essentially about the ability of other producers to produce something similar to what is currently being produced. That is the whole point of it.
On the other hand, the creation of intellectual property in some areas creates a monopoly. Where does one draw the line between the exact copying of something and, as it were, the production of something rather similar? I am not quite clear what the answer is to that particular question because it is rather a difficult one. In all cases where we grant intellectual property to a person or a firm, what we are granting to them is a monopoly, albeit a monopoly over a person's intellectual property or a firm's intellectual property. None of us is remotely saying that that should not be done. On the contrary, it must be done. However, it should certainly never be done lightly or without consideration of the public interest.
I conclude by repeating that the Bill is important and is welcome. I also reiterate the point that it must be discussed most carefully, and in detail, in 1531 Committee. I hope that the eventual outcome in Committee will reflect both the contribution of noble Lords and also what one might call the tensions that clearly exist between, on the one hand, the private interest and, on the other, the public good. Both must be taken into account. I hope that the Bill, as it eventually emerges, will reflect the interests not only of the original producers but also of consumers.
§ 7.40 p.m.
§ Lord Beaverbrook
My Lords, it is inevitable that a Bill of this size and complexity will contain measures or will have omissions which do not completely find favour with every one of your Lordships. However, I am greatly encouraged by the welcoming and constructive tone of the debate this evening. I expected no less from your Lordships' House and this augurs well for our forthcoming deliberations on the details of the Bill. I know that my noble friend the Secretary of State wishes to join me in thanking in particular the noble Lord, Lord Lloyd of Kilgerran, for being so generous with his great experience in this field.
Intellectual property law has the reputation of being an arcane subject best left to the specialist. It is certainly complex, but that can be no excuse for failing to recognise its importance or giving it the attention it deserves. The debate we have just heard is an indication of just how many different interests are affected by this Bill. There is scarcely an industrial, commercial or cultural activity which is unaffected by its provisions. We shall be establishing rules with which the creators and users of art, music, literature and industrial products of all kinds will have to live for many years to come. Our task is not only to bring the law up to date but to provide a framework of law which will accommodate the technological changes which are certain to come in the life-span of this legislation. Indeed, it is an irony that the challenges to intellectual property law often arise from the results of just that creativity which the law is designed to encourage.
We have therefore a considerable task ahead of us as we go through the provisions of this lengthy Bill. Fortunately, there are many noble Lords who are eminently qualified for the task. Many of them have spoken in today's debate and I will take a few moments to comment on the points they have made. Before dealing with the individual issues, however, I am pleased to note the approving comments which have been made by many noble Lords on the drafting and layout of the Bill.
It is easy to underestimate the size of the task the draftsman was faced with in rewriting the whole of the existing law on copyright on a plain and uniform basis, as the Government expressed their intention in the recent White Paper. Your Lordships' comments parallel those which the department has received from many copyright experts and other parties with an interest in the Bill. This is a considerable tribute to the skill of the draftsman and, if I may say so, to the determination of the Government to ensure that so far as possible the resulting statute will be comprehensible outside the realm of the specialist lawyer.
1532 I turn now to some of the points that have been made by noble Lords during our debate today. The noble Lords, Lord Morton, Lord Lloyd of Hampstead and Lord Willis, the noble Earl, Lord Winchilsea, the noble and learned Lord, Lord Denning, and my noble friend Lord Brentford raised the matter of the blank tape levy. The blank tape levy issue is perhaps the most debated in copyright and the Government are very conscious of the strong feelings it arouses on both sides. This is why we have looked very carefully at the matter.
These proposals went beyond the principle of the Government providing legal protection to the intellectual property of a creative artist. They involved the Government in the collection of a new tax to provide the copyright owner with financial reward for his work. A new bureaucracy would have been required to collect and distribute the proceeds of the levy. The cost of administration of the scheme would have been disproportionate to the amount of money concerned.
We were also unhappy about the rough justice element of the levy proposals. Not every blank tape is used to record copyright material, many noble Lords have pointed out, and so the levy would have been an unfair imposition on many people. Even those who would be entitled to a rebate of the levy would have been put to the inconvenience of making a claim. This would have been particularly hard, as my noble friend Lord Auckland pointed out, in the case of the blind and visually handicapped people who make extensive use of blank tape in their everyday lives.
A levy could well have been marked up in the retail chain, with the result that the burden on the consumers would be considerably more, with those in the retail chain standing to gain almost as much as those for whom the levy was intended. For all those reasons we have decided not to proceed with the levy. It is a question of balance, and on this question we have come down on the side of the consumer.
The noble Lords, Lord Morton and Lord Lloyd of Hampstead, asked what the Government intend to do about enforcing the right to prevent private copy. These are private rights, not rights requiring government action. Indeed, I understood the noble Lord, Lord Morton, to say that he was concerned that copyright should in general remain a civil matter. My noble friend Lord Auckland asked about rights relating to the recordings of performances. The recording of a performance by such performers will be covered by performers' rights, even if they have exclusive recording contracts. Their recording companies may also have rights and if the works are still in copyright—much good music, of course, is free of copyright—the recording would infringe that copyright.
On the subject of rental, my noble friends Lord Brentford and Lord Auckland, the noble Lord, Lord Willis, and the noble Earl, Lord Winchilsea, all spoke in favour of what is known as a rental right. Rental, rather than sale, is the predominant method of distribution of videograms. It is possible that rental will become significant in the compact disc market, although this is not so at present. The suggestion has been made that the owners of copyright in sound 1533 recordings and videograms should be given the right to control the rental of records and videos. This was a matter on which we invited comment in the 1985 Green Paper The Recording and Rental of Audio and Video Copyright Material.
The evidence we received in response to the 1985 Green Paper was not sufficient to persuade us that a sufficiently serious problem existed to justify the introduction of a new right which could act against the public interest by depriving the consumer of the possibility of rental and forcing him instead into an expensive purchase. We accept, however, that in general it is right that copyright owners should receive payments when their works are commercially exploited on a large scale. It appears that at present the owners of rights in films are already receiving considerable revenue from video rental. If so, the same situation could apply in future to record rental should this develop on a significant scale. However, we are prepared to look at ways of ensuring equitable remuneration from rental if there is evidence of a real problem.
My noble friend Lord Mottistone mentioned the problem of access to databases. Some have argued that there should be a copyright in databases which is equivalent to the publisher's copyright in the typographical arrangement of a published edition. We have looked carefully at this matter and we do not think that this is necessary or desirable. There will be a copyright in the database as a compilation in the same way as there is in, for example, a street directory. Furthermore, unlike books, electronic databases are centrally organised and located and publishers can therefore control access to them by appropriate technical and contractual arrangements. We feel that databases can be adequately protected by those means without the complication of a new and possibly legally complex right.
The noble Lord, Lord Hutchinson of Lullington, and my noble friend Lord Brentford asked me about ownership of copyright in a number of aspects. The question of who is to be the first owner of copyright in a work is clearly of fundamental importance. The general rule that the author should be the first owner of copyright is, I think, generally accepted. It is in the exceptions to that general rule where the arguments begin.
We have made one significant change in this Bill on the question of ownership. The copyright in all commissioned works will now vest in the author. The provision in Section 4(3) of the 1956 Act which vested the copyright in certain works in the commissioner was anomalous and we have been persuaded not to re-enact it. The commissioner can always acquire the copyright contractually if he needs it.
The Bill, however, retains two other special provisions on ownership. Clause 11(2) echoes Section 4(4) of the 1956 Act and provides that where a literary, musical, dramatic or artistic work is made by an employee in the course of his employment the first owner of the copyright is the employer. There are those who argue that the employed author should own the copyright and that the employer should acquire it contractually. We do not accept that. To do 1534 so would be to put an unreasonable burden on employers who are entitled to expect that they should have the benefit of what is produced by their employees.
The noble Earl, Lord Winchilsea, asked for some assistance on Clause 24. I can assure him that it does not affect the manufacture or import of tape recorders, photocopiers or other similar devices, or trade in them. It is limited to articles specifically designed or adapted for making copies of the work in question. In other words, it is limited to articles the only use of which is the making of copies of particular works, such as a computer program on tape which can be used to make copies of copyright engineering drawings.
My noble friend Lord Eccles, the noble Lords, Lord Ardwick and Lord Kilbracken, and the noble and learned Lord, Lord Denning, among others, mentioned fair dealing, especially with regard to photocopying and commercial research. I have noticed the concerns that have been expressed about the change to the so-called fair dealing exceptions that will affect commercial organisations which make photocopies of copyright material for research purposes. At present, such photocopying is allowed without payment and without the need for the copyright owner's consent, if the extent of the copying is fair. This is usually taken to mean the taking of single copies of parts of complete works or single copies of journal articles.
However, since the exception was framed the amount of such copying has increased enormously and the Government feel that it is anomalous that copyright material should be used on this scale by commercial organisations without payment. The intellectual property embodied in the photocopied extract or article represents a valuable raw material for the research-based firm and, like all other raw materials resulting from someone else's endeavour, should be paid for. I am aware that fears have been expressed over the terms and conditions which copyright owners might demand when granting licences to make such copies, but I remind your Lordships that licences of this nature will be subject to the control of the Copyright Tribunal, which will ensure that the terms and conditions are reasonable.
My noble friend Lord Eccles and the noble Lord, Lord Ardwick, asked how librarians could be expected to be satisfied about the purpose to which photocopies can be put. Under existing law, libraries must already be satisfied that photocopies will he used for private purposes or research. They do that by requiring the person requesting the copy to sign an appropriate declaration. In future, the declaration will have to cover the question of commercial research, but there will be no greater obligations on the library.
The noble Lord, Lord Perry, referring to photocopying, asked what the position of educational establishments was. He said that perhaps the photocopying should be free unless it can be shown to be damaging to the publisher or owner. He suggested that photocopying in schools and universities can damage publishers. I do not think that is necessarily the right approach. Photocopying, for instance for educational purposes, is a large-scale 1535 use of copyright material, and rights' owners are entitled to payment for it without having to show in each case that it is damaging. Any disputes over licences can be taken to the new Copyright Tribunal, as I have already said. That will act as a control to ensure that terms are reasonable.
The noble Lord, Lord Kilbracken, asked me about Clause 25. He is mistaken in believing that Clause 25 is a new provision. It is identical to Section 5 (5) of the 1956 Act. He also referred to the fair dealing provisions in Clauses 29 and 30. He suggested that their application to artistic works was new. That is so only in one respect; namely, fair dealing for the purpose of reporting current events. In all other respects, the clauses follow Section 9 of the 1956 Act, subject of course to the commercial research point.
The noble Lords, Lord Morton of Shuna and Lord Ardwick, asked whether the fair dealing provisions in Clauses 29 and 30 were all that the Bill had to say on that subject. The answer is, yes. There are not to be any more general exceptions for fair dealing than there are in the present law.
The noble Lord, Lord Morton, made the point that the definition of commercial research was not clear. We believe the definition of "commercial research" in Clause 161 is clear. Taken with the exception in Clause 29, the effect will be that a photocopy taken by or on behalf of a profit-making body will need to be paid for. The relevant time that that falls to be decided will be the time of making the copy.
The noble Lords, Lord Morton, Lord Lloyd, Lord Willis, Lord Hutchinson of Lullington and Lord Ardwick, and the noble and learned Lord, Lord Denning, mentioned moral rights. It is natural that moral rights should have attracted the attention of your Lordships. They are very much a novelty in United Kingdom statute law, and the new always brings with it a period of adjustment and uncertainty. However, we must not imagine that such provisions are launching the United Kingdom into uncharted waters. In many countries it has been accepted for a long time that authors have rights in their works quite apart from the economic benefits that may derive from their exploitation. The Berne Convention has codified these principles into two basic rights: the right to be identified as the author of a work and the right to object to distortion of one's work.
In all the countries which expressly provide such moral rights newspapers get published, films get their release, and television programmes are shown without dramatic conflicts over moral rights between the newspaper editor, the broadcasters or the cinema distributors, on the one hand, and the journalist, the film director or the programme contributors, on the other. The Government believe that the Bill frames the rights in a way which achieves a balance between authors and their employers. For example, reasonable editorial practices in newspapers will be able to continue without undue hindrance. Films will be edited to make them suitable for broadcasting, just as now, unless the director can show that any cuts were not reasonable in the circumstances and were prejudicial to his honour and reputation.
The noble Lords, Lord Morton and Lord Hutchinson, mentioned two further points about 1536 moral rights. It was suggested that an author would have to know in advance about the commercial exploitation of his work before exercising his rights. I assure noble Lords that that is not so. That may reveal a misunderstanding or an error in drafting which we should explore in Committee. Both noble Lords also questioned the limitation of remedies for breach of moral rights to economic remedies. I can say with confidence that there is here a misunderstanding. All we are seeking to do is to exclude damages for injured feelings, if there is an infringement of the right to be identified as author of the work. The point arises on Clause 93. I hope that we can return to that point in more detail in Committee.
The noble Lord, Lord Hutchinson, asked how the provisions for assertion in Clause 70 would work. That is relevant only in respect of the right to be identified as an author. When an assertion is in an assignment, it is for the assignee and his successors in title to keep themselves aware of it. The author may rely on it for ever. Any other assertion must be drawn to the attention of other persons for them to be bound. How the author achieves that is up to him, but in that case it would not be right for others to be taken by surprise by an assertion of which they are unaware.
The noble Lord, Lord Lloyd of Kilgerran, questioned the value of a moral right which has to be asserted in advance. It is a complicated matter, but assertion is relevant only to one of the three moral rights; that is, the right to be identified as the author. Assertion may easily be achieved under Clause 70, either when the author parts with his copyright upon assignment or, at any other time, by notice in writing. The purpose of requiring assertion is to avoid the need for copyright owners to worry about identifying the author in a large number of circumstances in which the author, having been paid, does not care whether he is identified and does not make his indifference known.
The noble Lord, Lord Hutchinson, asked why damages for non-identification as author are limited to damages for economic loss. The intention is to exclude damages for injured feelings. I emphasise that that does not exclude damages for loss of reputation, because an author or artist lives on his reputation. Any loss or damage to it is an economic loss. I shall be happy, however, to return to this point in Committee because it is obviously a point of some concern and we must be sure that damages are indeed reasonable for loss of reputation.
The noble Lord, Lord Willis, and my noble friend Lord Lucas of Chilworth touched on the matter of designs and spare parts. The noble Lord, Lord Willis, mentioned it in the context of jobs. My noble friend Lord Lucas mentioned it in relation to the motor industry. This is another very important and hotly debated issue addressed by this Bill. Few would argue against designs of industrial articles being taken out of copyright, and Clause 51 of the Bill achieves this. However, views diverge, as we have heard this evening, over whether any new form of legal protection is required once copyright has been removed.
1537 The Government consider that such protection is required in order to encourage investment in design in all its forms. We do, however, need to ensure that the new protection does not stifle competition in the supply of replacement parts or components and we believe that this too is achieved by the drafting of appropriate exceptions in the Bill. These important exceptions will be found in subsection (3) of Clause 192 of the Bill. My noble friend the Secretary of State outlined the purpose and effect of these exceptions in his opening speech.
The noble Lord, Lord Morton, referred to the matter of patent litigation. Clauses 264 and 265 of the Bill particularise changes to the way in which patents are currently litigated. However, I must make clear to your Lordships that these clauses of the Bill are not as yet fully worked out. As many noble Lords may know, the reason for this is that the whole question of the reform of patent litigation has been under consideration by a committee under the chairmanship of the permanent secretary to the noble and learned Lord the Lord Chancellor. Although the report of this committee has not yet been finalised, it is clear that the main thrust of its recommendation will be that patent litigation shall be undertaken in a county court.
The Government firmly believe that reform is necessary, and accept that the county court solution will result in significant savings in time and cost involved in patent litigation. Consequently, the two clauses in the Bill signal our acceptance of the principle of such a new jurisdiction and pave the way for government amendments when there has been time to consider the committee's report fully.
§ Lord Morton of Shuna
My Lords, if that is the position and the report of the committee is not finalised in time, I trust that the Government will allow these clauses to be recommitted. It is very unfortunate—it happened in the Financial Services Bill—if the Government produce a large number of amendments to new clauses at a very late stage in the Bill. It destroys any purpose of having the Bill properly discussed.
§ Lord Beaverbrook
My Lords, I have acknowledged that we are not yet fully decided on this matter. I am sure that we would want to be as co-operative as we possibly can in this matter in order to try to get it right. But we shall be giving careful consideration to all the points raised by your Lordships today before bringing forward our amendments.
The noble Lords, Lord Morton and Lord Peston, and my noble friend Lord Lucas of Chilworth, mentioned the matter of pharmaceutical licences of right. We believe that the likely extra cost to the National Health Service which will result from the provisions in the Bill which will exempt pharmaceutical patents from the licence of right provisions in the Patents Act will be between £5 million and £8 million spread over the next 10 years. However, this must be seen in context. Since the Patents Act was enacted in 1977, the time taken for the necessary and proper process of testing new drugs before they are put on the market has increased 1538 significantly. The result is that the research based companies have a shorter period in which to benefit from their patents. The Bill will compensate these companies for this loss and ensure that they can continue to invest in the very expensive and vital programmes of research which are an essential part of the search for new drugs.
The noble Lords, Lord Morton and Lord Kilbracken, advanced the argument that the copyright term for photographs should last for life plus 50 years as it does for other artistic works. The Whitford Committee rejected this in 1977, pointing out that the present term is adequate to ensure a fair return. The 50-year term of copyright for photographs is consistent with that provided for films and well in excess of the 25-year term specified by the Berne Convention.
The noble Lord, Lord Morton, suggested that Clause 63 is inconsistent with other provisions of the Bill in allowing the making of a recording of copyright work if the recording is made from a broadcast. I am afraid that that is a misreading of Clause 63. All that that clause allows is a recording of a broadcast without infringing copyright in the broadcast itself if the recording is made for private purposes. It does not allow the making of recordings of the works, films and sound records involved in the broadcast. Thus it is a very narrow exception. Incidentally there is an identical exception in the existing law.
The noble Lord, Lord Lloyd of Kilgerran, mentioned presumptions in civil proceedings. Objection has been raised to the presumptions which are to be made in civil proceedings for infringement of copyright. Clause 94 provides that it shall be presumed in the absence of evidence to the contrary that copyright subsists in the work in question and that the plaintiff is the owner of copyright. These presumptions already apply under the provisions of Section 21 of the 1956 Act although only until the defendant puts them in issue. Under the present law, it is enough for the defendant merely to raise the point in his pleadings without any evidence for the plaintiff to have to prove subsistence and ownership. Under the Bill he will have to back his challenge with some evidence in order to put the plaintiff to proof.
Unlike patents, registered designs and trade marks copyright is not registered in any way, and so establishing subsistence and ownership of this intellectual property right is less easy. Throughout the long period in which copyright law has been under review there has been a constant complaint that the defendant can put the plaintiff to proof when he has no reason to doubt the assertions made. The trouble and expense may deter the plaintiff from proceeding and occupy the court unprofitably. Can it really make sense to occupy valuable court time to establish that copyright subsists in the latest blockbuster film from Hollywood? The out and out pirate will no longer be able to use this delaying tactic.
This change will affect only the blatant infringer, the person who knowingly infringes. Other defendants will not be affected since either the question of subsistence and ownership is not in contention or the defendant will have evidence 1539 relating to subsistence and ownership which led him to believe that he was entitled to carry out the act complained of. This will be sufficient to put the plaintiff to proof in the normal way.
The noble Lord, Lord Willis, asked me whether Clauses 35 and 130(4) are contrary to the Berne Convention. We believe they are not. The convention allows exceptions in special cases. Educational recording of broadcasts is one such case and we have taken care to ensure that copyright owners can obtain payment for this recording by setting up licence schemes.
The noble Lord, Lord Hutchinson, asked me about a right known as droit de suite. This would enable an artist to share in the profits from every sale of his work taking place during the term of his copyright. On the other hand, such a right could have serious adverse effects on the art market and on artists themselves by driving sales underground to avoid the new payment. Also, administration of the right would be complex and expensive. For those and other reasons the Government do not intend to introduce a right of this kind.
The noble Lord, Lord Hutchinson, also asked me whether Clause 58 refers to new works or to copies of existing works. It applies to new works. This clause is a simplified version of the existing law—Section 9(a) of the 1956 Copyright Act. Its purpose is to allow an artist to repeat parts of the design of his earlier works without infringing copyright.
The noble Earl, Lord Stockton, made a point about imports from the European Community. As the law stands following the so-called Charmdale case, a publisher who has an exclusive copyright licence for the United Kingdom cannot use copyright law to prevent imports of books from, say, the United States when those books have been made with the copyright owner's authority. The Government said they would rectify this and have done so in general terms in Clause 27(3)(b). This provides that an imported article such as a book infringes copyright if its making in the United Kingdom would have breached an exclusive licence. However, we have to take account of our obligations under the treaty establishing the European Economic Community, which is why Clause 27 goes on to say in subsection (5) that articles which may be lawfully imported under a Community right do not infringe copyright.
We believe that this formulation is a flexible one leaving the question of infringement by importation from member states to be decided in the light of Community law and jurisprudence at that time. We certainly do not see it as prejudicing any case that publishers may make for exemption of territorial licensing of books from some or all provisions of the treaty.
Perhaps my noble friend Lord Lucas of Chilworth will forgive me this evening if I do not answer in detail the points that he made. I shall undertake to write to him, if I may, because time is now running rather short and I am conscious that I have been speaking for rather a long time.
I believe that I have answered as many of the major points as I can this evening and I hope that many of 1540 the smaller points that your Lordships have brought up can be dealt with in Committee. We have had most useful and constructive debate on the Bill, which bodes well for future discussions in our Committee stage.
The whole subject of intellectual property is of vital importance and it is not debated in this House as often as perhaps it should be. The undoubted complexity of the subject may sometimes deter us but I hope that our discussions on the Bill will lead to an increased awareness, both within the House and outside, of the important contribution that intellectual property makes to the economic and cultural life of the country. The dissemination of ideas and creative works benefits society as a whole and stimulates further creativity. But that can only take place if those who write, compose, design, invent and come up with a new idea can be confident that they can tell the world without fear of having their brainchild stolen. The process of review of the law in this field has been a long one but we are now in a position to bring our law up to date. The Bill may sometimes have seemed a long time coming but I believe it has been worth it. It will provide a fair and workable law in the field of copyright, performers' protection and designs which will stand us in good stead for years to come. I commend it to your Lordships.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.