My Lords, Amendment 28AC would allow for the awarding of damages in copyright infringement cases that compensate a plaintiff for the infringement, as well as the additional damages allowed in some circumstances for copyright infringement. This is already catered for by Regulation 3(2) of the Intellectual Property Regulations 2006—SI 2006/1028—and damages may be awarded at the court’s discretion.
Copyright gives the creator of a protected work the right to control certain acts, such as how and when the work is copied or when it is issued to the public. Most cases of copyright infringement fall under the remit of civil law and are dealt with by the civil courts. Infringement can be a criminal matter, particularly where it is carried out deliberately and/or it occurs on a commercial scale. The UK legal system does not generally have principles of punitive damages in the civil courts. In some circumstances this is possible for blatant copyright infringement, but these provisions are rarely used. Civil remedies in UK law are aimed at settling disputes and provide restitution and compensation, while punishment is the purpose of the criminal courts.
Intellectual property law is complicated and in many circumstances it is possible for an individual or business to infringe accidently. As a result, although it is possible to obtain additional or exemplary damages for copyright infringement in some circumstances, this isn’t something that the Government intends to introduce more widely. In particular, the introduction of further exemplary damages for design rights and patents would almost certainly have a negative impact on innovation, as industry would become more nervous about infringement when developing new products. Further damages would also create a perverse incentive for some individuals and organisations to take legal action that might otherwise be inappropriate.
An important principle of UK law is ensuring that the level of penalty is proportionate to the level of wrongdoing. The Government believe that furthering exemplary damages could allow for disproportionate sanctions to be imposed on those who unintentionally infringe IP and would not support rights holders, or protect or enforce their rights. Above all, we have seen no evidence that exemplary damages work where they are available in other countries.
The noble Lord, Lord Young, questioned whether the UK Government are doing enough on enforcement. I am delighted that this gives me an opportunity to provide some highlights of what I regard as a serious and important matter. The UK’s legal system convicts pirates and counterfeiters, and 80% of criminal cases under IP legislation in 2009 led to a guilty verdict. In 2009, the UK convicted nearly eight times as many copyright offenders as in 2002. The assets seized from IP criminals were £21 million in 2010-11, which was more than twice the previous year’s figure. Figures vary from year to year, understandably, but there is an increasing trend in the value of assets recovered since 2004-05.
The noble Lord, Lord Young, spoke generally about whether the current system is working. To address his first question, we simply have not seen the evidence that the UK’s penalties are ineffective deterrents. UK piracy is relatively low, and Ofcom research suggests that it is not rising. That is not to say that we are complacent. However, I ask the noble Lord to withdraw his amendment.
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