My Lords, although I have some concerns about the two SIs which the Minister has so ably introduced, the argument that I will put is that, for a variety of reasons, and notwithstanding that the Government have the power to make these regulations, the Government made a grave error in not bringing forward these copyright exceptions in primary legislation. As a result, they have created great concern and confusion in one of our most important industries, and caused considerable disquiet within the creative industries. All this is a matter of regret.
My first point is that we do not have the right structure in place for the creative industries. I regret that this has an impact on our deliberations in this House when we deal with legislation affecting copyright. A proper industrial strategy for Britain which identifies our country’s comparative advantages and global market opportunities must include the creative industries but, as we learnt in a debate in this Chamber only the other night, we have split the creative industries off from the other 11 sectors which BIS has selected and is championing in its drive for growth and a more balanced economy. The creative industries are in DCMS with separate Ministers but we retain the IPO in BIS, reporting to the noble Baroness, with all that this implies in terms of poor integration and a lack of joined-up government. We learnt the other day that the noble Baroness is the fourth Minister for IP in four years, which tells its own story.
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In earlier debates on this topic, Members from all quarters of this House wanted the noble Baroness’s predecessor to become the Ivan the Terrible of IP. He was, of course, flattered by this, but in his characteristically modest way, declined to grow the beard or even don the amazing robes. I always meant to say to him—before his untimely removal—that he was really quite good at striking the poses redolent of Nikolai Cherkasov, who played Ivan IV in the eponymous Eisenstein films. It was the way that he turned slightly when criticised that seemed to bring to mind the idea that several palaces full of boyars had just been destroyed under his instructions. I digress. Despite the confusing appellation now accorded to the new Minister of State at DCMS, let us hope that the noble Baroness, Lady Neville-Rolfe, has aspirations to be the tsarina of IP. I see her perhaps adorned in a triple crown in glorious blue to complement her other attributes. She would be a wonderful commissar for IP.
More seriously, your Lordships will recall that during debate on both the Enterprise and Regulatory Reform Bill and the Intellectual Property Bill, there were calls from around the House for the chief executive of the IPO to become an advocate and proselytiser for IP
and the creative industries more generally. Perhaps the Minister can respond on progress on these points at the end of the debate.
My second point is about whether having the primary powers is the right approach to introducing secondary legislation. Just because one has the power does not mean that it is sensible to use it. These copyright exceptions have been a long time coming. We have to go back to 2012, when the first sign that trouble was in the air was during the passage of the ERR Bill. In addition to containing a number of quite significant changes to our IP regime in respect of creative designs, new regulations on orphan works, regulating collecting societies and operating extended collective licensing, the Act also confirmed that future reforms to exceptions to copyright and rights in performance would be delivered through secondary, as opposed to primary, legislation.
This last point aroused a great storm of rumours and suspicion. The Government argued that they already had the power to change copyright law through secondary regulation, under the European Communities Act. However, in trying to rectify a different problem within the same clause of that Bill—something about aligning the penalties available under the two regimes—the Government set a hare running which eventually meant that they had to amend the Bill three times before both Houses were content.
I have no doubt that the Government always intended that the recommendations of the Hargreaves report on copyright exceptions, and only those, would be brought in by this route. However, because of the poor drafting of the ERR Bill, they failed to nail the suspicion in the creative industries that they had a great raft of other copyright exceptions ready to implement, and that proved deeply corrosive. Therefore the Government ought to have seen the problems that they were causing over that particular clause and set out to allay concerns raised by MPs, Peers and across the industry by promising to bring forward their copyright exception regulations by primary legislation, even though they did not have to. I regret that this approach was not adopted.
My third point is that if there are substantial changes to an existing regime, such as in IP, they need to be given proper legislative time. Copyright is an extremely valuable but often unrecognised or even misunderstood right, which protects a whole range of original materials, including written documents, software, artistic materials, designs, music and dramatic works. They are the underpinning elements of our creative industries, which are of course an essential element of a modern, successful and prosperous British economy. Those industries generate wealth and employment prospects, and are growing at a faster pace than the general economy. Given the importance of the creative industries, and notwithstanding that the Government were entitled to bring in regulations under the ECA, they should have taken the decision to introduce an IP Bill. If that had done nothing else, it would have reflected to the wider community the importance that the Government see in the sector.
On the back of debates and discussions around that Bill, measures to change the regime to permit more exceptions, so that users could get the content they
want and the industry would be remunerated appropriately for its work, might have been applauded not just in the UK but around the world. Ironically, what did we find in the 2013 Queen’s Speech? The Government introduced an IP Bill, which could have done the job. We wait for years for an IP Bill and then in successive years we have two which could have done the job. Why on earth did they not take that opportunity? Instead, the IP Bill of 2013, which is now an Act, set up new powers for the UK to implement the unified patent court agreement and introduce, as the blurb goes on to say,
“new protections for designers, as well as removing red tape and some of the uncertainties for businesses when protecting their designs”.
It could have been a contender, and I regret that missed opportunity.
I also want to talk about scale, because when you have large quantities of secondary regulations, they have to be treated differently from one-off regulations. That is because secondary regulations are not subject to the same level of debate and scrutiny as Acts of Parliament—not least because there is no scope to amend their provisions, so there are no Second Reading debates on principles, no Committee and no Report. Any vote on a regret Motion is effectively on whether to accept or reject the regulations as they stand and as they happen to have been drafted.
It has taken two and a half years, with numerous false starts and unplanned withdrawals, but out of an original batch of 11 SIs on copyright exceptions on private copying and parody we are considering the final two, which the noble Baroness has introduced. The others were approved under the affirmative procedure, combined—in one case, rather artificially—into five SIs which were implemented earlier this year, if not on one of the standard commencement dates.
The Hargreaves report, which started all this, was commissioned by the Prime Minister in 2010 and reported in 2011 amid concerns that current legislation was outdated in the internet age. When he reported, Professor Hargreaves was said to have said that his recommendations were,
“designed to … ensure that the emergence of high technology businesses … is not impeded by our IP laws”.
That may well have been the headline which the Government wanted but when you read the report, it is not quite what he was saying.
The Hargreaves review urged the UK Government to take,
“long overdue action to update copyright law in ways designed to increase consumer confidence in the way the law works”.
Professor Hargreaves noted in the report that the UK had chosen not to implement all the copyright exceptions permitted and drew attention to the fact that, for example, it does not allow individuals to shift formats for personal use or deal with parody; nor does UK copyright law allow libraries to archive all digital copyright material. As he argued, taking full advantage of the EU-sanctioned exceptions would bring cultural and economic benefits, but the main purpose would be to make the copyright law better understood and acceptable to the public.
According to the review:
“The copyright regime cannot be considered fit for the digital age when millions of citizens are in daily breach of copyright, simply for shifting a piece of music or video from one device to
another. People are confused about what is allowed and what is not, with the risk that the law falls into disrepute”.
Going back to the original recommendations of the review is very interesting. There is a world of difference between the Government’s present arguments for the exceptions and what was originally proposed. Given that, I regret that the Government did not use primary legislation to confirm that the central plank of their argument is,
“action to update copyright law in ways designed to increase consumer confidence in the way the law work”.
Finally in that list of regrets, I want to look more widely at the Hargreaves report, because it is instructive in another way. Looking back to 2011, it now feels that the recommendations were of their time but perhaps are not quite as relevant to today’s world. Take the emergence of the Copyright Hub, developments in the EU, new and more flexible approaches by licence holders and the development of technology, all of which have rendered some of these exceptions largely redundant.
For example, UK Music, to which I am grateful for its briefing, makes the following points, which the noble Baroness may wish to respond to. The policy decision on those exceptions was made before the launch of licensed music services, such as Amazon’s AutoRip, which enables consumers to buy CDs but also receive a digital copy of their purchase. The policy decision was made before the conclusion of the European Commission’s mediation on private copying, led by former EU commissioner António Vitorino and published in 2013, and Françoise Castex MEP’s own-initiative report from early 2014. The rules on private copying are currently the subject of an EU-level review, which could resolve some of the legal doubts. We are told to expect a White Paper on copyright from the European Commission in September 2014. The Government have not demonstrated that they are taking on board or responding to these market, policy and legal developments over the past 20 months. Instead, they intend for Parliament to adopt a measure which is, in some senses, already in need of review.
To conclude, I want to make a couple of points about the SIs before us today. I noted that in her introduction the Minister covered a large number of points but did not deal with the question of contract override, which was raised by the JCSI. When she comes to respond, will she cover any points that she feels are relevant to our debate, as I am sure that others will also raise them?
On the remaining question that has been raised, the issue of fair remuneration does not seem to have gone away. Article 5(2)(b) of the information society directive says that member states may provide exceptions,
“in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the rightholders receive fair compensation”.
The Government have argued that compensation schemes are unnecessary when the private copying exception is so narrow in scope and does not cause harm to rights holders or, for example, when rights holders have received payment in another form, such as a licence fee. No further evidence by the Government has been assembled to justify why “fair compensation” in the
UK actually means no compensation. UK Music has published research indicating that the harm to its industry could amount to a loss of £58 million per year.
The Government have also said that compensation is already factored in at the point of sale of these goods. However, the IPO’s report on private copying states clearly:
“We did not find any evidence in support of a widely-held view that stores are including in their price the permission to copy”.
The recent Joint Committee on Statutory Instruments report highlighted concerns about whether it would be intra vires to introduce this copyright exception without also providing for a compensation scheme. It would be helpful if the Minister responded to this particular point. I think that the House would agree that in approving a regulation that experts suggest may have to be tested by the courts before it can be relied on, the Government are not promulgating best practice. An unacceptably high element of risk seems to be introduced here, which may mean that the regulation is ineffective in achieving its objectives. We have been told that the court has already pronounced on this. When this issue was raised in the other place the Minister brushed it away as being largely irrelevant, but it is clearly not.
I have some specific questions. Can the Minister confirm that the department took legal advice on the question of whether a private copyright exception can be introduced without the inclusion of a compensation scheme? If so, in the interests of transparency, will she put a copy of that advice in the Library? Did the Permanent Secretary of her department seek a direction from Ministers on this matter?
Turning to the exception of parody, I made the point in Committee on both the ERR Bill and the IP Bill that this exception does not really seem to do justice to the needs of the many talented artists and performers in the UK who perform parody live and in recorded shows, or to the rather different writers and performers who use pastiche as their preferred art form. I do not think that “fair dealing”, with its very limited amount of material that can be quoted, covers this activity, and to leave in place the droit morale seems to compound the difficulties.
I am also concerned about the quotation issue. I am sure that the Minister will have received a great deal of correspondence recently from photographers, both members of various groups and individually. Their point is important because their argument is that photographs can be “quoted” for genuine criticism and review but are excluded from the exception to copyright when reporting current events. They say that this is a tried and tested definition which has worked. Introducing a more general right of quotation, however, introduces ambiguity and uncertainty that will require legal clarification in the courts, costing rights holders legal fees and lost revenue. I am sure that this will be raised by others, and I would be grateful if the Minister could respond.
In moving this amendment to regret, I believe that the Government have not demonstrated that they are taking on board or responding to market, policy or legal developments over the past 24 months, and are
instead making Parliament adopt a measure that may not be necessary and which may already be in need of review. The Government have proved unable to be responsive to the needs of the times when bringing these copyright exceptions forward under the secondary legislation route; they have missed an important opportunity to raise the status and knowledge of IP by not using primary legislation; they have ignored the comments and advice of the expert committees in Parliament; and they have failed to reach a consensus with key stakeholders involved in this policy debate. That is all to be regretted, and I beg to move.
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