It looks like we are on, my Lords. There is a great deal that one could say about the way in which the need arises for this SI and indeed for the others in this series. Today my noble friend Lord Tyler has called them “speculative”; last Wednesday I think he was slightly more scathing and called it a possibly wasted exercise, while the noble Lord, Lord Deben, was even more forthright, saying that we could be,
“conniving in what is manifestly a total nonsense”.—[Official Report, 09/01/18; col. 203GC.]
I have some sympathy with that statement, given that no deal, as the noble Lord, Lord Adonis, has explained, is now not the will of the House of Commons. At the same time, though, my noble friend Lord Tyler also referred to the report by the Constitution Committee, The Legislative Process: The Delegation of Powers, which made explicit reference to the critical importance of effective and timely scrutiny of Brexit-related secondary legislation. So I reluctantly accept that we still have to give it proper scrutiny in these circumstances but, whatever the merits of the statutory instruments, the least that we can do is debate them on the Floor of the House in the main Chamber, and I will be supporting that proposition if it is put later.
Each of the statutory instruments is important in itself. Even if they are only preparatory to no deal, in practice they may be indicative of longer-term government and IPO thinking, and may well be intended to take effect even if we have a deal and the transition period comes into effect. I have an enormous amount of sympathy for what my noble friend had to say about the time limitation and the need for a sunset clause, and for what the noble Baroness, Lady Kingsmill, said about it not being explicitly stated that the regulations do not come into effect if indeed there is a deal. There is a large gap in the middle of the regulations.
In the short term, these regulations are a partial solution to the problem of the UK no longer being inside what is called “Fortress Europe” for the purpose of the exhaustion of intellectual property rights. If there is no deal and the exhaustion SI comes into force on exit day, the effect is to implement, as the Minister explained, a modified version of the current regional EEA exhaustion regime. It would ensure that, post Brexit, once a product has been legitimately placed on the market in the EEA, it can continue to be resold into the UK without the rights holder preventing that. What we are doing is unilaterally allowing EU 27 goods already placed in the market there to be exported to the UK. That may be good news for parallel importers but it is not such good news for parallel exporters. It is clear from the Government’s small print that these exporters may well need to seek permission to gain entry into the EU. No wonder it has been called a one-way exhaustion regime.
What are the Government doing to mitigate the situation? It is clear—the discussion earlier elucidated this—that there has not been any formal consultation on this one-way regime. Indeed, it calls into question
the statement about the lack of an impact assessment and what the Minister said in his letter about the draft regulations not changing current policy or imposing new liabilities or obligations on any relevant persons. If an exporter has to seek the consent of the rights holder on exporting into the EU 27 after a no-deal Brexit under the regime set out under these regulations, surely that will have a significant impact on that business.
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The Explanatory Memorandum and the no-deal notice on exhaustion do not, however, deal expressly with the issue of international exhaustion. What is not certain is whether the ruling in the Silhouette case—I can give the reference if the noble Lord’s officials would like it—and the cases that followed it will apply post Brexit to this modified exhaustion regime. Some commentators have said that after Brexit our courts would have to follow previously established UK case law establishing international exhaustion rights. I do not believe, given the considerable discussion in the legal profession about the impact of this SI, that it does provide legal certainty, as the Minister asserted earlier. This could result in goods first placed on the market anywhere in the world—whether in an EEA or non-EEA member state—being resold into the UK. That international exhaustion regime could have a massively detrimental effect on our retailers, especially in terms of online sales. What do the Government’s intend and why have they not dealt with this issue expressly?
Of course, if there is a deal, under the draft political declaration the UK would have the freedom to establish its own regime for the exhaustion of IP rights. In the unlikely event that there is a Prime Minister’s deal, can the Government confirm that regional exhaustion provisions are also the longer-term solution for exhaustion vis-à-vis the EU post transition too? Or do they envisage that their current review and research will look at exhaustion across the board internationally, so that the regime even for Europe could be changed to what it was pre our membership of the EU: an international exhaustion regime? Can the Minister give some clarity on the work being conducted by the IPO on a future exhaustion regime, and its current thinking? That is absolutely essential, certainly given the representations made to me and colleagues about this statutory instrument.
Several other IP-related matters are not covered by the statutory instruments before the Committee, and this is the appropriate point at which to raise this issue. The Government have some pious words in their document, IP and BREXIT: The facts. For our future relationship with the EU,
“the UK looks forward to exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders. Such arrangements will all require negotiation with the EU and we look forward to discussing the possibilities with them, including on trade marks”.
What do the Government have in mind if the Prime Minister’s deal does go ahead? What can rights holders and creators look forward to? Surely nothing better than we have currently as a full member state of the EU.
As the noble Lord, Lord Adonis, pointed out so pertinently, none of the draft statutory instruments addresses what will happen to geographic indicators, and the Government provided little advice in the technical Brexit papers issued last autumn. What are the Government’s intentions regarding protecting these rights holders? How can that happen and what co-operation is needed—even in these circumstances—from the EU currently?
Despite being mentioned together with European trademarks in last autumn’s IPO’s technical document, Trade marks and designs if there’s no Brexit deal, the SIs do not address what will happen to design rights. Will these continue to be protected in the UK as well? One of the crucial aspects for designers is not only exhaustion—as with other exporters, they will be adversely impacted—but the question of whether, if the UK is no longer in the EU, we will have the equivalent of a Community design right which covers a much broader set of design characteristics, albeit for only three years. The IPO has said in its document that there are plans to introduce such a right, but why not with these SIs? No deal will have just as big an impact on designers as on trademark owners. Should we not also have in front of us here and now the equivalent of the trademark SI: an automatic UK translation of a Community design right?
Then, there is the very important aspect of rights of representation by IP advisers, trademark attorneys and the like. What is the position in the event of no deal? What discussions are the Government or the IPO having on this important subject?
Finally, I am rather baffled by the fate of the draft Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations, which the sifting committee, the European Statutory Instruments Committee and our own Secondary Legislation Scrutiny Committee considered should be dealt with by the affirmative procedure. When will this draft SI come before us? It deals with a number of extremely important aspects of IP, some recently coming into effect, such as portability of online services—which will be lost—database rights, collective management of copyright and orphan works. The Government published a technical notice, Copyright if there’s no Brexit deal, which covers these and the necessary amendments to primary legislation. Why is this draft SI not before us today?
Many questions arise from this SI and the others, and I very much hope that the Minister will be able to answer them.