Lord Willetts
Main Page: Lord Willetts (Conservative - Life peer)Intellectual Property Bill [Lords]
Lord Willetts Excerpts(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Minister for Universities and Science (Mr David Willetts)
I beg to move, That the Bill be now read a Second time.
I am delighted to bring the Intellectual Property Bill from the other place to this House. The Government believe in business, large and small, and in removing obstacles that prevent growth. That is why we have pledged to invest a further £4 billion in the industries of the future and why legislative changes, such as those before us today, are so important.
In 2010 my right hon. Friend the Prime Minister commissioned Professor Ian Hargreaves to carry out a comprehensive review of intellectual property. The Bill represents one important element of the Government’s response to his recommendations. The Hargreaves review confirmed that intellectual property is important to the UK and to a wide range of industry sectors. This year, the UK has been rated number one in Taylor Wessing’s global IP index in obtaining, exploiting and enforcing the main types of IP rights. Total annual investment in intellectual property rights represents 4.3% of our GDP.
The Bill proposes changes to help businesses better to understand what is protected under the law, to reduce the need for costly litigation and to provide greater certainty for investors in new designs and technologies. It aims to simplify and improve design and patent protection to help businesses to clarify the legal framework for intellectual property and to ensure that they are appropriately supported by the international IP system. These reforms are vital in cutting red tape to help British businesses to succeed.
UK business invested more than £15 billion in design in 2009, and the Bill seeks to protect and develop this important industry. It will make important changes to design law by strengthening and clarifying the framework that supports the design industry and aligning the UK and EU frameworks where sensible. We particularly aim to help small and medium-sized enterprises, which raised concerns about protecting their designs in the consultation process.
The design sector, which accounts for about 2% of UK export earnings, is made up almost exclusively of SMEs. The Hargreaves review identified the importance of design law and asked for more evidence concerning IP and the design industry. We addressed this challenge through a consultation in 2012. Industry informed us that 350,000 people are employed in the UK’s design sector and that 87% of companies in the design sector have fewer than 10 employees and 60% have fewer than four employees.
These small businesses have made clear to the Government the difficulty that they have in protecting their designs from copying. For example, Anti-Copying In Design—ACID—responded:
“We believe that the currently available ‘punishment’ does not go far enough in fitting the crime of blatant and consistent design infringement and that those who make it their business to follow this unlawful way of doing business should be dealt a criminal record.”
I pay tribute to ACID for its activities in working with us on this negotiation.
Mr James Gray (North Wiltshire) (Con)
My constituents at Dyson, which is one of the few very large companies that employ, I think, several thousand designers and engineers in Malmesbury in my constituency, of course welcome the broad thrust of the Bill. None the less, they are concerned about the fact that clause 13, to which my right hon. Friend refers, would criminalise people who might inadvertently copy someone else’s design. Will he not clarify that by inserting the word “intentionally” into clause 13, to deal with the concern of people such as those who work at Dyson?
Mr Willetts
My hon. Friend speaks very well on behalf of Dyson in his constituency. I recently met representatives of Dyson. They have a very important concern, which I hope we will be able to address in Committee.
I was paying tribute to ACID’s efforts. Following consideration and consultation, one of the central proposals in the Bill is to introduce a criminal sanction for those who set out intentionally to copy a design in the course of business. That will give design the same protection, in broad terms, as trade marks and copyright. One partner of a leading intellectual property law firm recently described the sanction as “evolution not revolution”, and the proposed changes as “sensible and pragmatic”.
I recently met one SME from Sheffield—I think it is located in the constituency of the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), whom I do not see in his place—and the representative of Burgon and Ball told me that it had to cope with 20 civil disputes over alleged design infringements in a period of two years. This problem will have been raised with Members on both sides of the House by SMEs active in the design sector. The problems caused by such design infringements impose an unmanageable financial burden on some of our most innovative small companies. We believe that other means of redress should be available, and the introduction of criminal sanctions will, for the first time, enable small design companies to bring the issue of copying to the relevant enforcement agency.
Pete Wishart (Perth and North Perthshire) (SNP)
The Minister accurately sums up the view of Anti-Copying in Design when it comes to registered design rights, but he will have seen its concern about the need for the Bill to cover unregistered design rights, given that the vast majority of designs are unregistered. Will he consider that as the Bill is debated in Committee?
Mr Willetts
I will, of course, consider all these issues as the Bill is debated in Committee. I think we have got the balance broadly correct on that issue, but I am happy to consider it further in Committee.
Richard Fuller (Bedford) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. As many IP infringements occur in goods manufactured outside the United Kingdom, how will criminal prosecutions take place within the United Kingdom to protect rights?
Mr Willetts
We will be able to apply the provision to any companies active within the UK. If the goods are manufactured abroad, there will nevertheless be some distribution or other entity within the UK.
Mr David Lammy (Tottenham) (Lab)
I am pleased to see the Bill before the House, but the Minister will recognise that large sections of the Hargreaves review, and indeed of the previous Government’s copyright review, are not in it. Will he say something about what is not contained in the Bill, for those concerned about copyright infringement, and on the context in which young people need the freedom to create?
Mr Willetts
I do not know to what extent you, Mr Speaker, would permit the debate to range across the entire Hargreaves agenda. We have introduced a small but perfectly formed Bill that delivers part of that agenda, but it is an important part that will help the design industry, in particular. I will try to focus my remarks on what is actually in the Bill. The Government, as a whole, have already implemented some of Hargreaves and there is more to come. However, given that this is the Second Reading of an important Bill, particularly for the design industry, I hope that the right hon. Gentleman will understand that I will try to focus on that.
The crucial change set out in the Bill—the introduction for the first time of criminal sanctions for infringement of design rights—is not intended to have a chilling effect on innovation or legitimate and competitive risk taking in business. The offence has been carefully drafted to ensure that innocent infringement is not caught. In addition, it will be measured to the high criminal standard of proof of “beyond reasonable doubt”.
That measure sparked much debate in the other place, and our colleagues there made a number of changes to the clause to improve and tighten the sanction. The Government proposed an amendment to ensure that incidental use of a copied design would not be criminalised. Following discussions with industry, an additional amendment was made to provide a defence for those having a reasonable belief of non-infringement. That additional defence was welcomed by the Opposition and industry representatives. We have continued to talk with businesses big and small. Some still have concerns about the scope and clarity of the new offence. We are continuing our discussions with them—this relates to the earlier intervention by my hon. Friend the Member for North Wiltshire (Mr Gray)—and I hope to say more about it in Committee.
Our colleagues in the other place have sent us a much improved Bill. We have continued to improve it since it left the other place as other concerns have arisen. The intellectual property Minister, his officials and I have continued to engage with a number of interested parties, such as representatives of the pharmaceutical, aerospace and IT industries, on their concerns. That included discussions on the detailed wording of the qualification criteria for unregistered design rights. We have listened carefully, and I am pleased to announce that I will be tabling an amendment to the clause in Committee in the light of businesses’ concerns that it is unduly broad. It will ensure that the principle of reciprocity between countries is maintained. I am grateful to the IP Federation for raising the issue so effectively.
The Bill also makes a number of small but important changes to the definitions and legal framework protecting UK designs. They all recognise the need, identified by Hargreaves, to simplify and clarify the designs system. The measures include changing the standard position for ownership to make the designer the default owner of a design, rather than the commissioner. Such changes bring UK and EU design laws into harmony and provide a more logical and simplified system for designers and design users.
In addition, the Bill provides protections from infringement for businesses and individuals using designs in specific circumstances. For example, allowing use of an unregistered design for teaching purposes, such as carpentry in a school, is a sensible measure. So too is the provision of a defence for third parties when, in good faith and without copying, they have made preparations to use a design before a similar design is registered. This and other measures in the first half of the Bill provide more certainty for business and are aimed at modernising and improving the design framework.
The Government’s consultation on designs sought views on the introduction of a non-binding opinions service along the same lines as that currently available for patents, and the majority of respondents supported that. As well as this, the Bill will therefore extend the patent opinions service. That means that the Intellectual Property Office will provide a wider range of expert, but non-binding, opinions on IP in disputes. The existing opinions service provides a low cost means of resolving such disputes, in many cases without a need to seek redress in the courts. Almost 70% of respondents to an IPO review who had used the service considered that it should be extended to other areas of IP. Over 65% wished to see it extended to registered designs and 40% wished to see it extended to the UK unregistered design right. Many of these users are small and medium-sized enterprises that could not afford the high costs of civil litigation. We are therefore pleased that the Bill is going to extend the non-binding opinions service.
The Bill also makes important changes to the patents framework. In particular, innovative businesses in the UK have been waiting for over 40 years for a single European patent system. Creating a business-friendly patent regime for Europe is an important element of the Government’s growth strategy. My right hon. Friend the Prime Minister was instrumental in the negotiations on the unitary patent and the unified patent court. I am therefore very pleased that the Bill gives us the power to implement the pan-European court structure that will underpin the long-awaited unitary European patent system. [Interruption.] I was overcome with emotion at the triumph of the Prime Minister’s negotiating skills on this. The unitary patent could save UK businesses up to £20,000 per patent in translation costs alone—a saving of enormous benefit. Former Supreme Court justice Lord Walker of Gestingthorpe described the unitary patent as
“a remarkably bold step forward, on which successive Governments are to be congratulated, because it has been a very long haul indeed.”
Establishment of the court will further enhance the UK’s reputation as a centre of excellence for commercial dispute resolution, especially in the field of life science patent litigation.
The Hargreaves review stressed the importance of intellectual property for innovation and growth. It argued, however, that policy development in this area had not always been sufficiently directed towards those objectives because of an incomplete evidence base and strong lobbying activity. Innovative businesses grow twice as fast in jobs and in sales as businesses that fail to innovate. The Government therefore want to ensure that the IPO has a sharpened focus on innovation and growth. The Bill requires a report to be submitted to Parliament on how the activities of the IPO contribute to this goal. The report will also increase transparency and allow a wider range of interested parties to scrutinise the work of the IPO.
Mr Gerry Sutcliffe (Bradford South) (Lab)
Will the report that the IPO will provide to Parliament each year include sections to do with the problems that companies and individuals face with intellectual property rights? I recognise the point about showing how the system is working and impacting on growing the economy, but will areas of dispute or problem areas be covered as well?
Mr Willetts
Yes, I certainly envisage the report covering issues where further work may be needed. It will be a report on the IPO’s overall activities.
I now turn to the set of provisions in part 3. I am pleased to be introducing a change that has been called for by the Justice Committee and by the UK’s higher education sector—an exemption to the general right to information under the Freedom of Information Act 2000 to protect pre-publication research. The lack of a dedicated exemption has, for example, left academics worried about whether a freedom of information request might be made for their lab notes before they publish an article in Science or Nature.
The lack of such an exemption has increasingly led businesses to demand contractual guarantees that their data will be secure, which is not only costly in time and resource but has inhibited research collaboration between universities and businesses. For example, the Russell Group has informed the Government that significant university resources were needed to negotiate funding for a studentship with a large multinational company that was unhappy with the perception that its sensitive data might be released. An exceptional compromise agreement was required to resolve that situation, because the university and business were unable to sign off the contract.
Dr Julian Huppert (Cambridge) (LD)
The Minister is absolutely right to highlight the importance of clause 20, which is very welcome. He will be aware that the Wellcome Trust and others, especially those in the bioscience sector, are concerned about the lack of clarity on when protection starts in relation to people preparing a piece of research, which is often the creative element. The Wellcome Trust has proposed two sets of two extra words that could be added to provide clarification. Will he make clear his position and say whether he is prepared to update the Bill?
Mr Willetts
My hon. Friend has made that point to me and I have considered it. He is right that the Wellcome Trust has also raised it. Our view at the moment is that we should stick with the proposals in the Bill, because they have the merit of copying exactly what is already done in Scotland. Of course—I am looking across the House at representatives from Scotland—we are always keen to learn from Scottish examples. Indeed, it is known in the trade as the Scottish exemption. We think that having two rather different provisions for research across the UK might be unhelpful, and that the extra words might cast doubt on the effectiveness of the Scottish provision. We have no reason to doubt the Scottish provision, which currently gets the balance right and ensures protection. I am happy to debate the point further in Committee, but I must tell my hon. Friend that we are not at the moment inclined to go as far as the Wellcome Trust has asked.
Let me give another example, which comes from Universities UK, of the problems that the provisions will undoubtedly tackle. A professor turned down an appointment to the European Research Council as an expert referee because the contract could be read to mean that any material had to be subject to absolute confidentiality. His commitment to that was perceived to be difficult due to existing provisions in the Freedom of Information Act, and ultimately the contract was not signed. As a result, the professor did not take up the work, and the European Research Council lost valuable expertise.
The introduction of a specific exemption for research will therefore provide clarity both to higher education institutions and non-public sector research partners—our excellent research community—and enhance the UK’s leading position in international research.
Richard Fuller
Before the Minister concludes, will he apprise the House of the changes that he said will help to boost small and medium-sized enterprises to grow? When he comes to the Dispatch Box to report on the success of the measures in five years’ time, what metrics will he use to help us to evaluate whether the changes proposed in the Bill have succeeded?
Mr Willetts
That is a very good question. Above all, we will look to the further growth of innovative SMEs in our design sector. We have a fantastic network of designers, especially in small businesses, but many of their innovations are currently taken all too easily, sometimes by bigger companies that have almost a corporate strategy of copying and lifting what our smartest entrepreneurs and designers are doing. I want our design sector and especially such SMEs to thrive, and I hope that the sector will grow strongly over the years. That will be a very good test of the central provision in the Bill, which is to extend more protection to our world-class design community.
The changes that are introduced by the Bill will mean that UK businesses that want to protect their products and technologies through patents and design rights will be better off. The Bill will support our hugely successful design sector and make the law clearer and easier to navigate for innovative small businesses. I trust, therefore, that the House will be content to give the Bill a Second Reading. I commend it to the House.
Pete Wishart
ACID has built up a database of unregistered designs, and tens of thousands of people have registered with it. If that can be achieved by a small organisation such as ACID, which runs so efficiently and effectively with Dids Macdonald and her very small staff, surely the UK Government can do likewise, and that is what we are asking them to do. It is absolutely right to make sure that our design industry is properly looked after in this regard. I welcome any progress on patents and designs, but we need decisive leadership, not another piecemeal Bill that does the absolute minimum that is required.
I did not expect to be raising a constitutional point in relation to these issues, but the unified European patent court could seriously affect Scotland’s ability to judge and make rulings on patent issues within Scotland. As the Minister knows, under the new European regime every member state is allowed four divisional courts. We know there is going to be one in London, because the Government have said so, but we do not know where the other three will be—if there are three; they have not said how many they have chosen to have. One of them has to be in Scotland. We cannot have our economy suffering because our inventors and creators in small businesses have to leave their jurisdiction to secure justice and satisfaction elsewhere in the UK or further abroad. After centuries of looking after these issues, this ability must be available to the Scottish judiciary. The Minister has probably seen the letters from the Law Society of Scotland and the Faculty of Advocates in Edinburgh, who are very worried that we could be diminishing or getting rid of not just decades but centuries of experience in dealing with patents according to Scots law. We must make sure that the Court of Session in Edinburgh becomes one of the divisional courts of the new unified court.
Mr Willetts
Several Members have raised this issue. As the hon. Gentleman rightly said, London will be one of the divisions. How many divisions there are and where they are will depend on the pattern of need and demand. We absolutely understand the importance of accessibility to these services across Scotland. We are working closely with the devolved Administrations and court services in Scotland and in Northern Ireland. I cannot give him the assurance he is asking for today, but as we see the pattern of demand emerge, and if we have good conversations, then what he seeks is very possible.
Pete Wishart
I am very grateful to the right hon. Gentleman for saying that; it does bring a degree of comfort. I recognise that there is an attempt to try to resolve this matter. He clearly recognises that it is a huge issue for us that has to be resolved. The whole Scottish legal establishment is united in calling for that. I welcome what he said and hope that as we take the Bill through we will hear more about it and can ensure that the Scottish courts are satisfied and that we do not lose their centuries of experience in dealing with patent issues.
I want to say a few words about clause 21, which will require the Secretary of State to report on the activities of the IPO and how it has supported innovation and growth in the United Kingdom. I do not think any Member would argue against that. It is a very positive step that provides a bit of a focus for the IPO’s activities. However, any measure must be quantified, and it must include some reference to how those activities have supported IP-dependent businesses and IP rights.
One major battle throughout the Hargreaves process was all the stuff about economic evidence. I remember when the creative industries used to present evidence to us. The work done by the creative industries to inform the Government about their activities—it was sometimes commissioned by the Government—was arrogantly dismissed by Hargreaves as “lobbynomics”. However, the Intellectual Property Office made some heroic assumptions to support its copyright exceptions. It said that if all 10 of Hargreaves’s recommendations were introduced it would make a difference of between 0.6% and 0.9% of GDP. Come on! It expected us to believe that. It therefore works both ways.
Some of the other heroic assumptions underpinning copyright exceptions were totally unbelievable. We in the all-party group on intellectual property asked IPO officers to come in and explain them, and we found what they said totally unsatisfactory. The annual report must therefore be credible and robust, and it must respect everybody in the sector. The Government should not just leave it to the Intellectual Property Office to concoct some figures and expect us to be happy and satisfied with them. At some point, we will have to be able to challenge the assumptions and look at what underlies them, because we cannot have some of the nonsensical economic assumptions that we had in the past.
Lastly, I want to return to Google. This all started with Google, did it not? It was kicked off by the “Googlesburg” address, but let us try to turn that on its head. The issue was all about whether a Google could emerge in the UK because of restrictive intellectual property practices. What about looking at Google itself? It is a digital behemoth—there is nothing bigger in the digital world—and the gatekeeper for all our content industries. Nothing happens without Google, and nothing can go through its prism without satisfying it in some way. It distorts the digital market, and it is damn good at ensuring that it keeps its predominant position. All its activities are about maintaining its predominant, almost monopoly position as the gatekeeper of content. It produces no content of its own—not a bit—but, yet again, the question all comes down to how content is measured and assessed.
Mr Willetts
With the leave of the House, I would like to respond briefly to the many issues raised in this useful debate.
Although many of the interventions went beyond what is in the Bill, I appreciated the general welcome for the specific proposals, in recognition of the importance of protecting intellectual property. It is sometimes said that behind every fat person is a slim person trying to get out; on this occasion, we have a slim Bill, but there seems to be a fat Bill that Members are trying to impose on us. This slim Bill, however, is intended to achieve some of the specific objectives set by Hargreaves, and I believe we are doing that in the right way.
Several Members, including the hon. Member for Lewisham West and Penge (Jim Dowd), mentioned the IP index. We score well internationally on the quality of our IP protection, including being second in the world in respect of patents. The area where we underperform—down to fifth—is design. That is why this Bill specifically focuses on that area where our performance is weakest, as our legal framework on design is inadequate.
Several Members raised the specific issue of whether the new criminal offence we are introducing should extend beyond registered design to unregistered design. I have said at several points in the debate that we are absolutely up for consultation, and I intend to introduce amendments in Committee. On this particular issue, however, we do not take the view that unregistered designs should be subject to a criminal sanction. Our view is that the design registration provides a clear starting point for any prosecution and includes important information such as the precise scope of the protection of the design and who owns it, which would be important for any criminal prosecution. It can be difficult, however, to track down information about unregistered design—such as who owns it and whether it is still protected. There can be uncertainty about whether a design is free to use. Unlike the UK registered right, the UK unregistered right can protect functional designs, and where these are complex and highly technical, it could cause difficulties in criminal cases. If we think about the risks of injustice from criminal sanctions in cases where unregistered designs are involved—we have had a long consultation on that—we believe that we have got the balance correct in extending criminal protection to registered but not to unregistered designs.
There were several questions about the working of the Intellectual Property Office, including from my hon. Friend the Member for Cities of London and Westminster (Mark Field), who asked where the responsibility for IP lies. Let me be clear: the IPO, which is an agency of the Department for Business, Innovation and Skills, leads on IP policy across the Government. It works closely with a whole range of Departments and organisations, including the Treasury and the Department for Culture, Media and Sport. It worked well with the Treasury on the patent box, for example, which has been a real boost to our IP-generating industry, and it accessed finance for IP intensive businesses, while it has worked with DCMS on copyright enforcement online.
Mark Field
I would not want our earlier exchanges to be seen as negative about the IPO in any way. In my small number of dealings with it, I have been impressed by its clear focus and its international vision. It was clear from what Members of all parties said that dealing with the issue of intellectual property seems to be divided into a number of different Government Departments. It is good to have a welcome confirmation from the Minister today that ultimately his neck is on the line for this matter.
Mr Willetts
I did not know that I had confirmed that! I must have strayed into that confirmation, as I was about to say that we are also fortunate in having a Minister for intellectual property. On several occasions when Members were talking about the need for a Minister for intellectual property, I could see that Minister up in the Gallery. Those comments were a disservice to my colleague, Viscount Younger of Leckie, who does an excellent job as the Minister for intellectual property. The IPO does have an enforcement role, and it works in parallel with the Home Office and other enforcement authorities, as the hon. Member for Bishop Auckland (Helen Goodman) mentioned.
Several Members, including my hon. Friend the Member for Hove (Mike Weatherley) and the hon. Member for Perth and North Perthshire (Pete Wishart), asked where we are on copyright exceptions and what the next stages will be. There has been a consultation process on these provisions. It is correct to say that it has taken a long time; it is a complicated question. Given the technical nature of some provisions, we put out some draft regulations for further consultation, adding another stage to the process.
Mr Redwood
Will the Minister adjudicate on the little dispute about whether it is possible for an artist or theatre, for example, to take a very old play or song—it may be a non-trad or written by somebody long dead—and take over the copyright? I thought that was not possible— I thought it was possible to get a copyright for the production, but that a non-trad could not be copyrighted.
Mr Willetts
Sorry, was it Durham? I am not aware of Simon and Garfunkel prosecuting folk musicians for singing their version of “Scarborough Fair”. I do not think they ever did that, and I very much doubt that the law would have sustained them if they had tried to do it.
What the Government intend to do on copyright exemptions is to lay down the regulations in February, and they will then be subject to a debate under the affirmative resolution procedure. We understand the need for individual consideration; the regulations will not be completely bundled up.
Time is tight, so let me move on. Several Members raised the issue—and I completely understand the strong feelings about it—of links to illegal sites via Google, pirated content and so forth. We in the UK have led the way on intervening against criminal IP infringement through intermediary services. We have set up a new police unit that uses money laundering regulations to force removal of payment services from infringing sites. Similar work is being done with advertising revenue and domain registration. We are absolutely tackling this issue; we are ahead of the rest of the world.
My hon. Friend the Member for Hove asked about the important issue of education. I welcome the work he does as intellectual property adviser to the Prime Minister. Again, we are trying to make progress in this area. We have seen the IPO do more to build an environment in which IP rights are properly respected. We absolutely understand the importance of education.
That brings me to interventions about the IPO’s annual reporting, which will be wide ranging. It will be able to comment on topical issues that developed during the year, looking ahead. It will certainly be able to report on what is being done on education so that people understand the danger of not properly valuing intellectual property. As we heard in the intervention from my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), in doing so, the IPO will contribute significantly to economic growth by ensuring that innovators, particularly in design, that are essential for our economy’s performance, are at last properly protected against people who rip off their designs and do not properly respect the value of the work they have done. This Bill brings important protection to those designers. For that reason alone, if for no other, I greatly hope that the Bill will be supported on Second Reading across the House.
Question put and agreed to.
Bill accordingly read a Second time.
Intellectual Property Bill [Lords] (Programme)
Ordered,
That the following provisions shall apply to the Intellectual Property Bill [Lords]:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 30 January 2014.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of the proceedings.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on Consideration.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Anne Milton.)