rose to ask Her Majesty's Government what steps they are taking to protect intellectual property rights for the creative industries.
My Lords, before asking my Unstarred Question, I want to say that there is an element of Alice in Wonderland, when I look at the time allowed. The Order Paper states that we are time limited to one and a half hours, but that the time for speeches is expected to be limited to 10 minutes. There are precisely two speakers and the Minister—two times 10 makes 20, plus 12 minutes for the Minister makes 32—and we have one and a half hours. Perhaps the Government do not feel that intellectual property is important, but we do. However, sadly, I have culled my speech to 10 minutes.
I am asking this Question in your Lordships' House today because I firmly believe that we are the best in the world as creators and originators of novel and inspirational works. Currently we are in the midst of an era which presents tremendous opportunities for commercial change and development in the creative industries as a whole. Solid intellectual property protection lies at the very epicentre of sustaining and promoting vibrant and fresh new works from the talented individuals of this country. As the noble Lord, Lord Evans, said only last week in response to a debate on the arts as a tool for urban regeneration:
"the noble Baroness, Lady Buscombe, dealt with something that I believe goes to the heart of the matter; that is, intellectual property rights. As matters develop, it is becoming increasingly obvious that there is almost a need for new law to protect those important and developing rights.—[Hansard, 16/6/05; col. 1360.]
There is no doubt that if we are to sustain our leading edge in the creative industries and to compete successfully in global markets, we must have effective IP protection. In particular, copyright management and effective protection is an issue which is central to the success of the creative industries. Moreover, over the past few years copyright has taken a front seat and concerns relating to the prolific and burgeoning industry in Internet downloads have been increasingly well publicised.
The current legal framework has substance and a number of interventions from Europe has successfully modified our national provisions to cope with changes resulting from ever-improving electronic methods for sharing information. But are the Government doing enough to ensure that loopholes in the current legislative patchwork are quickly closed off and that a sensible review of potential future improvements, piracy being one such area, is being conducted in concert with the rest of Europe?
It is vital that this important area is kept under the spotlight and it is for that very reason that I first tabled this Question over a year ago. During that period the Government have made strides to improve publicity and education in intellectual property matters. I agree with at least one aspect of their current strategy; that existing creators' rights require better and more effective enforcement, particularly in view of the increase in piracy. However, a recent proposal put forward by the Minister in another place, James Purnell, that,
"the IP framework should be reviewed to determine if it is appropriate for the new age of fast-paced technological developments", is too ambiguous. Is the Minister just trying to backtrack with warm words following eye-catching announcements in the media heralding stronger IP protection? If so, he must know that this strategy can actually create uncertainty and instability in the marketplace, and is potentially harmful.
While I agree wholeheartedly with any endeavour to draw out the industry's problems, my wonder is whether anything is being delivered. Moreover, are the Government paying attention to what the EU Commission is already doing? The Commission has itself launched very similar initiatives to look at the IP framework, albeit on an EU-wide scale.
On that European note, this year, as a consequence of its Better Regulation initiative, the Commission will conduct further extensive reviews of a number of areas, including copyright. The Commission intends to review the practicalities of how copyright and related rights are commercially exploited on a day-to-day basis. Essentially, the fact that copyright is still largely administered on a national level leads to certain inherent inefficiencies in the regulation of rights-rich global media such as the Internet. For example, the way in which collecting societies do business in each of the EU member states may well come under scrutiny during the Commission's review.
The Prime Minister's imminent presidency of the EU offers a gilt-edged opportunity to press our claim for stronger IP legislation and enforcement. This includes increasing the term of protection for sound recordings. Can the Minister confirm tonight that the Prime Minister will deliver on this opportunity?
On the domestic front, the Government's announcement that they will help to fund a study to assess the viability and possible shape of a dedicated music council has been welcomed with open arms by the industry, but I urge a note of caution in that any partnership with government must not diminish the industry's freedom to question government policy and direction. I do not want to be a killjoy, but I urge the industry to ensure that this is not just another popular headline that serves to deflect genuine delivery.
Talking of delivery, surely it is now time to deal with the duration of copyright for performances and sound recordings. An appropriate duration is fundamental to the ability of the music sector in Britain to continue to take a leading role, culturally and economically, on the international stage. While performers in the United States are assured of 95 years of protection, the rights of artists residing within the UK expire after just 50 years, and during their lifetime.
How can a 50-year term be deemed proportionate when the songwriter enjoys copyright in his lyrics for a term of life plus 70 years? This obvious inequality serves to place our music industry on a weaker footing in comparison with other countries such as the USA. Even Guatemala and Honduras enjoy more extensive protection than us. The distinction in copyright term between Europe and the USA serves to confuse and bewilder artists and producers alike. The commercial impact of such an erosion of confidence in European legislation is that both performers and producers move abroad in search of better terms.
This is a well known problem and one that causes commercial concern to the industry as a whole —and that includes composers and songwriters. The value is in the creative content. A timely and certain remedy must be found.
I mention the industry "as a whole" for good reason. It is a common conception that only wealthy, multinational, commercial record companies and publishers suffer as a result of erosion in copyright value. It is this fallacy that brings about limited sympathy from the general public. However, the damage runs much deeper. The effect of reduced profits at the top of the tree means reduced budgets and tighter deals with original and creative composers, musicians and songwriters. Less chance, less opportunity and less prosperity is the harsh reality faced by this group of individuals. Funding new artists becomes harder and as a direct result talent may remain untapped, undiscovered or unfulfilled. Improvements in the extent and enforcement of copyright could very well serve to benefit everyone from the top down.
This is about looking after our innovators. Providing for the benefit of the industry's major players ensures that we are better placed to extract and exploit the benefit of our strong individual talent base.
I turn now to the infringement of intellectual property rights. In essence, it can take just one casually uploaded album or track to devastate the legal market for that recording. There is a perception that downloading music and film from the Internet is a victimless crime; this is simply not the case. There are essentially two aspects to consider: the first is the problem with our friends, colleagues and children downloading music from the Internet; the second is the more serious, well organised criminal syndicates which extract many millions from the music and film industries on a daily basis. Research indicates that the value of the black market in counterfeit and pirate DVDs was at least £600 million in 2004, with the figure for the music industry being very similar. Furthermore, over £320 million of music sales were lost over two years because of illegal downloading in this country.
In relation to hardcore piracy and criminal activity, an opportunity to remedy the problem is being presented by the enforcement directive, due to become law in April 2006. There are concerns that the Government are delaying implementation of the damages provisions which will allow strong and dissuasive punishment for criminal activity. Can the Minister confirm that the enforcement directive is on course to enter the statute book as planned?
But strong legislation is not the end of the problem. Effective enforcement is the last step in catching and prosecuting criminals. At present there is simply no incentive for poorly funded and understaffed trading standards offices to launch and persevere with long, drawn-out prosecutions against counterfeiters. The Government are simply not doing enough to help trading standards offices. More must be done on an urgent basis to send a message to criminal syndicates that they will be effectively prosecuted and that the risks are far from minimal. Trading standards offices must be properly funded.
Also, the planned reform of the Patent Office is crucial to achieving an efficient and robust IP framework. The unmistakable challenge will always be that of how to ensure that we get a return on our investment, be that in artists and repertoire or research and development. The value of our inventions and creativity must not be allowed to ebb away through illegal copying. A central plank of government policy for the next few months should be in reforming the Patent Office into a strong, politically led champion of intellectual property. One of its core terms of reference could fall directly under the Labour Party manifesto commitment to,
"ensure that content creators can protect their innovations in a digital age".
If only I was allowed the time to touch upon so many more important concerns held by the wider industries. For those who make photography their life's work, protecting their copyright goes beyond the emotive; it is their livelihood. Without adequate protection the photographic image—tomorrow's cultural heritage—and those who create it will cease to have true value, and without adequate protection a profession dies. Photographers are concerned that, in the digital age, information supplied with the digital image about copyright and the creator is stripped away, often automatically, so that in a matter of moments the world is awash with "orphan" images.
In addition, recent changes in design law have impacted upon design rights and copyright protection for products as diverse as clothing, toothbrushes and cars.
Much of what I have said should, in an ideal world, be underpinned by a change in our consumer culture. One way of bringing that about is through better education, as the key to driving a healthy respect for intellectual property rights. We have to fund, teach and educate at an early age to enshrine the values of intellectual property as a bundle of rights that can be used as both a sword and a shield. In the words of David Arnold, Fellow of the British Academy of Composers and Songwriters and one of a new generation of exciting and innovative composers,
"we need to teach young people that creativity has value".
There is work to be done and I urge the Government to deliver.
My Lords, I congratulate the noble Baroness, Lady Buscombe, on initiating this debate on a very important issue. I share her bafflement at the time limits—I see that she busted them quite successfully and I shall do the same probably—but I suspect that this is due to the Companion rather than to the Minister, who I am pleased to see is in his place today, contrary to the advanced billing.
This debate is extremely active, both between countries and within countries. I came back from the United States this morning and, as one does, I picked up the literature that was lying around in the airport lounge. I have the intellectual property issue of the Technology Review, produced by MIT, in which two extremely distinguished professors of law—one at Stanford and the other at the University of Chicago, who are heavily engaged in this area—debate the potential outcome of the Grockster case, which is before the US Supreme Court. This case concerns downloading peer-to-peer, as it is called, on the Internet.
In a sense, that case is a successor to the Napster case, although it is not about deriving a work from a central source but from other individuals—known as "file sharing". It is an extremely important case which, no doubt, will heavily affect us in due course. It is just one example of where the debate is raging.
Another area concerns the debate which is raging between countries. WTO accession has meant that China and India will have to observe copyright law to a much greater extent. Many of the arguments between governments lie in trying to persuade some of the developing countries that it will improve business confidence if they observe copyright fully and will help direct inward investment to those countries. So copyright is extremely important both for international trade and for domestic creative industries.
I have a long-standing interest in copyright. I used to work for a law firm which specialised in this area. We ran the Redwood case—the famous music copyright case—but unfortunately we lost it. I was also at London Weekend Television when, in the 1980s, it was involved in the thick of licensing and negotiating rights for what were then the new areas of video and satellite. The motto of copyright laws in those days was very much, "What is worth copying is worth protecting". Now, however, with new works that can be made from samples both of music and film, the world has become rather more complicated. We also, of course, had the debate over moral rights, particularly in the art world. They are now available under the EU copyright directive of 2000 and artists are entitled to payment on resale of their works.
Many debates are taking place. I shall come to the issue of product counterfeiting in a moment—it is of extreme importance and of great concern to a number of industries—but I believe that it is the Internet which will in future pose the biggest challenge to copyright law. Copying is now so much easier. First it was text, then graphics, and now music downloads are quite commonplace. Soon film works will be downloadable as a matter of course when compression software and computer memory improve.
This raises the issue—the subject of the US debate I mentioned earlier—of how much, to use the expression of Professor James Boyle, "digital barbed wire" is needed to put round original works and, by contrast, what should be allowable under the fair dealing provisions. What level of protection is appropriate and what are the key problems that need to be combated? For instance, what lessons for the future does the original Betamax case have for us? Limiting technology too much may lead to infringement but may also lead to beneficial uses.
The newspapers in this country are currently full of details of the action that the British Phonographic Industry is taking against people—often very young people—for multiple copyright infringement through peer-to-peer music downloading. I believe that the BPI is right to take this action. Indeed, I believe that the action taken by the BPI, by FACT, by the Alliance Against Counterfeiting and Piracy and by other organisations is protecting in the correct fashion the rights of their members. But when it comes to enforcing judgments against parents—particularly where, out of ignorance, they did not really understand what their teenage children were doing—I hope that the settlements will not be too draconian. I believe that this is a very necessary form of public education but I hope that the BPI, in particular, is not too punitive when it enforces payment against these parents.
As to Grockster, I very much hope that the rights of the film companies will be firmly upheld but, by the same token, I hope that the film companies will begin to establish—in the way that the music industry did with iTunes and other MP3 downloading charges—different legitimate forms of licensing for film works. It may be that the very complicated release dates—which go in stately fashion from theatrical release, to DVD, all the way through to terrestrial free broadcast—will need to incorporate a window which is applicable to the Internet and will allow people to download legally in the way that it is now possible to download music.
It would be very useful to know whether the Government are considering the implications of these cases. I am sure the Minister will refer to this in the course of his winding-up speech and I look forward to it. I also hope that he will respond to the noble Baroness, Lady Buscombe, on the issue of the extension of the 50-year copyright rule on songs. We believe that the Government are favourably disposed towards it but we have not seen in hard black and white that that is the case. It is, of course, to some degree controversial, but I believe that there is a very good case to be made for international harmonisation. It seems fairly ludicrous that there is protection for 95 years in the United States and for only 50 years here.
Quite apart from these issues, there are two areas in which urgent government action is vital. I refer, first, to the area of counterfeiting. I am reliably informed that this costs the creative industries something of the order of £11 billion in the UK and that the businesses concerned employ 1 million people. One of the puzzles is why Sections 107A and 198A of the Copyright, Designs and Patents Act 1988 have not been brought into play. They would give trading standards officers analogous rights to those which are available over trademarks. I do not understand why the Government have not brought those sections into effect. It is all very well for film companies and others to bring copyright infringement proceedings, but if those rights cannot be enforced by trading standards officers—for instance, over counterfeit DVDs—then surely that means they are not nearly as powerful as they should be.
There are issues about what progress is being made regarding the EU harmonisation enforcement directive. I was interested that the noble Baroness, Lady Buscombe, mentioned this. The UK presidency will be important. The Secretary of State, Tessa Jowell, has said that the UK intends to use its presidency to have a debate about further rights and the enforcement of copyright for the creative industries. That will be extremely valuable. So I hope that progress will be made and that the Minister will address that point in his reply.
There is a further issue of great importance to composers, particularly those who compose music for television programmes. When they are contracting with television and production companies—the BBC is an honourable exception—they have to contract with nominated publishers on rather disadvantageous terms. That is anti-competitive behaviour and it should be prohibited. I am in favour of copyright protection and contractual rights but not when there is not fair competition or there is coercive behaviour. That applies across the board. This is clearly an area in which Ofcom needs to be proactive; if it does not have the powers to be proactive, it should be given them. I should be grateful if the Minister could address that. What is probably needed is a code of practice prohibiting such behaviour.
Finally, we need a better mechanism for the Government to stay abreast of these issues in a joined-up way. I was very interested in the provisional conclusions on the review of the Intellectual Property Advisory Committee's work. Can a reconstituted committee play a really effective role? If we are to make this a priority for our EU presidency, we need the best possible advice and all the right people on board.
A few years ago, the creative industries intellectual property group, chaired by Kim Howells, produced an interesting report. It contained very interesting conclusions about public education in this area. That is important, and the noble Baroness, Lady Buscombe, rightly alluded to it, but it is only half the battle. We must ensure that those who wish to use samples to create further works of art on the back of existing copyright are not unduly disadvantaged. That will benefit the industry and ensure that the consumer is not overly burdened with rights. If we are to use our presidency to this end, there should be an effective body advising the Government in this respect. I hope that the Minister will address that in his reply as well.
My Lords, I am delighted to take part in this debate and to respond for the Government. The billing of my noble friend Lord McKenzie was on the basis that I was trying to come back from Brussels. In the event, I managed to do this with two minutes to spare.
This is an extremely important and interesting area. I say to the noble Baroness, Lady Buscombe, that whatever the timing of the debate, the Government can show that they have been taking this issue very seriously for the past 18 months to two years, since we published the innovation report in November 2003. In it we made a major statement about the importance of intellectual property rights and of the Patent Office taking forward an agenda involving enforcement and education as part of the importance of this area in the knowledge economy. I am sure that the noble Baroness is aware that our manifesto contained a reference to intellectual property and the creative industries. I failed to see such a reference in the Conservative Party manifesto, but then it was, of course, a very short document.
The noble Baroness has already highlighted the importance of intellectual property rights for the UK creative industries. Intellectual property is very much at the heart of the creative industries, so I welcome the opportunity to set out the Government's agenda in this area.
For the purposes of this debate, I should like to make it clear that in talking about the creative industries, we are talking about music, film, software, publishing, design and broadcasting. These are all industries which depend critically on individual creativity, skill and talent as the starting point for their business success.
The creative industries matter a great deal in our economy. They grew by an average of 6 per cent per annum between 1997 and 2002—twice the rate of the average growth for the whole economy during that period. Employment in the creative industries grew at a rate of 3 per cent per annum between 1997 and 2003, compared with 1 per cent for the economy as a whole.
These figures, which are part of the statistical estimates for the creative industries compiled in August last year, are impressive. They show that the creative industries are an enormous asset to the UK and are growing very fast.
The creative industries have, for some years, been facing the challenge of new technology—the digital revolution, including the expansion of the Internet and broadband roll-out. In a world where digital material can be passed over networks, including the Internet, almost instantaneously, the temptation for people to share music and other protected content illegally is great.
The music industry has been at the forefront of seeing its traditional business models threatened by illegal uploading and downloading of its copyright material. New technology therefore means that it is much more difficult to protect IP and preserve business models of the past. There is, however, cause for optimism. We are seeing more and more creative sectors identify and embrace the opportunities of new technology to grow their business. The music industry is at the forefront of this transformation, with a marked expansion of legal download sites over the past year or so. A recent newspaper report suggested that the number of legal downloads could overtake illegal activity in the next 12 months. It looks as if the use of new business models and careful legal enforcement of IP is beginning to bring this problem under control, and we support the action which has been taken by the music industry to do so.
On the protection of intellectual property rights, our recent business manifesto commitment clearly shows our strong commitment to tackle IP crime and other types of infringement. IP crime is a very serious threat, and a considerable amount of work has been done in recent years. That includes legislative changes in 2002 to increase the maximum penalties applying to copyright theft. In 2003, the law as it applies in the information society was clarified, and a new criminal offence to catch the most prolific illegal uploaders was created.
As a result of the innovation report, which acknowledged the damage caused by IP crime to businesses dependent on IP, we set up the IP Crime Group, led by the Patent Office. This brings public sector enforcers and private sector right-holders together with government to deliver more effective enforcement on the ground.
Last year we launched the IP Crime Strategy to underpin the work of the IP Crime Group. This year we published the first annual enforcement report, which will provide a firm base line from which we can measure the success of our future activity.
We are also heavily engaged in setting up regional hubs for trading standards officers, modelled on the very successful one in the north-west. And we are refining the training resources available, something we specifically promised in the business manifesto. In the coming months, the results of better co-operation and co-ordination under the IP crime strategy will start showing.
The creative industries are clearly helped by a commitment to deal with IP crime. However, in recognition of the challenges and opportunities faced by the creative industries as a result of rapid technological advance, I set up the Creative Industries Forum on Intellectual Property jointly with the former Minister for the Arts, Estelle Morris. The forum, comprising industry and other stakeholder interests as well as Ministers, set up three industry-chaired working groups to explore certain issues in more detail.
My Lords, I was going to come to that issue shortly, but perhaps I may help the noble Lord immediately. This has been an issue since 1994 when the Trade Marks Bill was enacted. Since then, it has not been enforced because a government regulation states that if more jobs are referred to trading standards, matching resources must be put into them. We are trying again to talk to all the relevant stakeholders to find a solution to this situation. I hope that we can bring forward legislation that allows us to put in the extra resources and make certain that the Act is enforced. It is a totally unsatisfactory situation. It has been going on since 1994 and it is about time that we brought it to a conclusion.
To reiterate, the Government have set up the Creative Industries Forum on Intellectual Property. One of its working groups has been examining IP enforcement issues; another group has looked at better education about, and communication of, IP messages. We welcome the care with which these industry-chaired working groups have investigated these extremely important subjects. The forum has therefore done some useful work in these areas which we will be taking forward in the future. The Government will soon provide a response to the detailed recommendations that these working groups have produced.
However, many of the recommendations on IP crime are linked to the work within the framework of the IP crime strategy. I am happy to announce that we will be establishing a subgroup of the IP crime group specifically for the creative industries, so that they have a voice at the heart of our strategy.
However, not all infringements of copyright can, or should, amount to a crime. Most people agree that a different response is needed to deal with online infringement. The promotion of a better understanding of copyright, and the impact of this illegal activity on creators, many of whom are struggling artists at the beginning of promising careers, is one approach to online infringement. The education and communication working group of the forum has identified the need to ensure that messages are positive and empowering, relevant to people's lives, and not just negative and piracy-focused. We are looking very carefully at how we can take account of these ideas as we develop and expand our IP education programmes.
In our manifesto, we also made a commitment to modernize copyright and intellectual property regimes. Our IP regime must, of course, be fit for a digital age, providing an appropriate and fair balance between the interests of different stakeholders. Creators, entrepreneurs and creative industries must be able to invest, knowing that they will be able to get a proper reward for their investment.
This manifesto commitment was inspired by our concern that business opportunities, dependent on content protected by IP, are maximised for the benefit of all in the IP value chain. We are therefore delighted that the work that was started by the industry-chaired business opportunities working group of the Creative Industries Forum will be continuing.
As this work continues, one of the most important issues facing those who are trying to maximise the benefits of new technology for the creative economy is the scope for using digital rights management. This can enable exciting new uses of protected content, while keeping it secure and deterring or preventing illegal use, such as online infringement. Apple's iTunes is just one example of effective use of digital rights management. It is relatively hidden, so most users will never notice the restrictions on use.
As a means of giving consumers what they want in attractive new ways, digital rights management has much more to offer than we have seen so far. But issues such as interoperability and technical standards for digital rights management and other technologies and devices need to be considered.
We will be carefully monitoring how this work develops and considering whether any other IP issues should be explored or addressed. As part of its response to the manifesto commitment, the Department of Trade and Industry will be working very closely with the Department for Culture, Media and Sport on a new project looking at intellectual property issues. Along with my honourable friend the Minister for Creative Industries, James Purnell, I will be chairing a high-level group of officials to drive this project forward. This will build on the very useful work that has already taken place in the forum. We do not envisage that this group will look again at recent copyright law changes or at any major changes to the IP regime. I recently heard people from some of the key creative sectors say that, since our work in 2003 on implementing the EC Directive on Copyright in the Information Society, copyright law in the UK is generally in a good state. We will be checking that no issues need to be addressed at this time.
We are extremely pleased to be supporting a conference in the middle of our EU presidency looking at the creative economy. This will provide an opportunity to stimulate a dialogue throughout Europe on delivering value for all in the IP value chain, based on a robust but fair intellectual property regime. Many of the issues on which we have touched today are likely to be developed further at that conference.
Perhaps I may deal with one or two of the specific issues that were raised in the debate—
My Lords, I am sorry to interrupt the Minister again. There is a slight paradox here. He said that there is no intention to disturb the current state of copyright law in this country, yet the very subject matter of the conference that is planned for the middle of the UK presidency seems to be whether copyright protection is adequate. If it has already been decided that it is adequate, why is there to be a debate about it as part of the UK presidency?
My Lords, there are great concerns in the creative industries about this area, but the key issue is not the intellectual property rights or the legal framework—although we want to take another look at that to make certain that it is all right. The real concern lies with digital rights management and the business models that go with it. There is not a debate about who has the intellectual property rights, but there is a technical debate, as a result of the digital age, about how one controls the material. That is about business models and enforcement rather than the legal side. We need to debate that and make it clear.
A question was raised about the support and increase in the term of protection for sound recordings. We have not made any decisions yet. We are looking at the issue, and we will be considering the impact on all stakeholders; that is, those who use sound recordings and consumers, as well as those who have rights in the recordings. I should point out that any change would require a change to the EC directive that harmonises all copyright terms across the EU. Therefore, no proposals are on the table at the moment to do this. So it would be a major change.
A question was raised about the EC IP Enforcement Directive. UK law is largely consistent with the provisions in the EC IP Enforcement Directive, which was adopted last year. The main advantage of this directive is that it will bring the enforcement framework in some other member states up to the high levels that already exist in the UK. Later this year, we will be issuing a consultation paper on the changes that we think are necessary, so the directive will enter the statute book on time.
Those were the major questions that were asked. There was a question about the Intellectual Property Advisory Committee. We are looking again at how we could restructure that. It has not achieved all that we hoped that it would achieve. The question is whether we should maintain a body outside the Patent Office, with a parallel policy-making process, or whether it should be firmly in the middle of the work of the Patent Office. We are now looking at that.
The debate today has allowed a number of very important issues to be explored. We acknowledge the crucial role that the creative industries play in our economy—it is a major role these days. As I hope I have just shown very briefly, we have already made much progress on the IP issues that matter to this sector, but a lot more work is in the pipeline to permit the full potential of the digital revolution to be realised in this most important area of our economy.