HC Deb 18 December 1985 vol 89 cc522-30 7.20 am
Mr. Jeremy Hanley (Richmond and Barnes)

I welcome the presence of my hon. Friend the Minister for Information Technology. I apologise for causing him to rise from his slumbers at such an hour, but I know that his concern about the subject of the debate is such that he will not begrudge the hour. The title of the debate is "Copyright infringement", which is a rather bland title for what is often regarded as an unexciting subject. There are many who have thought that a little piracy and a little copyright infringement does no harm. It has been thought that a little stealing from those who already have enough, who already earn enough and who are employed is all right. It is considered that they are greedy if they want to stop any form of copyright infringement and that they can afford to bear it. That is the sort of attitude that so often pervades our society.

Recent events have changed all that. The public are now well aware of the depths to which the pirates can sink. With the recent cases of piracy involving the Live Aid concert, the title of the debate would perhaps be more appropriate if it were "Stealing from the Starving".

The piracy of intellectual property is a world-wide industry. It has been estimated that between £800 million and £1,000 million worth of sales of audiotape worldwide are affected. It is probable that sales of videotapes and films to the value of £2 billion are affected. Books are pirated to the tune of £300 million worldwide on the best current estimate, and there is also piracy worldwide of computer software, textiles and other designs, motor parts, industrial and commercial products, and even of brand-name pills and medicines which are pirated and manufactured out of salts and sugars. The pirated pills and medicines do no good but at worst they can cause death because of their substitution.

I am sure that many hon. Members will have read and discussed the recent cynical attempt to cash in on the suffering of the starving millions in Africa by the Indonesian pirates, who have produced bootlegged tapes of the Live Aid concert which took place in July.

The British people have a good record of providing bilateral and multilateral aid, both through Governments and through private individuals giving generously. No doubt the House will remember that the Live Aid concert galvanised the world. It produced an international inspiration to give, and an international recognition of the fact that so many people, through no fault of their own, were starving and in need of help. We recall that 140 artistes gave of their services for no fee and performed live. Mr. Bob Geldof, in his unique and abrasive manner, cut through the niceties and red tape, put the show on the road and tapped the hearts and consciences of millions.

Perhaps I should explain the difference between bootlegged and pirated tapes. A pirated tape is when the manufacturer takes an existing tape, copies it, sells it—thus breaking copyright—and keeps the proceeds. A bootleg tape is when a manufacturer records something that does not exist on tape—perhaps a concert on television, or even a live concert. He manufactures and then sells the tape.

There are no original tapes of the Live Aid concert. There has never been a genuine, original tape of that concert. Many people may have recorded it in their homes, many people may even have recorded it on video machines, but there is not a single commercial tape that is legitimate. People may question why it was not recorded, and feel that an opportunity may have been lost. They may ask whether Mr. Geldof is causing piracy by creating an unfulfilled demand. The truth is that 140 artistes have 140 lawyers, and to get 140 lawyers to sanction recorded music for sale is a devil of a job. Mr. Geldof gave guarantees that there would be no tapes until such time as the lawyers reached agreement.

After all, the concert was live and some of the performances were fairly instant and unrehearsed. Some of the artistes might not have wanted their contribution on a live platform preserved for posterity and sold on tape. Many of the performances were quite brilliant and inspired, yet they were not in any way performances designed to be recorded and sold to the world. They were an attempt to encourage people to give of their generosity as the artistes were giving of theirs.

The tapes that are being pirated throughout the world are labelled, "Original". The bootleg tapes of the Live Aid concert even state on them, "For African famine relief' in an attempt to convince consumers that they are not only buying good music, but are contributing to a worthy cause. Not a penny of the proceeds of those tapes that are selling in vast quantities throughtout the far and middle east, even in Italy—and, who knows, even here—reaches the Band Aid Trust. The proceeds are pocketed by the pirates as private gain.

The International Federation of Phonogram and Videogram Producers has estimated that more than 1.5 million cassettes have now been sold. The figure might even be nearer 2 million. According to Kevin Jenden of the Band Aid Trust, those proceeds would be enough to feed 2 million people for a month. Who has benefited? It is a few Indonesian millionaires.

The Live Aid recordings are currently on sale all over the middle east, especially in Saudi Arabia. As I said, they have even reached Italy. Boxed set LPs have been uncovered in italy, but they were also made in Indonesia. Those buying the cassettes are being led to believe that their money is going towards helping the starving in Africa, whereas in reality it is going into the pockets of the unscrupulous. At least four bootleg editions of the Live aid concert are on the market in the middle east, all manufactured in Indonesia. Some of the cassettes bear Indonesian Government sales tax stickers, which give a unique production number to each recording. The boxed sets of LPs found in Italy also carry those tax stickers.

In Saudi Arabia there are reports that at least 1 million copies of the Live Aid cassettes have been sold directly to that country because of demand. There was a story yesterday of a new tape cassette factory being opened in Indonesia with a production line capability of 6 million cassettes a month. The tax stickers that appear on the Indonesian cassettes show that the Indonesian Government have taken 15 US cents every time one is sold or exported. That means that the Indonesian Government have collected US $300,000 in money which should have gone to Live Aid. That is just a fraction of the money that has been made by the manufacturers of those bootleg tapes. On the other hand, the starving in Africa have received nothing from this industry.

Legal action can be taken in some countries. In Italy the industry is now carrying out nationwide raids on retailers of those bootleg tapes. To date 10,000 bootleg LPs manufactured in Indonesia have been seized in Italy. Meanwhile, in Indonesia, virtually nothing happens. The copyright law protects only local recordings, and an estimated 30 million pirated cassettes are exported every year. The Indonesian Government claim that all exports of cassettes to Saudi Arabia are, according to a letter that I have, either recitals of the holy Koran or Indonesian Arabic music recordings. However, the facts speak for themselves. How can the Indonesian Government claim that the exports are only of the holy Koran w hen the stickers show that they know very well what they are collecting tax upon? The Live Aid bootleg is not a recital of holy works; it is a deliberate rip-off.

The message of international anger at the Live Aid piracy is beginning to embarrass the Indonesians. Mr. Mochtar Kusamaatmandja, the Indonesian Foreign Minister, has announced that he has asked the Justice Ministry to take action against the pirates. That may sound fine, but the problem is how. In response to previous complaints by the record industry, the Indonesians have always replied that piracy is not illegal under Indonesian law as no foreign records are covered by Indonesian copyright, as I explained. Only yesterday it was announced in Indonesia that the bootleggers were donating £22,000 out of the kindness of their hearts to Lye Aid. That was meant to be compensatiom for the millions of profit that they have made. I do not believe that that is a generous gesture at this Christmas time. It is a penny in a bucket, and one of the most cynical Christmas presents that I have ever heard of.

Live Aid is only one example, albeit perhaps the most despicable of late, of a much wider problem. The American charity record "We are the world" has been widely pirated, and many others, too. In fact, any successful record, whether for charity or not, is likely to be copied by the Indonesians and others within weeks of release.

That is costing the legitimate industry over US $1 billion per year in lost sales. The British music industry alone is losing almost £100 million per year from only six countries—there is more from others. Those countries are Indonesia, Singapore, Taiwan, Korea, Nigeria and Malaysia. In Singapore, tape piracy accounts for 85 per cent. of the market. An estimated 10 million pirate cassettes will be sold on the local market and 50 million produced for export in 1985. However, I must give credit to Singapore. Although it has the worst record for copyright infringement of any country in the world, the Government have, as a result of pressure from the USA, announced their intention to enact a new copyright law before July next year. The level of piracy in Singapore is already declining, and if the legislation is enacted it should be down to under 10 per cent. by the end of next year. It is important that the pressure exerted upon Singapore by the USA should be maintained by foreign Governments until that happens.

In Taiwan, tape piracy accounts for 55 per cent. of the market. In Korea, it accounts for 10 per cent. of LPs and 90 per cent. of cassettes. In Malaysia, 85 per cent. of all cassette sales are pirated. There is very little piracy of LPs in Malaysia. In Nigeria, piracy accounts for 27.5 per cent. of LP sales and 83 per cent. of cassette sales. In Saudi Arabia there is little piracy of LPs but 95 per cent. of all cassettes sold are pirated. The only legitimate product available tends to be educational material. It is estimated that in Saudi Arabia 50 million pre-recorded pirate cassettes will be sold in 1985. In addition, an estimated 100 million blank tapes will be sold, 40 per cent. of which will be used by shops for in-store pirate taping. In Indonesia, virtually 100 per cent. of recordings of international repertoires sold are pirated. The lost sales to the United Kingdom music industry are estimated to be as follows: Singapore more than £51 million; Taiwan £1.5 million; Korea £1.5 million; Malaysia £9.3 million; Nigeria £8.8 million; and Indonesia £14.8 million.

In Indonesia alone, record pirates are costing British companies some 15 million unit sales a year. It is time that the Government made a strong call for justice. The copyright law in Indonesia covers only local works. No protection is given to foreign works, whether they be books, sound recordings or films. Throughout Indonesia, foreign sound recordings are pirated extensively and about 30 million international recordings, as well as an Arab repertoire, are exported to Saudi Arabia. The matter has been raised with the Indonesian Government, and the International Intellectual Property Alliance, representing all of the major copyright interests in the United States, recently submitted a report to the United States trade representative on piracy including Indonesia. The report is a staggering indictment of the pirates and a staggering record of the extent of the piracy worldwide.

Like any other, the record business deserves a return on its investment. Only one record in 10 becomes successful and the profits from that 10 per cent. are needed to fund development and rising artistes and to pay for less profitable but culturally valuable recordings such as jazz and classical music. It is not generally known, though it is obvious with a little thought, that there is no other industry in Britain in which young people, perhaps with little education or hope of great success, can succeed in a manner which is beyond most people's dreams. No other industry enables groups of young people to succeed financially and to rise to popular acclaim so quickly, knowing that their talents will be used for many years to come. The investment in new groups and new recording artistes is one of the most valuable contributions of the record business. It is the marginal profits which help to create extra investment. If the record industry gets the correct return for its services, more groups and more young people will be given a start to see whether the public approve of their musical tastes.

The pirates put nothing into the industry. They discover no talents and take no risks. They copy only the top 10 per cent. and siphon off the money needed to invest in the future. Without that money, fewer artistes are recorded, fewer classical records appear and our culture is weakened. We have institutionalised piracy in the United Kingdom. How many people can honestly say that they do not record records or programmes from the radio or television? It is regrettable that the Government are no longer considering a royalty on blank cassette tapes. I believe that the public would prefer their taping of records and programmes to be legitimised. If, in exchange for that, a royalty of 10p or 20p per blank tape were paid, I am sure that everyone would understand the benefits which would flow from a better funded record business. I am told that that is not to be, and I have registered my regret.

Records are not alone in being attacked. The copiers attack any successful industry—the book trade, software houses and film producers. Counterfeiting strikes at well-known British trade marks, and often with dangerous results. We have all heard of the fake Ferodo brake linings sold in Africa which take six times as long to stop a vehicle as genuine linings and the useless drugs that are sold under well-known names. Fakers are costing the industry millions of pounds and thousands of jobs. When will it end?

The Live Aid piracy puts not only the Government but all of us under a moral obligation to take a firm stand. British works are not protected in Indonesia, yet the Indonesians get the sixth highest amount of British foreign aid in the world. In 1984 we gave them £28 million in trade loans and aid. Is it not time that we imposed a few more conditions when we are so generous? I am not asking that we take money from the starving, or that we withdraw genuine money aid which will be used for those less fortunate than ourselves, but if we are lending money for industrial purposes and bilateral trade arrangements, the conditions should be much stronger.

The old cautious arguments that we must do nothing to upset existing trade are not good enough. The Americans do not think so. Section 301 of their Trade Act allows them to impose sanctions in countries that do not protect United States copyrights, trade marks and patents. Moreover, they have shown that they are prepared to use it. There is even a danger that countries such as Indonesia will seek bilateral deals with the United States to protect only American products. That will allow the pirates to turn their full attention to copying the goods of more cautious countries that will not act to protect themselves.

We know what can be achieved by a strong line. Secretary of State Shultz, during a recent visit to Singapore, laid down the law. When the public in Singapore discovered that they had not bought genuine Live Aid cassettes and that the money had not gone to the starving in Africa, they were livid. The Singapore Government asked the public to seek out the bootleggers. They were discovered within a few days, and are now serving 10 to 15 years imprisonment for what I regard as theft.

Exactly five years ago there was an Adjournment debate about counterfeiting of United Kingdom trade marks in Taiwan, especially in the textile and motor industries. The then Minister for Trade, my right hon. Friend the Minister for Hertsmere (Mr. Parkinson), made a robust reply. He said:

The hon. Member said that the way forward is for us to ban the import of products from Taiwan. I must tell the Taiwanese authorities that our patience is wearing extremely thin. We are considering the evidence at our disposal. They have the opportunity to avoid a major incident by taking the strong action that Hong Kong has taken. Unless they do, the Taiwanese authorities must be prepared to accept the consequences".— [Official Report, 19 December 1980; Vol. 996, c. 730.] The result was not a trade war, as some timorous souls forecasted, but strong new Taiwanese legislation within months. It can have been no accident that a delegation from the European motor industry shortly afterwards saw that the Taiwanese Trade Minister had a copy of the relevant Hansard on his desk.

In reply to a question from my hon. Friend the Member for York (Mr. Gregory), the Government have said that they will make representations to the Indonesian Government about Live Aid piracy. That is a start, but it is not enough. The Government should make it abundantly clear to the Indonesian Government that piracy of any British work will no longer be tolerated, and that unless reciprocal copyright protection is granted to United Kingdom works they must face the consequences.

In a letter of 30 November to the Confederation of Information Communication Industries, my hon. Friend the Minister said that we must have proof of the illegal act. I have proof, which he can see later today—bootlegged cassettes with Indonesian sales tax stamps and individual numbers on them. That is the extent to which the pirates will go.

The anti-counterfeiting unit of the Department of Trade and Industry was doing valuable work which I should like to continue. I am pleased to announce that the copyright industries—the Publishers Association, the record industry, and video and software producers—are now coming together in a new coalition to present to the Government evidence of the damage caused to British companies, and to spell out the case for protection. At this time of Christmas, I call on the Government to heed their call.

7.44 am
The Minister for Information Technology (Mr. Geoffrey Pattie)

My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) has done the House a service in raising this important matter at a very important time. I make it clear to him and to the House that the increasing problem of copyright pirating and bootlegging in export markets is taken seriously by the Government. Recently, I had the opportunity to make our attitude clear when my hon. Friend the Member for Christchurch (Mr. Adley) brought Lord Macmillan and members of the Publishers Association to discuss problems with the printed word. We had a constructive meeting.

I am grateful to my hon. Friend for defining, for the benefit of the House and of the Official Report, exactly what bootlegging is in this context. It means that I need not do so again.

The House will recall that the problem of video and audio piracy within the United Kingdom has been largely brought under control by the Copyright Act 1956 (Amendment) Act 1982 and the Copyright (Amendment) Act 1983, and we hope that the Copyright (Computer Software) Amendment Act 1985 will do the same for the emerging problem of computer software piracy. But those measures are of little help to British exporters of books, videos, sound recordings and software, who must rely on the copyright laws of the importing country to fight any piracy of their material occurring locally.

Mr. Bryan Gould (Dagenham)

Before the Minister leaves the domestic scene and moves to the main theme of the speech of the hon. Member for Richmond and Barnes (Mr. Hanley), will he comment on the hon. Gentleman's remarks about the pirating of audio recordings at home and on the reports that we have both heard to the effect that the Government are having second thoughts on whether to place a levy on blank tapes? Will he comment on the accuracy of those reports, and perhaps suggest what other thoughts the Government have had on the subject?

Mr. Pattie

I was intending to do so, and will do so gladly.

Such piracy is unquestionably losing our exporters a substantial volume of business in some parts of the world. One main area of concern is the far east, where piracy flourishes not merely for local consumption but for export—as my hon. Friend described—and where local copyright law frequently fails to protect foreign works, The middle east is also a problem area, since it is an important customer for much of the pirates' output.

Reliable estimates are difficult, if not impossible, to obtain, since pirates do not publish statistics. But the United Kingdom sound recording industry estimates that worldwide it could be losing as much as £300 million of export sales through piracy and bootlegging. The United Kingdom publishing industry puts the figure for lost book sales at about £100 million.

It is sometimes argued that unauthorised reproduction' of copyright material by developing countries is justified in the cause of education, or because the price of educational material is unreasonably high and beyond the purchasing power of Third world students. This argument fails to recognise that destroying the market for the legitimate producer itself contributes to raising his costs, but in any case a large proportion of the material pirated throughout the world—the Live Aid bootleg is a case in point—is not for the educational market at all. It is reproduction of straightforward entertainment works of one sort or another—popular music on record or cassette, feature films and popular novels. No country can reasonably defend the pirating or bootlegging of intellectual property of this sort in the name of educational advancement or anything else. It is, on any analysis, a form of theft, and the absence in some countries of legal rights protecting foreign works or performers does not make it any less so.

The Government, in common with our Community partners, take seriously the problem of copyright piracy, as we do the allied problem of counterfeiting, which overlaps it. The first essential is to encourage the adoption of comprehensive and enforceable copyright law in those countries which lack it, and improvement of the law in countries where, as is too often the case, rights are inadequate, enforcement procedures cumbersome and penalties for piracy too low to deter.

We must also encourage these countries to extend their copyright protection to the works of foreign nationals. The Government will continue to support industry's efforts to combat piracy by pressing these objectives on the Governments concerned, as we have in the past where evidence of a problem has been presented to us. I stress the need for evidence because, hard as it may be to obtain—I do not under-estimate the difficulty—one can hardly expect another Government to take seriously a charge that they are permitting or encouraging copyright piracy, if no concrete evidence is produced in support. Here we must inevitably look to the copyright industries to keep us as fully informed as possible about the nature and scale of the problem. I am grateful to my hon. Friend for the proof that he has in his hand. Let the Official Report show that that is the case.

I refer again to the recent meeting that I had with my hon. Friend the Member for Christchurch, following which I am aware that significant details of further evidence of that particular part of the counterfeiting problem were made available to my officials, and that is extremely helpful.

Secondly, the Government will continue to participate in international initiatives to combat piracy and counterfeiting. Piracy is currently a concern of the World Intellectual Property Organisation, which administers the Berne copyright convention, of the Council of Europe, and of the European Community. The Community's Ministers of Culture adopted a resolution in July 1984 on measures to combat audio-visual piracy, and the Commission's forthcoming Green Paper on copyright is also expected to address the issue of copyright piracy.

Counterfeit goods do not necessarily infringe a copyright, but they will often do so. The Government are concerned about the growing trade in counterfeit goods and we are particularly keen to bring current work in GATT on counterfeiting to a speedy and successful conclusion. We want to see a GATT code that would give national customs authorities powers to tackle imports of counterfeits at their borders.

We hope to achieve this objective in the forthcoming GATT round, although this will not be easy. The United Kingdom, through the Community, has been trying for over 10 years to secure the agreement of developing countries to such a GATT code. At the moment, of course, "counterfeit" in this context means goods bearing an unauthorised trade mark, but even on this narrow front we have encountered strong resistance, and many developing countries argue that GATT is not competent to address the subject. Against this background, the Community is shortly to begin detailed consideration of the link between intellectual property and trade policy, in preparation for the new GATT round.

My hon. Friend the Member for Richmond and Barnes has raised a number of specific piracy issues—first and foremost, the alleged production in Indonesia of bootleg cassettes of the Live Aid concert. I say "alleged" almost from the legal point of view. I am persuaded by what my hon. Friend has told the House. I am aware of the allegations, and I am looking forward to receiving the cassettes from my hon. Friend.

Clearly, these cassettes, whatever their place of origin, must be bootleg, since, as my hon. Friend has said, no official recording of the Live Aid concert has yet been issued. The cassettes carry a legend calculated to mislead the purchaser into believing that the proceeds will go towards African famine relief, even though this is not explicitly stated. I have to share my hon. Friend's contempt for this despicable series of actions. I share his encouragement that the Indonesian Minister, Dr. Mochtar, has recently called for action to be taken against the bootleggers. My hon. Friend and the House may be interested to know that my hon. Friend's debate is particularly timely, because officials are discussing this issue and making representations on the matter to the Indonesian high commission in London today.

My hon. Friend asked what, if any, conditions should be imposed upon our relationship with Indonesia, which is across many fronts. I have considerable sympathy for the position that he has expressed. I have never believed that the Government's position on any issue is weakened by a firm statement of belief by the United Kingdom Government, or by saying that we find the present situation unsatisfactory and that we shall not tolerate its indefinite continuation.

We have noted the effect of the United States action, particularly in places such as Singapore. Although the United States can bring considerably more clout to the international market place than we can, we must not under-estimate our position in the world market or our position over intellectual property rights. My hon. Friend knows that trade policy is not a matter for me but for my right hon. Friend the Secretary of State for Trade and Industry. However, we consult one another closely about these matters. I should not like my hon. Friend automatically to assume that we wish to adopt the feather duster approach. We do not.

My hon. Friend referred to the fact that there are alleged centres of piracy elsewhere in the Far East. We are encouraged by recent moves to improve the protection for foreign copyright owners in two places in particular which have given cause for concern—Singapore and Taiwan. Singapore has recently completed a new draft copyright law, with a view to its adoption during the next year or so. We should like to be told more precisely when that is likely to be. The United Kingdom hopes soon to be in a position to furnish comments on this draft law to the Singapore authorities.

In July of this year, Taiwan also introduced a new copyright law, which provides for the protection of foreign works on a reciprocal basis. The United Kingdom has already taken the necessary steps to meet this criterion of the new law. My hon. Friend may like to be reminded that the United Kingdom has made an Order in Council that applies the protection of the Copyright Act 1956 to such works in Taiwan, with effect from yesterday. My hon. Friend's debate is therefore timely on both those counts. Who knows?—Taiwan's position could be linked to the earlier debate to which my hon. Friend referred.

Both my hon. Friend and the hon. Member for Dagenham (Mr. Gould) referred to a blank tape levy. A White Paper on intellectual property and innovation is expected to be published early in the new year. No matter what the newspapers may say, no final decision has been taken on this issue. It would not be the first time that the newspapers, while speculating—and having every right to speculate—have not necessarily been accurate. The House will not expect me to speculate about the contents of that White Paper. I think that when my hon. Friend looks at some of his arguments on this subject he will agree with me that they were a little unfair. The Government's Green Paper that was published at the beginning of this year considered audio tapes and video tapes. With video tapes there is a significant element of time shifting, as it is known. My hon. Friend is, I know, aware that many people record off television for viewing on another occasion, either later in the evening or at the weekend.

As for audio taping, it is agreed that there is copyright infringement. However, many people put records that they have bought on to audio tapes because they wish to use them either in their motor cars or elsewhere in the house. That does not invalidate the case, but the copyright fee is often paid in the original purchase price.

The issue is difficult and complicated, and final decisions have not yet been taken. However, the issue will be discussed in the White Paper to be published in the new year.

I thank my hon. Friend very much indeed. I know that it is something of a cliché for Ministers to say that during the night through clenched teeth, but whatever the time—this time is not particularly inclement—I should have been happy to respond to comments on this extremely important subject.