§ 1.46 p.m.
§ Lord Willis
My Lords, it is just over a year ago since I last addressed your Lordships on the subject of copyright. On that occasion, I said, if your Lordships will allow me to quote:What is needed is the political will to bring the copyright laws into line with the present conditions. The present law has been out-distanced and out-dated by modern technology. It needs to be changed as a matter of urgency … It is in the interests of all that our arts, and the industries which support them, should flourish … they earn millions of pounds for the economy and do a great deal for the prestige of Britain abroad. But they would not have been able to do any of this without the copyright protection which at present exists—and they will not be able to do so in the future unless that protection is brought up to date".—[Official Report, 31/3/82; col. 1439.]In that year, my Lords, all the evidence goes to show that the situation has become worse—far worse—and that the introduction of still newer technology and the great increase in piracy has made the need for action even more urgent. The present Bill before your Lordships is a modest measure designed to plug one or two of the more obvious holes. It is essentially a minor first-aid job, which will, so to speak, help to staunch the flow of blood until more substantial remedies are available.
The background to the Bill is the growing practice of private copying of records and films, what is known as home taping, and the question, yet again, of piracy. When I spoke a year ago, I regret to say that Hansard, usually the most reliable of chroniclers, got one word of my speech wrong. I do not blame them for that because it was a difficult word, but it was also a vital word. Hansard reported me as saying:You can now record, if one can make a new phrase, music from records or films and programmes from television in the privacy of your own home.—[col. 1437]310 What I actually said was that you could do all these things in the "piracy" of your own home. A subtle but vital difference.
What was true then is doubly true today. The latest estimate from the music industry is that it is losing something like £300 million a year as a result of illegal copying. It cannot be too strongly stressed that when I speak of the music or the record industry I am speaking of a host of people who depend, directly or indirectly, on music, records and films for their livelihoods—writers, composers, musicians, shopkeepers, printers, engineers and so forth. It is these people who are being robbed. For that is exactly what it is, my Lords; it is robbery.
I must admit that I have my doubts about the use of the words "piracy" and "pirates". It has connotations of romance and glamour enshrined in Holywood films starring bold buccaneers like Erroll Flynn. Believe me, my Lords, the present pirates are nothing like that. I believe that we should call a spade a spade, and a thief a thief. But I very much regret that I think we are stuck with the word "pirates", and, if we are, then, my Lords, I tell you that Britain today is a great market for the thieves and pirates. Britain has today become Treasure Island for those who steal the copyright of other people.
One new feature of the situation that is causing alarm to the record industry is the development of retail outlets which are devoted to the rental of gramophone records and cassette tapes. The retail cost of a record or a pre-recorded cassette can be between £4 and £5. The rental shops offer these out for a nightly hire charge of about 40p or 50p. There can be no doubt that the vast majority of people, quite innocently, hire these records and cassettes for 40p or 50p to record them in their own homes. They may record two or three copies for their friends. From their point of view it is good value for money. A blank tape costs £1 or less, and the hire charge added to that means that for about £1.50, about one-third of the retail price, the borrower can have the latest recording. It does not concern him or the rental shop that in doing this he is actually cheating, that he is as guilty of the theft of other people's property as if he were a shoplifter or a pickpocket.
Let us think of it in this way, there are some 20 to 25 million sound cassette recorders in private hands in Britain. If, at a conservative estimate, only 50 per cent. of these are used illegally to record borrowed records, and if at an even more conservative estimate, this 50 per cent. copy only one record each year, that means a potential loss to the record industry of about 20 million sales a year. It might be argued that not all these people would go out to buy the record. I think it is very conservative to say that they would record only one a year, but, even so, if we were to slash the figure by half or three-quarters the loss is still absolutely staggering. I defy your Lordships to think of any other industry in this country which is subject to such undeserved losses. No other industry is being plundered and pillaged on a regular, recurring basis. I must stress again that when I am talking of "the industry" I mean writers, composers, musicians, artistes and everyone.
I am not suggesting that we should appoint an army of investigators who would have the power to enter 311 people's homes and check on what they get up to with their recorders. Heaven forbid! It is my belief that the only long-term answer to illegal home-taping is to recognise that it exists and that it cannot be policed, and to impose a royalty on all blank tapes and recording machines. That would be a simple and effective method of licensing, and I hope that the Government will look at this possibility. But that is for the future; it has nothing to do with the present Bill. What we can do in the meantime is to make it just a little more difficult for the home-taper, particularly for those who use record rental shops for the purpose of copying.
As yet, rental shops have not developed in Britain to the same extent as in other countries. But there are ominous signs. The record industry is alarmed about them. The threat is there, and it is my hope that in this instance the Government will act before the horse has bolted.
Let me give your Lordships one example—the experience of Japan. It will give your Lordships some idea of the immensity of the threat. In June 1980 the first rental store for records and pre-recorded cassettes opened in Japan. It was such a runaway success that in the space of nine months the number of rental shops in Japan had risen to 800. That was in nine months. One of the enterprising newspapers in Japan took a poll of the people using rental shops, and 98 per cent. of the people who hired records and the pre-recorded cassettes admitted that they did so to copy them at home. All this had a disastrous effect on the legitimate business in Japan. The sale of official records and prerecorded cassettes dropped, on average, 30 per cent., and in some cases in Tokyo it dropped 60 per cent. Imagine the outcry if any of our high street shops were subject to such losses as a result of illegal trading.
The threat is there, and the first purpose of the Bill which I now present to your Lordships is to widen the scope of the law so that it covers record rental operations. It is necessary because the present law, the Copyright Act 1956, was framed before these new problems arose. The present Act gives the record industry little or no protection from unauthorised rental of its products. I do not want to burden the House with the legal technicalities. Suffice it to say that the industry brought a test case against an unauthorised record business in 1981, and it was found that the Act of 1956 could not give it the protection it needed. The present Bill, although it would not automatically condemn a record rental business, would give the record industry a fairer crack of the whip and enhance its ability to defend its products against theft.
For example, in Clause 1, the new subsection (2A) would impose on the courts the obligation to apply an objective test to the circumstances of a rental business so that it could decide whether as a question of fact those circumstances were likely to lead to copyright infringement. If the answer is "Yes", then the proprietor is deemed to have authorised a copyright infringement and may be dealt with on that basis. This subsection removes once and for all the need to argue abstruse points of law on the subject of authorisation—a problem that has dogged the record industry in its attempts to bring offenders to book. It makes the law more even-handed. It does not in any way attack the legitimate record business.
312 The new subsection (2B) in Clause 1 is designed to get round an obvious ploy by the proprietors of rental businesses. For example, in the test case I have already mentioned the proprietor in fact displayed a notice in his shop pointing out that home-copying was an infringement of copyright. It seemed from the results that this notice had about as much effect on the public as the health warnings on cigarette packets. The home-copying went on. Nevertheless, this little ploy seemed to find some favour with the judge in the test case.
The insertion of the new subsection (2B) would simply mean that the display of such a notice, cynically meant, could not be a defence in itself. It would be only one of the factors that the court would have to take into account. It could not ignore it, but it would not necessarily be justification for copyright infringement.
I now come to the new subsection (2A)(b) in Clause 1, which deals with a different but equally serious aspect of the problem. This provision is aimed at those people who copy tapes and records for the purpose of re-selling them to the public—a form of dubious enterprise which is widespread and growing. I have here, for example, a cassette that one could buy in a market, street or sometimes in a pub for about £2—half the normal retail price of the genuine article. It is a piratical copy. It is a theft, a robbery; but thousands of these tapes have been sold. The fact is that they are not as good as the original because the pirates do not take that amount of care, but to the uneducated eye it looks a reasonable tape which is cheap. It may feature a favourite group, and the person thinks: "Fine; I will buy that because it is cheap". Hundreds, but hundreds of thousands, of these tapes are being sold this weekend in the marketplaces, in streets and in pubs. Each lost sale costs the record industry between £3 and £4—and, again we are talking about composers, musicians, salesmen, shopkeepers and so on. All these people are being robbed.
The record industry has been fighting these thieves for years with some success, but they are handicapped by the weakness of the law on copyright. Its fight is not helped when manufacturers bring on to the market machines which can only help the thieves and counterfeiters. For example, a Japanese company called AIWA intoduced a new machine last year and they issued with it a press statement. The press statement says and I quote:Tapes can now be copied at four times the speed of conventional tape decks"—I am talking about sound tapes—with the introduction of AIWA's latest model … this means that the entire contents of a 60-minute cassette can now be copied in an incredible 15 minutes".My Lords. I have quoted only two sentences in that paragraph and in each one there is a reference to copying. Copying what, for Heaven's sake? What they are talking about is copying records and pre-recorded tape cassettes which have been made at some cost by the recognised music industry.
This machine costs less than £200 and it is being offered for sale to the public. Your Lordships will know as well as I that the general public have no use for such a machine. Who wants a machine that can record a cassette in their home in 15 minutes? Who is going to pay £200 for that? It has a limited use, 313 perhaps, in education and in commerce; but, basically, the only people who are going to buy that machine are the pirates, the counterfeiters. And it may well be that because of its low price, it will attract yet more thieves into the business of robbing the record industry.
The machine can copy four cassettes an hour. Used for only 12 hours a day, it could produce 400 tapes—forged tapes—in a week. Those counterfeit tapes will yield a profit of some £300 to £400 to the counterfeiter. It means that the small man can now enter the pirate industry as well as the mafia, the heavy-money boys who really are in the pirate video tape and cassette recording business in a very big way. There is heavy money in this. In one week therefore with one of these machines that you buy for £200, you produce 400 tapes and sell them on street corners or in pubs, you make a profit of£300, you pay for your tape-copying machine and you are already in pocket. That is a measure of the seriousness of the problem. So far, this machine is confined to sound copying; but there can be little doubt that, before very long, a machine capable of doing the same thing for films and video will appear. If this happens, there will be a new explosion of piracy and, as I said earlier, the expression "Treasure Island" will have a new meaning to this country.
Section 2A(b) is designed to discourage manufacturers and distributors from offering machines with this capacity for sale to the public. I do not want to put a limit to new technology. I am not a Luddite. But where a machine appears to have no other function than to copy other people's products, some halt must be called. I am not seeking even to ban those machines. I am not seeking in the Bill to penalise the owner of an ordinary cassette recorder, no matter how sophisticated. This section simply puts the courts in a position to look objectively at any particular machine and to decide whether, by its nature, it is likely to be used to infringe copyright. The manufacturers and distributors will not be unfairly penalised. They will have full opportunity to defend their products in the courts.
That in essence is the scope and purpose of this Bill. It is brief but, like everything else connected with copyright, it is a little complicated. I have done my best to explain the background of the Bill but, of necessity, there are points and arguments which I have been unable to deal with for reasons of time. I am delighted that Sir John Eden's Bill (which deals with some other aspects of the problem) has made progress in another place and will be here soon. I am even more delighted that it has received Government blessing. May I hope, because the industry is bleeding savagely from these wounds, that your Lordships and the Government will give my small Bill a similar fair wind. I beg to move.
§ Moved, That the Bill be now read a second time.—(Lord Willis.)
§ 2.5 p.m.
§ Lord Beaumont of Whitley
My Lords, the House is indebted to the noble Lord, Lord Willis, for the way he brings this matter to our attention. We are all the richer for having noble Lords like him who specialise in particular matters and bring amending legislation before your Lordships' House at varying intervals. In 314 this particular case, there is no doubt whatsoever that the problem that he has brought before us is a very real one, that it causes distress, it causes financial loss and that it is something which, as a whole, the legislature should look at and should make up its mind on how it is going to cope with the whole problem of piracy.
Having said that, I must now say that in my view and that of my colleagues on these Benches, this Bill just will not do and does not begin to be acceptable. There is a balance always between the protection of artistes and the good of the community; and the protection of artistes should be very high on our list of priorities. But it seems to us that this Bill would start with laying burdens on the courts with which they would be totally unable to cope and which, even if they did cope with them, would lead to injustices.
Moreover, it seems to go further than that. I was about to use the word "Luddites" which the noble Lord, Lord Willis, himself disowned; but I hesitate to do so because I am not totally against Luddism on the right occasions. I suspect that the approach to modern technology and, in this case, the approach to the machines in this kind of way, are rather like the courtiers who would have King Canute attempt to stem the tide. King Canute, of course, was far too wily an old bird to fall for that one. He knew perfectly well that he could not. The noble Lord, Lord Willis, said that these machines now being used for sound tapes are merely the precursors of those to be used for video tapes. I have no doubt that that is so. I think we could probably say that the machines which now record accurately and well at four times the speed of the original tapes will probably be overtaken in time by ones which can do so at 10 times the speed—or even better.
It does not seem to me that the way to deal with this is effectively to ban the sale of these machines or to ban the businesses which deal with them. The noble Lord, Lord Willis, said it was not his intention to ban the machines; but I really cannot see how else the Bill would work. The courts would have the difficult job of deciding whether the businesses which were up before them were bona fide rental businesses or supplied bona fide machines for bona fide use in other cases. It is very difficult to see on what evidence they could come to conclusions. Of course, some cases would be clear and others would be very unclear. I would have thought there was, frankly, the possibility of self-respecting judges and self-respecting courts going on strike. The difficulties for the law would be too great.
It is for these basic reasons that we from these Benches cannot support this Bill. However, there are methods of dealing with the problem and my Party has adopted a policy which goes along with the taxation of blank tapes and also with recorded tapes—because a point that has been made by one of the bodies which have approached Members of your Lordships' House on this matter is that if the blank tape is taxed the recorded tape should also be taxed since a recording could be taken off and the tape re-used. A basic tax seems to be the right approach to this.
This afternoon is not the time to argue the rights and wrongs of that, except to say that as a basic principle it is probably right, as often as one can, to bridge the gap that exists in many cases between, on the one hand, complete licence and, on the other hand, 315 complete banning, which is what I believe this Bill would lead to, by some form of progressive taxation. That is the approach that we take, for instance, in the matter of cigarettes, which was mentioned by the noble Lord, Lord Willis. I think it is the way to approach a number of other subjects. I merely mention the alternatives because it is right that those who object to this Bill should say how they would deal with the evil. There are methods of dealing with it, I think; but this Bill is unacceptable.
I hope that there is not going to be a vote on it. I think that the growing habit of voting against Second Readings of Private Bills is a great pity. It may be that this Bill is capable of amendment, although at the moment I think there is some doubt. But I am afraid we cannot accept this Bill as it is and certainly we would not be in favour of its further progress through your Lordships' House in its present state. However, we admire and are grateful for the thought and the motives behind it which have prompted the noble Lord, Lord Willis, to bring it before your Lordships.
§ 2.13 p.m.
§ Lord Jenkins of Putney
My Lords, I join with the noble Lord, Lord Beaumont of Whitley, in his congratulations to my noble friend for introducing this Bill. I rather suspect that my congratulations are somewhat more wholehearted than his were because, having congratulated my friend on introducing the Bill, he then went on to say that he could not support it.
It is sometimes worthwhile to introduce a Bill for the sake of discussion, but I very much hope that my noble friend has done no such thing here this afternoon because, although I go along to a certain extent with the noble Lord, Lord Beaumont, in thinking that the Bill at present is far from perfect—I think that my noble friend may agree with me on that point and I have myself reservations over some parts of it—nevertheless it does attempt seriously to tackle for the first time a problem, attention to which is long overdue.
My interest in this matter stems from the fact that for many years I worked full-time for Equity, the actors' trade union, and I still have a great interest in the welfare of performers. This is one case which ought to commend itself to both sides of the House, and I say that for this reason. In this matter there is no division whatsoever between the employers and the employees. The trade unions concerned fully recognise that, in the present situation, they may be inhibited from getting a square deal from the makers of the records.
Let me try to translate this situation and consider it in relation to the motor-car industry. If a manufacturer of motor-cars made a few of them and then somebody copied them without charge and sold more than the original manufacturer, how then could a trade union negotiate a reasonable remuneration with the manufacturer of the original motor-cars if it was not retaining the profits on all the cars which were made? This is the position that has arisen. The original manufacturer of the article is not only losing his own profit but is unable to give a proper remuneration to the people who make the records. There is not the slightest difference here.
316 What is happening, without putting too fine a point on it, is that the community is exploiting the producer. This must be stopped, because it is possible—although the National Consumer Council does not appear to think so—for the consumer to be against the community as a whole. It is in the interests of the community that the person who makes an object shall receive a fair reward. If that proposition is accepted, and if the consumer is getting round that by getting a product without paying for it, then it is the consumer who is at fault. It is the duty of Government not only to protect the interests of the consumer, but, from time to time, to protect the interests of the producer, both employer or employee. As I said, the interests of the employer and the employee go together.
This is not a case where, in their nightmares, noble Lords sometimes see employer and employee getting together to exploit the rest of the community. On the contrary, as I have said, this is a case of the community exploiting the producer. We are surely all agreed that we need to protect the producer and to give him a reasonable reward for his endeavours, whether that reward comes in terms of profits or in terms of salary, wages or other remuneration.
I said that I am not entirely happy with the Bill as it stands, but I am entirely happy with Clause 1(2A)(a). It seems to me that this goes to the heart of the matter, because it states that an offence occurs at the point at which the product is sold. That is quite easy to define. What this means—and this needs to be done—is that, if I make a film or a record for my own use, that is no longer a technical offence as it is at the moment. It becomes possible to do that without breaking the law. Under this Bill an offence will occur when I take that record to a market place and try to sell it—or not merely one, but dozens or hundreds. That is definable and is no problem in law.
With paragraph (b) we run into problems. It will not be so easy for a court of law to define an offence there. So I hope that my noble friend will say that, in return for getting a Second Reading this afternoon, he will be very ready to accept improvements at the Committee stage; or the Bill might conceivably go to a Select Committee, as the previous one did. But certainly the Bill ought not to be withdrawn. We ought to be making some progress on this matter, and one way of doing that would be to give this Bill a Second Reading, in the hope that some improvements can be made to it so that the main purposes of the Bill, which are long overdue, would come into effect.
Your Lordships will have received an advocacy of the Bill from the British phonographic industry. That advocacy seems to me to be convincing, with the qualification that I have made. We have also received objections to the Bill from the tape manufacturers group. They object to subsection (2A)(b) rather than to subsection (2A)(a). I understand their objection to that paragraph. I believe there is much to be said for placing a levy on the machine itself and for that levy going back to the manufacturer. Even if the product is made only for home use it is an additional use of the product, and the manufacturer is entitled to some remuneration for it. The levy on the machine would be collected and would go to the manufacturer. I hope that it would go not only to the manufacturer of the film or record but also eventually—by way of royalty 317 or something of that kind—to the performer on the record: the singer, or the musician, or the writer. My noble friend will not mind, I am sure, if I include writers. Have we no consideration for the creative and the interpretive artist? They are the people who make such recordings possible; without them, nothing would happen and they must be protected.
I believe I have said enough to indicate that the observations of the National Consumer Council are not in this case correct. I agree with some of their remarks, but a great deal of what they say is irrelevant to this small Bill. It may, however, have some relevance to further changes which the Government intend to introduce.
I hope I have said enough to make it clear that I trust the House will give a Second Reading to my noble friend's Bill and that it will proceed. Like so many other things, it may conceivably fall because of electoral events which overtake us. But many other things, including those which might be even more important than this, will fall if there should be a general election. However, that would be no excuse at all for not giving the Bill a Second Reading this afternoon.
§ 2.23 p.m.
§ Lord Mishcon
My Lords, in the battle against thieves, robbers, pirates and the mafia—phrases which have been rightly used by my noble friend—this House will be united. I cannot imagine any noble Lord deciding to take the part of anyone who deserved that description. There is no doubt that not only is there a threat but that thieving, robbing, pirating and mafia activities are going on in an industry which is vital to this country, and which your Lordships would wish to encourage: that of the creation and practice of art, whatever form it might take. Therefore I join those noble Lords who have already spoken in expressing gratitude to my noble friend Lord Willis for bringing this very important matter to your Lordships' attention.
Having said that, I wonder whether your Lordships would permit me to say that it is a great pity that in our legislature we cannot keep up with the times. The fact of the matter is that by virtue of all the technological changes which have taken place, especially in the industry which we are discussing this afternoon, the Copyright Act 1956 is grossly out of date. As a result, many quite innocent people in this country in the privacy of their homes, without any ulterior or commercial motive, are likely to be infringing at this very moment the copyright law. I shall give a brief example. The mere copying, on an ordinary, a slow-moving machine of a record at home, without any desire to sell it at all, constitutes a breach of copyright. This means that with the technological advances we have had, it is vital that the whole law of copyright be given a very definite examination, in order to bring it up to date.
My noble friend Lord Willis has said that this is a very urgent matter. There is no doubt that he is right. Therefore I cannot, on behalf of my noble friends, be content to say that we should look at the whole question of the law on copyright and wait for that consideration before we do anything about it. I 318 immediately concur with those who say that this Bill should undoubtedly be given a Second Reading.
Having said that—and I promise to be very brief—may I tell the noble Lord, Lord Beaumont of Whitley, that there are certain categories of people in this country who do not go on strike, and that judges are one of them. The noble Lord can therefore rest assured that whatever legal problem we may set them, the one reaction we shall have may be a criticism of Parliament but will certainly not be a walkout or a work-to-rule.
There is no doubt at all that there are legal problems connected with the matter we are now considering. They are undoubtedly problems which can be considered at later stages of this Bill, and I am sure that my noble friend, with his usual reasonableness, will give consideration to any point that is raised on the various clauses of this short Bill.
Perhaps your Lordships will bear with me if I spend a few moments telling the House of the case to which my noble friend briefly referred and which has given rise to the difficulties and problems which caused this Bill to come before us. It is not a very complicated case. It was the case of CBS Inc. and Another v. Ames Records and Tapes Limited, which was reported in the 1981 All England Law Reports at page 812. The noble Lord the Minister, with his usual attention to detail, waves before us a copy of that actual law report; but I trust that when he comes to address us after half past two this afternoon, it will not be his intention to read that report in extenso.
This case concerned a man who owned a record shop in the North of England. He started a rental scheme for records and also sold blank tapes. As my noble friend intimated, a rental charge is usually a very small amount, and people were encouraged—or so it was thought—to acquire both sets of this trader's wares—to rent the records and buy the blank tapes. The result, obviously, was a nice recording on tape at home, achieved as a result of the rental transaction.
Mr. Ames also had—and I use my words discreetly—a notice which brought to the attention of those who did business with him the fact that it constituted a beach of copyright if one copied material at home. That case was brought to court. The court was in some difficulty because there was no direct connection between the transactions I have just described and the actual infringement of the copyright, in the sense that the gentleman who rented out these records and sold blank tapes did not directly know—because he was not a visitor to the homes in question—that this was being done. Therefore, although it was very likely that the result of this transaction was the piracy to which my noble friend has referred, nevertheless he could not be proved to have knowledge of the breach of copyright. So my friend's Bill aims to put this right.
Your Lordships will see the relevance of the facts of this case to one clause, for example, in this Bill, and that is subsection (2B) of Clause 1:Use of a disclaimer notice shall not of itself prevent conduct from falling within subsection (2A) of this section.That is a very interesting section to read in view of the facts of this case.
319 Your Lordships, and I hope my noble friend, will think very deeply before we, in saving one industry or trying to protect it, harm another industry. There is no doubt about it, there is a perfectly innocent industry which we would want to encourage: that of making and selling recording machines. If one looks at what happens under the provisions of this Bill to somebody who dares to sell this type of machine in a retail shop, one would come to the conclusion that he would be a reckless man even to start stocking it, because if you look at subsection (2C) it says:Conduct may fall within subsections (2A)(b) of this section notwithstanding that the person supplying the machine had no knowledge of the use to which the machine was to be put and no control, whether direct or otherwise, over the first or subsequent purchasers of the machine.Again, from the facts I ventured to outline to your Lordships one can see why this clause was put in; it was because of the previous judgment in the 1981 case. But, if I may say so, I think my noble friend will find that lawyers will tremble somewhat at the absolute nature of these clauses, to which my noble friend Lord Jenkins of Putney also referred. These matters can be dealt with without any doubt in Committee and at Report stage, and I have no doubt my noble friend will be able to agree to some of the amendments that lawyers may put forward without in any way spoiling the principle of the Bill.
My Lords, it is in those circumstances that I hope that this Bill will certainly have a Second Reading in your Lordships' House.
§ 2.34 p.m.
§ Lord Lyell
My Lords, we have listened with fascination to the points that have been raised this afternoon, and I am sure your Lordships will join with me in thanking the noble Lord, Lord Willis, for introducing his Bill in such cogent terms, so briefly and in very amusing terms; indeed, it gave us the opportunity to listen to the wit of the noble Lord, Lord Mishcon, about whom I shall have a little to say later in the course of my remarks. I promise I shall be brief. I hope I shall be forgiven if I address myself first to the Bill.
The House will agree that the Copyright (Amendment) (No. 2) Bill raises some very interesting and important questions, but at the same time your Lordships will not be surprised to know that the Government have some serious reservations about the provisions contained in it. The Bill is essentially concerned with the issue of unauthorised home-taping, of both sound recordings and films, and this includes video films. This is one of the most important and difficult areas of copyright that the Government are currently examining as part of our general review which follows the publication in 1981 of a Green Paper. We hope that before too long we shall be able to bring forward a comprehensive set of proposals for the reform and modernisation of all aspects of copyright law.
§ Lord Lyell
My Lords, the noble Lord gives sound approbation and encouragement, but I assure you and 320 the noble Lord, Lord Mishcon, that this is a particularly complicated subject. Indeed, the subject we have been discussing this afternoon is equally difficult.
Your Lordships will have noted that the Bill has two distinct limbs. The first is in Clause 1 under the proposed new Section 1(2A)(a) of the Copyright Act 1956. This concerns rental and similar transactions involving copyright records and films. Under this provision anyone who, without the consent of the copyright owner, engaged for profit in the business of rental, lease, exchange or the like of copyright sound recordings or films—here we come to some difficult points—in circumstances likely to lead to their unauthorised copying would be deemed to have authorised an infringement of copyright, and hence to have himself committed an infringement.
I am sure that all of your Lordships will agree that one of the most striking features of the sudden and surprising growth of the video market in this country has been the predominance of rental. This was raised very forcibly by the noble Lord, Lord Willis. It has been estimated (although I cannot vouch for the precise figures) that about 1¼ million video cassettes are rented each week in the United Kingdom. This rental is such a recent phenomenon that it has not yet been possible to assess its full implication for those whose interests are at stake. We have heard that there are many more interests than just the mere simple transaction between the renter and the first customer.
In particular, at the time when the copyright Green Paper was published in 1981 video rental had not been raised as an issue and consequently it did not receive any mention in that document. The publicity that this Bill will receive may be the first intimation to many of us, or to the public at large, that video rental has any implications for anyone other than those directly involved in a particular rental transaction—the video shopkeeper and his customer. For this reason the Government are grateful to the noble Lord, Lord Willis, for bringing this issue to the attention of your Lordships and to the wider public at this stage. However, having said that I must go on to express the reservations that we have about the rental side of the Bill. Indeed, these are serious reservations.
There are three main reservations. The first is the Bill's provisions that the copyright owner would only be given a right in relation to rental,In circumstances likely to lead to the unauthorised making of any record embodying the recording or any copy of the film".That appears to be reasonable but it also seems to be a recipe for confusion and misunderstanding. It would put an impossible burden on the rental operator if he had to decide in each case whether the circumstances were such that illegal copying was likely to result. The second reservation is about the phrase,rental, lease, exchange or the like".This would be a fertile source of uncertainty. In particular, we are not clear what sort of behaviour would be caught by the words "or the like".
The third main criticism of the Bill's rental provisions is on the question of timing. I did touch on this. The Government welcome the opportunity that the Bill presents for an examination of the issues involved in video, and indeed record, rental. We recognise that this is an idea that merits the closest 321 scrutiny, especially in view of the way that video rental has developed. But, at the same time, we consider that it would be premature to prejudge these issues by introducing legislation in this way and just now. The real need for a rental right has not yet been demonstrated—not for video and still less for records, since there seems to be very little commercial record rental activity in this country. The noble Lord, Lord Willis, mentioned Japan, but we stand by what we believe to be the case in this country. It has yet to be established, for example, that videogram producers cannot adequately protect their interests in relation to rental or exchange by contractual means.
Instead, I hope that bodies representing all groups affected—film and record producers and distributors, retail, rental and exchange operators, as well as their customers—will take this opportunity of the matter being raised this afternoon to let the Department of Trade know their views on the subject. We would hope that they will get in touch with the Industrial Property and Copyright Department. I give the full commercial address, which is 25 Southampton Buildings, London, WC2A 1 AY. In case your Lordships did not gather that, I am sure that it will be in the Official Report. That may also help members of the public who might be interested. We assure your Lordships that the department will then be able to give the fullest and most balanced consideration to all the issues that are raised in the Bill, and will be able to decide whether to bring forward proposals for a rental or exchange right, at the same time as the general reform of copyright is announced.
I turn now to the second main limb of the Bill, which is dealt with in Clause 1 under the proposed new Section 1(2A)(b) of the Copyright Act 1956. That is on the first page of the Bill, in line 18. Anyone who for the purposes of trade sold, distributed or otherwise made available any machine capable of reproducing a record or film, where the nature of the machine was such that the primary or a substantial use of it was likely to result in unauthorised copying of a copyright record or film, would, under this provision, he deemed to have authorised infringement of that copyright and so to have infringed it himself.
Proposed new Section 1(2C) (over the page in the Bill at line 6 on page 2) states that this would be so even though the person supplying the machine had no knowledge of the use to which it was to be put and, above all, no control whatsoever over the first or subsequent purchasers of it. Just here I would mention that under the proposed new Section 1(2B) at the top of the page, the tape rental or equipment retail operator would not be saved from proceedings for his, so to speak, "contributory infringement" by the display of a disclaimer notice, as we popularly call it, warning his customers against unauthorised copying.
This provision is full of problems both of interpretation and of principle. The equipment it covers is by no means clear. With the increase in technological advance and these new wonder implements that were mentioned—I hardly dare say advertised—by the noble Lord, Lord Willis, it becomes even less clear. The provision apparently covers not only the recently emerged high speed, tape-to-tape audio recorders, but also all domestic music centres, as they are popularly known, and combined 322 radio/cassette recorders. Indeed, it may even extend to simple tape recorders, both audio and video.
Whether an item is covered depends, as always in legal matters, on the circumstances. I have mentioned a number of items of equipment, and I hasten to add that we are not in the Tottenham Court Road, or in an audio and video equipment bazaar. All these items which have been brought to my notice, even the high speed recorders, have legitimate uses which simply do not involve the infringement of copyright. Many such items are purchased by people who have no intention of ever using them for infringing purposes. That is undoubtedly true of very many music centres and combined cassette/radios. It would be quite wrong to put every distributor and retailer of all such equipment at risk of finding himself to be an infringer of copyright.
However, the Bill would make such a person an infringer of a particular copyright only in circumstances in which the owner of copyright in a particular record or film could show that the sale or otherwise of the equipment was likely to result in unauthorised copying of that particular record or film. This provision would be very difficult for a copyright owner to apply, and it is very hard to conceive of circumstances that would with any certainty enable him to seek redress.
We must ask ourselves whether the sale of equipment alone would in practice ever entitle him to relief. It is difficult to see how it could, given that a particular copyright must be threatened, and yet new subsection (2C) states that the equipment vendor may not be saved by his own ignorance of the use to which the machine is to be put. If not irreconcilable, these two concepts taken together could be difficult to apply—and that is putting it fairly mildly. We should also consider whether the supplier is to be required to make inquiries about the proposed use of the equipment by his customer, or, for that matter, by anyone else.
Perhaps the circumstances to which this part of the Bill may apply are very unlikely to arise. Let us suppose that a video shop that rents out videograms to its customers at the same time both sells blank video tapes and makes available in the shop video recording machines on which customers are encouraged to make copies of their newly-rented tapes. Perhaps the proprietor makes a charge for the use of the machine in this way. Such behaviour on the part of the proprietor would, I suppose, be within the Bill, and would, furthermore, be objectionable, since clearly he would be encouraging the infringement of copyright. However, one might expect the court to regard such provocative behaviour as amounting to the authorisation of infringement, and it would be caught even under present law. So the Bill seems to fill no existing loophole even on this extremely narrow interpretation.
I wish briefly to turn to the very interesting comments that have been made by your Lordships in the course of the debate on the Bill this afternoon. During his very amusing remarks, the noble Lord, Lord Willis, raised the question of pirates, and this was alluded to even more succinctly by the noble Lord, Lord Mishcon. The noble Lord raised the matter in a very romantic way, but we accept that there is here a very serious problem, and that is why we hope that he 323 and anyone who has a commercial or other interest in the matter will get in touch with us at the department.
I was very interested in the noble Lords's "commercial" (if I may so describe it) for the high-speed recorder. He probably got the name right. I am not a great speaker of Japanese, though there are Members of your Lordships' House who have great facility in that language, and no doubt they could help the noble Lord. He also pointed out the advance of technology; and these new high-speed tape recorders will probably be obsolete by next year.
There was much mention of art from technology. I wonder how far technology can be extended to taping and to what degree it can be taken into the privacy of our own homes. The noble Lord, Lord Mishcon, mentioned that there would be many of us who might be taping at normal speed—not at four times normal speed—from a record onto a tape. I have to say to the noble Lord, Lord Mishcon, that he, and no doubt other Members of your Lordships' House, have technological knowledge which is certainly not possessed by some of us and certainly not by me, for a start. I wonder whether the noble Lord, Lord Willis, would consider that buying blank tapes and a video recording machine covers home taping of even his beloved football team. When it comes to art and artists, would it cover the said Mr. Hoddle who distinguishes himself in the noble Lord's beloved team? Is that covered under a copyright? Or is it an infringement? I promise that the comments made by the noble Lord and the points raised during discussion on the Bill will be taken into account.
The noble Lord, Lord Beaumont, made some typically trenchant comments. However, as this is not a Government Bill I shall allow the noble Lord, Lord Willis, to field those trenchant comments from the Liberal benches. The noble Lord, Lord Jenkins of Putney, had some interesting thoughts on the copying of cars. Many non-technical Members of your Lordships' House may feel that one already needs a technical eye to understand overhead camshafts, twin valves or what seem to many of us to be heaps of metal with various accoutrements that seem to convey us from our homes to your Lordships' House and back. It seems to many of us that the copying of cars already goes on. We note the trenchant comments made by the noble Lord, Lord Jenkins, about artists and how they could do with protection.
When we come to legal matters and, above all, the matters we are discussing, the noble Lord, Lord Mishcon, brings the art of wit and no little amusement to our debate. The noble Lord mentioned that technology had overtaken the Copyright Act 1956. This is also the view of the department. All judges at all levels will be glad of the noble Lord's support that they never work to rule or delay their judgments especially in home taping cases. The noble Lord mentioned a case. He should know that, like all good Scouts, Members of your Lordships' House and, above all, Government spokesmen, try to be well prepared.
I did, with no little difficulty, find the interesting case that was mentioned both by the noble Lord, Lord Willis, and by the noble Lord, Lord Mishcon. The noble Lord, Lord Mishcon, referred to it as a simple case. I should like, with your Lordships' forbearance, 324 to mention that in Reports of Patent, Design and Trade Mark Cases No. 25 in 1981, we start at page 407. The case of CBS Inc. and Another versus Ames Records and Tapes Limited, dated 8th October 1981, took place in the Chancery Division before Mr. Justice Whitford. Your Lordships will be interested to know that the judgment of Mr. Justice Whitford carried on to page 428. These are pages of 45 lines or more. We therefore take the noble Lord's comment that this is a simple case with a pinch of salt.
§ Lord Mishcon
My Lords, will the noble Lord not agree that some judges, like some noble Ministers, have very long briefs and very long judgments, and that sometimes it is usual, especially at this hour, to abbreviate them.
§ Lord Lyell
My Lords, I take closely to heart the judgment of the noble Lord. Lord Mishcon. I would however draw to his attention and to that of your Lordships that this case covers fascinating observations on the making of trap orders. Furthermore Mr. Justice Whitford took a close look at a publication known as Music Week. Apart from working hard, judges seem to do all kinds of things. Later on that page Mr. Justice Whitford took a close look and quoted extensively from Billboard magazine, which goes to show that clearly such matters of technology and art penetrate even into the Chancery Division of the High Court of Justice. But we took a great deal of encouragement from the noble Lord, Lord Mishcon, when he said that this was a simple case. We take his word for it, and, indeed. I am sure that my noble and learned friend will be grateful for his support for the legal profession in this and, indeed, in many other areas.
I would conclude our discussion and comments on the Second Reading of the Bill before us this afternoon by making the general observation that the Government do not see the piecemeal approach to copyright reform embodied in this Bill as the correct way to modernise our law. We believe that it can lead to distortions and anomalies by dealing with different but inter related sections of the subject in different ways. As your Lordships will be aware, copyright is a complex subject with many facets, but those facets are closely interlinked and need to be considered together if unforeseen inconsistencies are to be avoided.
The Government are in general opposed to the piecemeal approach to copyright reform, but it is a mark both of our constructive attitude and, indeed, of the extreme urgency that has recently arisen in the field of video piracy that we have been prepared to support two immediate measures to counteract it—one which became law last Session and one which will shortly be considered by your Lordships' House having completed its passage in another place. While we do not deny that the home-taping question is pressing, it simply cannot be solved in the ways proposed in the Bill before us this afternoon. We hope that your Lordships will agree that it must await the completion of the Government's review. I have stressed—and I stress it again—that the outcome of this review will emerge as soon as possible.
I may have expressed some strong criticisms of the Bill, but at the same time I welcome the opportunity that it presents for a consideration of the question of 325 rental. We really do not want to hinder debate in your Lordships' House on this important subject, and, therefore, we would certainly give the Bill a fair wind this afternoon.
§ 2.57 p.m.
§ Lord Willis
My Lords, I am most grateful to all noble Lords who have spoken today. I must say that this afternoon I felt that I had one of my greatest triumphs when the noble Lord, Lord Mishcon, said that there were certain clauses in this Bill that would make lawyers tremble. It has long been my ambition to make lawyers tremble, and if this Bill goes a small way towards achieving that lifetime's ambition then I shall be delighted.
I should like to thank all noble Lords who have taken part in the debate. There is one phrase that I have learned to dread over many years and that is, "Having said that …". I remember that when I took my first script into the producer he said how fantastic and brilliant it was, and then of course, he went on to say, "Having said that …". I had the same feeling when listening to the debate this afternoon.
I do not think it would have been necessary for me to bring this Bill forward at all—and I do not want to be unkind to the noble Lord the Minister—if the Government had hurried a little more with what they have called their thorough overall review of copyright. Your Lordships will recall that last year I said that it had been seven years since the report had been issued and the Government had said that they would let us have a public debate on it. It is now eight years that that public debate has been raging, and that is why this piecemeal legislation is coming forward.
There are one or two other points which I shall not bother to go into with your Lordships, but as regards the question of video rental we are rather running on one leg because at the moment people do not rent videos to copy; they rent them to view. To hire a television film on a video tape and then take it home and copy it on to another tape is a very expensive process. At the moment you cannot buy the machines for that readily in the market. So that is not really an issue at present, and neither are one or two of the other points that were raised. I am very cognisant of the fact 326 that I have kept your Lordships away from your country retreats quite long enough. Therefore, I beg to move.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.