HL Deb 10 May 1985 vol 463 cc865-75

11.47 a.m.

Viscount Colville of Culross

My Lords, I beg to move that this Bill be now read a second time.

The Bill comes to us from another place, where it was in the capable hands of my honourable friend the Member of Corby. He justified it in a formidable speech on Second Reading and he was confronted with no problems, because it received heartfelt support from all quarters of that House. That may well not be surprising—and I hope that it will be repeated here—because he established that there is indeed a very serious mischief which needs an urgent remedy.

Noble Lords will, I am sure, be familiar with the range of computer programs that there are now available on the market. There are the expensive and complicated ones which are for major business or administrative use on large or medium size computers, whose programs can cost from £1,000 upwards according to the complication and the ingenuity. There is a medium size range for micros, where a program would cost between £50 and £1,000, and these are of invaluable use to large numbers of organisations. In the Mental Health Act Commission, of which I am the chairman, we have one in the office which acts as an electronic card index and I do not know what we would do without it. Then there is the smallest range in terms of price at £5 to £50 a copy; there are computer games and there is educational material, usually on cassettes.

If they are successful—and I emphasise that it is only the successful ones that are treated in this way—they are at the moment widely copied and counterfeited. The difficulty is that it is very far from clear for the purposes of civil proceedings whether the Copyright Act 1956 covers this sort of material at all; and as for the criminal law one has to rely on the Trade Descriptions Act, where the maximum penalties are derisory and are no deterrent whatsoever for people who wish to go in for pirating these progammes. This has not been recognised for the first time in 1985. As long ago as 1977, the report prepared by Mr. Justice Whitford recommended that an extension of copyright is the most appropriate protection for this sort of intellectual property.

In 1956 computer programs, if they had been heard of at all, were in their infancy. The Government issued a Green Paper in 1981 and agreed with the Whitford Report. They proposed legislation to the same effect and the Information Technology Advisory Panel said the same in 1983. The difficulty about it is that in the hands of Government it would be a comprehensive measure and one which would have to be aligned to what is going on among our colleagues in the rest of Europe. This is a major operation because they have a different approach to copyright in many of those countries, and one can quite see that it is not something which can be solved easily or in a facile way. It is taking some time, although I am sure that the Government are doing everything they can.

But in the meantime the market in Western Europe for software sales is at the moment, or was in 1981, 1,300 million dollars—everything to do with computers seems to be in dollars—and it is expected to grow to 7,000 million dollars by the end of this decade. So it is a very large market indeed. Involved in preparing programs for this market is a great deal of brain power and manufacturing and selling initiatives to follow the development of the program. Perhaps I may give an example. A computer game of any merit costs between £50,000 and £100,000 to create and get on to the market. The more complicated the game, the more expensive it is. But a computer game costing that much can be copied on to a floppy disk in 40 seconds and can be on the pirate market in a month. That is probably the end of any profit that will be made by the legitimate creator of that game or program.

The losses through this piracy are extremely hard to quantify, but some examples were given in another place. One major manufacturer who produces high cost programs decided that he would take one of the pirates to the civil courts. The firm thought that it was losing something in the region of £10 million per annum through illicit copying and counterfeiting. In the course of suing one of the people who was engaged in this business a settlement of £5 million dollars was reached in the courts. To go through the scale, the estimate is that in the medium cost range there are about three illegal copies for each one successful genuine program: in the lower cost range illegal copies outnumber the legitimate ones by about seven to 12 times. So it is big business.

The smaller firms find that the route through civil proceedings is both daunting and too expensive. It is probably for this reason that some of those smaller firms with great ingenuity and great potential have simply gone out of business. Involved in all this are well paid, productive jobs which are very liable to be lost, and lost, too, is capable of being the United Kingdom's position in the international market for this kind of material. We are not in the forefront at the moment, though I believe we once were, and this may be due in part to the lack of protection for those who create and sell these programs of their own genuine manufacture.

So what we need to do is to protect the legitimate firms because they will go on producing more and new programs to fill the market and to develop it in ways which at the moment are not done. But the pirate produces no innovation. All he does is to prey on and kill the legitimate producer of this software. The remedy in this Bill takes in the amendments that were made in Parliament in 1983 to protect videos. I thought that this was familiar when I looked at the material. I recall that I took the Bill through in 1983 myself.

A specific amendment was made to the Copyright Act to deal with videos and to cope with the piracy that was going on in that field. New provisions were inserted into the 1956 Act providing for greatly increased fines in the magistrates' courts and in the Crown Court on indictment for an unlimited fine with or without imprisonment for up to two years. In addition, there was the provision which allows search warrants to be issued when a constable can satisfy a justice of the peace that an offence is either about to be committed or has already been committed. That provision is attracted to computer programs by Clause 1 of the Bill. Clause 1 also says what is in this field an "adaptation". An "adaptation" is a term of art in the Copyright Act. An "adaptation" is one of the things that is restricted by the Copyright Act to any copyright work. It needs to be defined in its relation to computer programs.

Clause 2 brings in the powers for penalities and search warrants that I have just mentioned, which were inserted into the Copyright Act by the 1983 legislation. It provides that where specific items can be identified and can come into existence and be sold there are powers to search for them and in due course to take criminal proceedings. This is needed because the provisions in the 1983 Act were specifically limited to sound recordings and cinematograph films. Cinematograph films are defined in the 1956 Act in a way which covers videos, but it is abundantly clear that neither of those two terms is apt—or at any rate, it is extremely doubtful whether it is apt—to deal with computer programs. That is the reason why the existing law is not sufficient to deal with this mischief. Clause 3 is self-explanatory.

The 1983 Act to deal with videos has been dramatically successful in its operation. The estimate is that there has been a two-thirds reduction in the pirating of videos as a result of the use of the powers of the Act. The police and the video industry have co-operated most actively and most successfully; and very much following upon that example, the software industry has now itself set about the task of providing its own enforcement agency in the same way as did the video industry two years ago. They have been operating this since the middle of last year and they are now ready to use their machinery to co-operate in the same way with the police—not, I hasten to say, to do it by themselves—so that, if necessary, criminal proceedings can be brought in the ordinary way. So instead of the difficult, expensive and doubtful criminal proceedings, which may or may not be possible under the Copyright Act 1956 if it is left as it is, we shall have the option of rapid and effective criminal proceedings with a penalty, in the Crown Court at least, which ought to be enough to deter anybody.

What those who advocate the Bill say is that it needs to be emphasised that copying computer programs is a crime. Many people do not think it is. They copy away quite happily without thinking about what they are doing. This Bill will make it abundantly clear that it is the view of Parliament that copying is a crime, and a serious crime at that.

We are not alone in taking this kind of step. In the United States of America, federal legislation has extended copyright law to computer programs. The same has happened in Australia, and the Canadians are contemplating such action. On the continent of Europe the courts, operating under a different structure of law of course, have been interpreting copyright protection in a way that covers and protects computer programs. I suggest that we need to follow the good example of all those countries, which are leading manufacturers and users of computer programs.

Before I conclude, I give warning of two small matters. There is a necessity to amend the Long Title. Quite apart from anything else, it spells the word "programs" in the British way, which is wholly illegitimate in this context. I am afraid that we have to adopt the American phraseology, and I think it can be simplified in addition to that.

There is a rather more complicated point concerning another term of art in the law of copyright called "material form". This appears in two contexts. Reproducing a work in any material form is one of the practices restricted by the law of copyright. There is another reference to it where a work to be subject to the law of copyright is in fact created. The expression in the 1956 Act says that the creation occurs when the work is reduced to writing or some other material form. When one makes a computer program, or if one adapts a computer program in order to make personal use of it, one very often does not reproduce that program in writing at all. Instead, the whole process is carried out only on the computer. One either creates the program from nothing on the computer or modifies a program already on the computer—but often nothing is actually written down. At that stage the program exists only in the memory of the computer.

This aspect needs to be protected because if anyone saves the program off the computer at that stage, then they will have copied it. If we do not make sure that the material stored in the computer's memory is in itself the creation of a copyright work, then there will be no protection for it. If this Bill receives its Second Reading today, I shall be bringing forward an amendment at Committee stage in order to cover this point, which I believe is an important one.

Otherwise, the Bill seems to be simple enough. I hope I have said enough to convince your Lordships that this Bill is something we urgently need in advance of the Government's overall legislation. If it turns out, when that legislation comes along, that there are further amendments or developments to be taken into account, then that will be the opportunity to consider them. For the moment, I suggest that we adopt the well tried method which we introduced two years ago for video material—and that we do so now in order that this particular mischief can be stopped in its tracks. I beg to move.

Moved, That the Bill be now read a second time.—(Viscount Colville of Culross.)

12.3 p.m.

Lord Mottistone

My Lords, I have to declare an interest, in that I advise the British Equipment Trade Association. My noble friend, in his inimitable way, introduced this Bill so succinctly, clearly and fully that there is practically nothing left for me to say. I entirely support this Bill and hope that your Lordships will give it an easy Second Reading.

The amendments which my noble friend spoke about seem to me to be very necessary—certainly the second amendment he mentioned, although I am not so sure about the first of them. I understood that the spelling of the word "programs" in the Bill is the American one and that it needs to be changed to the English spelling. Otherwise, I would agree with that amendment too. I hope that the Bill will have a rapid passage through this House of Parliament.

Lord Morris

My Lords, I must first apologise to the House for leaping up in the gap on the speakers' list. I want to raise one point of such appalling pedantry that I am almost ashamed to mention it—but I think it is important. It relates to Clause 3 of the Bill, which states in subsection (1) that: This Act may be cited as the Copyright (Computer Software) Amendment Act 1985". As your Lordships will appreciate, the body of this Bill—and indeed its Long Title as it will be amended—refers to and deals with one subject and one subject only; that is, computer programs.

A simple definition of software which I gleaned from an American dictionary—which is rather unfortunately named Funk and Wagnalls—is given as: Any of the programs used in operating a digital computer, as input and output programs: distinguished from hardware. That definition obviously hangs on the definition of hardware—which is of course any of the manufactured part of a digital computer.

The Oxford Dictionary of Computing—which, strangely enough, uses the American spelling of the word "program"—offers a rather better definition for software: A generic term for those components of a computer system that are intangible rather than physical. It is most commonly used to refer to the programs executed by a computer system as distinct from the physical hardware of that computer system, and to encompass both symbolic and executable forms for such programs". My point is that software embraces programs but that the word "programs" does not embrace software.

Although I am not a lawyer, I understand that the Short Title is meant to be illustrative so far as the Bill is concerned and does not form part of the Bill, although the Long Title does. I believe that if we leave the Short Title in its present form we shall be giving a lot of fun to the lawyers. I should be the last person in the world to deny the lawyers their fun but I am sure my noble friend would be most anxious—as all noble Lords would be—to get this point absolutely right. I felt it was better to raise it at this stage and allow my noble friend to handle the matter in Committee rather than try myself to fiddle with this most important Bill, the Second Reading of which I welcome most warmly.

12.7 p.m.

Lord Cawley

My Lords, I must also apologise for not putting my name down to speak. It is only because a Select Committee has been adjourned that I have been able to appear here this morning.

I believe it is important that his Bill should put an end to anybody wishing to take out a patent for software. This has always been a menace to applicants for patents in that the controller can declare a patent to be a secret patent. I understand that a recent patent application in respect of a signal to prevent the copying of computer programs was declared secret. This means that the applicant can do nothing whatsoever with his information until he obtains a further order from the Comptroller-General.

I believe that literary copyright protection will now be available for such a signal, and so there will be no possibility of the comptroller stopping the use of such a device. That is certainly a step forward.

Lord Kilbracken

My Lords, perhaps I may intervene for a moment on the question of the spelling of the word "program". I am a little confused, because I understood the noble Viscount to say that an amendment to the Long Title of the Bill will be necessary because the word was wrongly spelt there. I have studied the Bill, and as far as I can see the word "program" is given the American spelling throughout. I should like to add my support to what was said by the noble Lord, Lord Mottistone: I think that the word should be spelt our way throughout, rather than amend the Bill so that it is spelt the American way.

12.10 p.m.

Lord McIntosh of Haringey

My Lords, I say at the outset that we warmly support the Bill, in order that there should be no confusion about it. We think it is a necessary measure, and one which deserves a speedy passage through your Lordships' House.

I am grateful to the three noble Lords who filled the gap in the list of speakers because they have explained to me why it is that there are pages in software manuals which say across them, "This page intentionally left blank". I now learn it is for the sort of valuable contributions we have had from the three noble Lords who filled the gap on the speakers' list!

My Lords, we believe this Bill to be a necessary measure. I will be forgiven for doubts as to whether it is a sufficient measure, because I believe the problem of enforcement will be a continuing one. Much as I welcome the efforts of the Federation Against Software Theft—and "theft" is indeed not too strong a word for this—I believe there are very severe difficulties against the effective enforcement of such legislation. These difficulties will become greater rather than less as time goes on.

I have an interest in this myself (not a financial one) both as the holder of a vendor licence for a suite of computer graphics software, and as a holder of a user licence for various data-based management and operating systems packages. I shall be brief, because, since I am on technology, I left my computer processing data which I started to enter this morning, and I want to get back for when it is free for me to use again.

The whole question of communications between data processing installations is becoming more complex. The existence of network capability, for example, puts in question what a user licence consists of. If you sell someone a program to be used on a single numbered machine and he has a network of eight of those machines, with no ill will he may not actually know which of the machines is producing the analyses or the data for which the software is being used. It becomes a meaningless distinction as to the number put on the plate at the back of the machine. This is only one example of the difficulty there will be in enforcement of the legislation.

That difficulty is emphasised by the fact that the software almost invariably consists of those electronic forms referred to in the Bill, and also of manuals which in themselves are copyright, and always have been, under the 1956 Copyright Act. Most computer software, other than the merely (if I may say so) trivial computer games is not readily usable without a manual. If the copyright of the manual had really been effective, this Bill would not be necessary for anything other than the third category of software to which the noble Viscount, Lord Colville of Culross, referred. I believe that, again, there will be continuing scope for lawyers to make money out of this sphere of the law.

In fact, subject to the observations which the noble Viscount may have on the speeches that have been made in the gap, the Bill is in fact drafted as concisely and as efficiently as anyone can conceive such a Bill to be drafted. I understand it received a prize from the Statute Law Society for its drafting, and I congratulate those responsible for it. It does not suffer particularly from what my noble friend Lord Prys-Davies some time ago described as the paralysing hand of the parliamentary draughtsman.

On the issue raised by my noble friend and by the noble Lords, Lord Mottistone and Lord Morris, I add my support for the American spelling. I believe there is a distinction between the word "programme", spelt with "mme" at the end, and what is a quite different thing—in effect a new word which has a completely separate meaning and ought to have a separate spelling even if it cannot have a separate pronunciation. I believe the Bill is correctly drafted in that way, and ought not to be amended.

The Government Minister, in welcoming the Bill in another place, said it was an interim measure. That is indeed the case. It ought not to be thought that the passage of this necessary interim measure is any excuse for the Government to delay the review of copyright legislation which is badly overdue since the Whitford Report and the Green Paper, which is now four years old. I leave that thought with the Government in welcoming the Bill and assuring the noble Viscount of our support.

12.15 p.m.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)

My Lords, on behalf of the Government I welcome and support the Bill so clearly and concisely introduced by my noble friend Lord Colville of Culross. This is an important measure. As he has reminded us, it received unanimous approval during its passage in another place, and I hope your Lordships will accord it similar support in this House. This Bill is particularly important at a time when we wish to encourage the continued development and expansion of our successful software industry. By providing a secure legal foundation for the creators of original computer programs, we are demonstrating our desire to help this industry build on its current success.

As my noble friend explained, the objective of the Bill is to stamp out piracy. The noble Lord, Lord McIntosh of Haringey, described this rather more succinctly and used the word "theft". I do not know that I would disagree with him in that description, but the objective is achieved by two clauses in the Bill which are designed to complement one another. These two limbs of the Bill will together ensure that copyright law provides an effective safeguard for the software industry, which is dependent on expertise in the writing of computer programs.

I am sure noble Lords will recall the changes made to copyright law in 1982 and 1983 to deal with the very serious problem of video piracy. I am able to confirm what my noble friend said with regard to the effectiveness of those measures. As he said, they were concerned with the criminal provisions of the Copyright Act 1956. If I may say so, my noble friend Lord Colville of Culross himself played an important part in introducing some of the measures into this Chamber. He is to be congratulated on that contribution, which has had such a significant effect upon video piracy. In the same way, he is to be congratulated on the introduction of this Bill into this House. In supporting the Bill, the Government join with the software industry in sounding a clear message to software pirates about the serious consequences of involvement in this illegal activity.

So far as concerns the contributions of my noble friends Lord Mottistone and Lord Cawley, I accept and my noble friend Lord Colville of Culross will accept that the matters they have raised are very largely in his domain. But I can assure him that the Government wish to give him whatever assistance they can in resolving the points which have been raised, should this be necessary.

Finally, I turn to the points raised by the noble Lord, Lord McIntosh of Haringey, when he said that he did not think the Bill would go far enough. I confirm what my right honourable friend said in another place and I make it quite clear that the Government see this Bill as only an interim measure to deal with the immediate problems concerning copyright law and computers. We recognise the points he raised with regard to the Whitford Report and the Green Paper, and we intend to bring forward a comprehensive copyright Bill to deal with the wider reforms that are certainly needed in copyright law. We shall do this as soon as parliamentary time permits. That will certainly be no later, I suspect, than the 1986–87 Session. That is not too far away for the amount of consideration that has to be given, not only to the general copyright law but to the issues which have been raised here today.

Lord McIntosh of Haringey

My Lords, may I express my appreciation to the Minister for that statement? I was afraid he was going to rest on his first sentence about parliamentary time, which is as long as a piece of string. I am, therefore, grateful for his further precision.

Lord Lucas of Chilworth

My Lords, it is hoped that parliamentary time will be found in the time I have indicated. With that, I ask all noble Lords to support the Bill.

Viscount Colville of Culross

My Lords, that has been a happy interlude in our proceedings, because all I need do is to say how grateful I am to all those who have spoken on the various matters that they have raised. I think, however, that I ought to say something about one or two of them.

The noble Lord, Lord McIntosh, could well be right that with the ingenuity which is being deployed in order to copy and to counterfeit programs of this sort we may not necessarily have come up with a definitive answer. I suspect that my noble friend Lord Lucas of Chilworth has provided exactly the information we need. If his timetable is right and this Bill comes into operation, as it should, I suppose, by the end of the summer, we shall have had an opportunity of trying it out in practice to see whether it does work or to what extent defects become apparent; and to what extent processes have changed or where other new methods have been devised to copy programs and get round the provisions of this Bill further protection is necessary. I should have thought, therefore, that two years was about the right period during which to judge whether this is an effective measure. That, of course, is what we have already had in regard to videos. Therefore, I welcome what my noble friend on the Front Bench said about the timetable and that we shall be able to come back to this.

Other noble Lords have been good enough to contribute to the debate. I am extremely grateful to my noble friend for his promise to assist me on the drafting. I am not, like my noble friend Lord Cawley, or the noble Lord, Lord Lloyd of Kilgerran, or, indeed, the noble Lord, Lord Lloyd of Hampstead, an expert in the field of copyright patent. I would need someone to hold my hand in dealing with the tricky problems that have been raised. I doubt whether I could adequately answer my noble friend Lord Moms today. I would be a little frightened of tying down the terminology of the Bill, the Title of the Bill, whether or not it is going to be used to interpret too closely what is meant. As the noble Lord, Lord McIntosh, said, it is not just the electronic aspect which is the program; it is the manual as well.

I notice that in Clause 1(2) we are talking about versions of a program and I should think that versions of a program could take the form—and this is where perhaps technical and electronic advances may come forward—which could be a little bit wider than what at present appears in the dictionaries quoted by my noble friend. I should like to look at this point but I would rather see it more comprehensive than less comprehensive, if I had the choice. I believe that the whole problem of copyright has been that definitions have been too narrow. Things have evolved in a way which were never foreseen in 1956, and we do not want to tie our hands any more than we need. However, I shall look at my noble friend's comments.

My noble friend Lord Cawley raised a novel point so far as proceedings on this Bill are concerned. I am glad that he has drawn attention to another positive merit because what those who write computer programs try to do is to build into them anti-copying devices of one sort or another. The pirates usually manage to get round them in the end. These are perhaps devices which are built into a specific program, or they may be more generalised devices of the sort that my noble friend Lord Cawley referred to and would themselves be susceptible of protection under this Bill. If so, it is all the better because, as I have previously said, in so far as the industry can help itself that is a very positive contribution which I feel Parliament should encourage.

The noble Lord, Lord Kilbracken, pointed to an area where I am afraid I have slipped up. When this Bill was in another place the word "program" was spelt in the English way in the Long Title. The subtlety of the Table here has enabled it to be printed in the American way. However, I still maintain that we can improve the Long Title and I hope that the noble Lord, Lord Kilbracken—of course, I shall welcome him discussing this point at Committee stage—will listen to those who say that "program", spelt with just the "m" at the end is now a technical term and has a different meaning to that which one sees in the Radio Times, or wherever.

Lord Kilbracken

My Lords, it may not have occurred to the noble Viscount that in the United States of America whatever the sense of the word it is spelt the same way.

Viscount Colville of Culross

My Lords, that is perfectly true but I am not legislating in Washington, I am legislating in London, and in this country there are two different meanings. We have adopted the American spelling for a specific reason. However, let us go back to that in Committee, if need be. I am grateful to the noble Lord for making the point.

I conclude by again thanking all noble Lords who have spoken and given so much support to the Bill. I hope that it may now proceed rapidly through the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.