HL Deb 25 November 1996 vol 576 cc34-52

4.33 p.m.

The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie) rose to move, That the draft regulations laid before the House on 11th July be approved [27th Report (Session 1995-96) from the Joint Committee].

The noble and learned Lord said: My Lords, these regulations amend the Copyright, Designs and Patents Act 1988 in order to implement EC Directives 92/100 and 93/83, the so-called "rental and lending" and "cable and satellite" directives. They also cover provisions of the so-called "term" directive, 93/98, which were not dealt with in regulations approved by Parliament last December implementing the rest of that directive in the United Kingdom. Except for a few provisions, implementation of the directives is already overdue, and we very much regret that the complexities of the regulations and the need for earlier consultations with interested parties have meant that we have been unable to complete their preparation on time.

Directive 92/100 deals with two areas: first, rights in respect of commercial rental and non-profit lending to the public of copyright works; and, secondly, rights granted to performing artists, record producers and broadcasters as regards other forms of exploitation of works and performances. Most of the latter rights are already provided in the 1988 Act, and the main changes to UK law resulting from Directive 92/100 are therefore in the fields of rental and lending. The 1988 Act already grants rights to authorise rental of computer programs, films and sound recordings, but the directive means that such rights will now also apply to almost all other kinds of works including, for example, music and works of art. Moreover, the directive requires that rights to authorise rental of films and sound recordings are granted not only to producers of those works, as is already the case in the United Kingdom, but also to contributing authors and performers. In the case of films, however, the directive specifies that these rights of performers are presumed to be transferred to the producer on contracting to make a film, unless there is agreement to the contrary. We are also applying a similar presumption to most authors' rights, as is permitted by the directive.

However, as required by the directive, authors and performers will retain a right to equitable remuneration for rental of films and sound recordings where their rights to authorise rental have been transferred to producers, whether voluntarily or by presumption. The directive leaves freedom to decide from whom this remuneration may be claimed, and we have concluded that it should be payable by producers, with whom authors and performers already have contractual arrangements under which they receive payments for rental. The remuneration right will not become exercisable until 1st April 1997, again, as is permitted by the directive.

The directive also requires public lending rights to be provided for the same kinds of works and beneficiaries as in the case of rental, but permits certain categories of establishment to be exempted from liability for lending. The regulations provide that schools and other educational bodies will be exempt, and in practice, therefore, the lending provisions will be mainly of relevance to public libraries. The directive also offers a choice between granting exclusive rights to authorise lending, or rights to remuneration for lending. In the UK, authors are remunerated for public library lending of books through the scheme established under the Public Lending Right Act 1979, and the regulations provide that that arrangement will continue. However, UK law already grants exclusive rights to authorise library lending of films, sound recordings and computer programs. The regulations maintain this approach and extend it to other forms of works to which lending rights will now apply, but subject to a reserve power for the Secretary of State to order that lending shall be licensed, as against payment of royalties, in cases of unreasonable refusal to permit lending.

Directive 92/100 has also necessitated a considerable number of adjustments to the 1988 Act in order to put certain performers' rights on a similar footing to those of authors, which was not previously the case. In addition, it requires the introduction of two new rights for performers, those being a right to authorise distribution of recordings of their performances and a right to remuneration for broadcasting and public performance of sound recordings of their performances. The directive leaves considerable flexibility as to the manner in which that latter right is formulated, and the regulations are framed such that performers will have a right to be equitably remunerated by sound recording producers, who already have rights enabling them to obtain payment from users.

Directive 93/83 on cable and satellite broadcasting necessitates two main changes to UK law. The first concerns which national copyright law should apply to satellite broadcasts and, as required by the directive, the regulations provide that this will be the law of the country of origin of the broadcast, subject to certain safeguards applying where a broadcast commences in a country with lower copyright protection than the EEA but an EEA broadcaster or satellite uplink station is involved. The other main change is a requirement that copyright owners collectively exercise rights to authorise cable retransmission of broadcasts from other EEA states containing their works.

Two remaining aspects of Directive 93/98 are also dealt with in the regulations. The first is a requirement to introduce a 25-year period of protection of a kind similar to copyright for the benefit of the first person to make available to the public a previously unpublished work in which copyright has expired. The other is a requirement to treat principal directors of films as authors of films for copyright purposes. However, the directive leaves freedom to determine who else is to be so treated, and the regulations provide that, as now in the United Kingdom, film producers will remain authors, along with directors. In addition, as permitted by the directive, the authorship change will not apply to films created before 1st July 1994. The regulations also contain a number of transitional provisions chiefly concerned with the new rental and lending rights resulting from Directive 92/100, which will apply to existing works and performances.

We received many submissions from interested parties, for which we are grateful, and we have done our best to take them into account in formulating these complex regulations. However, we have had to strike a balance between competing points of view on areas of the directives which leave flexibility to member states. Inevitably, it has not been possible to satisfy everyone, but I am confident that the solutions we have arrived at are both fair and workable. I beg to move.

Moved, That the draft regulations laid before the House on 1 1 th July be approved [27th Report (Session 1995-96) from the Joint Committee].—(Lord Fraser of Carmyllie.)

4.40 p.m.

Lord Brain

My Lords, I thank the Minister for introducing the statutory instrument in the way that he did. He took on board in his introduction a number of points that I might have made; therefore I hope to be shorter than I might otherwise have been.

As usual when speaking in a debate on copyright I declare an interest to the extent that I am treasurer of the British Copyright Council; however, today, I do not have any financial interest in any of the matters under discussion. First, I should like to repeat the remark made in another place that it is a great pity that these directives were not implemented by means of a Bill rather than a statutory instrument. Had it been done in that way, with the Committee stage perhaps being held in the Moses Room, we should have been able to elicit answers more quickly and concisely and I should certainly not have had to make the long speech that I now have to make.

I thank the Minister for one part of the statutory instrument which he did not mention; namely, the tidying up of the directive on duration in relation to the life of photographs. When it was debated last December, I made the point that there was some doubt. The Minister has taken the matter on board and I thank him for clarifying it.

The directive relating to cable and satellite transmissions is relatively clear and straightforward. There is one small point on which I should like confirmation from the Minister when he replies. Paragraph 7 of the statutory instrument adds a new Section 144A to the 1988 Act. New Section 144A (1) correctly states that the owner of the copyright may, grant or refuse authorisation for cable re-transmission". The Minister made that point in his opening remarks. However, all the other paragraphs of new Section 144A appear to assume that the cable re-transmission right will be granted. I think that that was simply the easiest way to draft the clause; however, I should like confirmation that there is not a presumption and that a licensing body can still refuse authorisation.

The most important directive covered is that on rental and lending. I shall not repeat the two principal aims in the explanatory recital of the directives. They were well repeated in another place. The first establishes the right of authors to share any income generated from the rental of any work to which they have made a contribution. The second states that that remuneration has to be equitable or fair.

A general point emerged from the debate in another place. The statutory instrument may not enable the generally weaker negotiating parties—authors and performers—to achieve their equitable remuneration against wealthy companies easily. They may have to go to the courts or the copyright tribunal, as suggested several times by the Minister in another place, to have matters settled. Does the Minister consider that one of the basic aims of all collecting societies should be to enable them to fund actions by their members to establish some case law? Could one interpret new Section 191G(6), set out in paragraph 21 of the statutory instrument, as encouraging that? Case law in this matter is important. Another point is: is there any way by which the copyright tribunal might act as a mediator rather than an adjudicator and so speed up the process? I do not know what the feeling is; nor do I know the exact detail.

Following the points on equitable remuneration and how it is to be obtained, I am slightly concerned about two parts of paragraph 10 of the statutory instrument. It relates to new Section 18A. Two pairs of words concern me. The first is, making a copy of the work available". I hope the Minister can confirm that those words apply only to a copy that has been correctly authorised under Section 16 of the 1988 Act and that they are not a licence to make further copies of the work for rental or lending. The second pair of words appears in the same sub-paragraph. They are, "or may be returned". Surely if you lend or rent something you expect it to be returned. The words have an air of allowing an extra copy to be made for the equivalent of sale or gift. What does the Minister feel about those words?

On a similar point, again relating to new Section 18A, I am concerned that subsection (6) might be taken to imply that the original copy could be lent while an extra copy is made and retained by the person engaged in the rental or lending. I hope that the Minister can confirm that I do not misunderstand the paragraph.

Turning to paragraph 11 of the statutory instrument, as I understand it new Section 36A is to be read with new Section 18A, giving the result that there is no infringement of any right met by an educational establishment provided it meets the operation of subsection (5) of the new section. In other words, it is part of the educational activities of the establishment that something is lent out and there is no financial benefit beyond the normal covering of the costs of that establishment and that it is not a rental.

Turning to paragraph 12 of the statutory instrument—this is the complicated part—am I right in thinking that the Government's aim in drafting new Section 93A as they have is to ensure that the film or video producer is the first link in any chain leading to the income to be divided under Section 93B so that it may benefit those holding these rights to income? Does it follow that should the producer have ceased to exist—this may sometimes happen when a film company is formed just to make the film or video and then put into voluntary liquidation—the rental rights can be traced by following the copyright chain to any particular body? Do the Government agree that because a copyright continues to exist, so must a rental right? Does the Minister consider that the wording of the clause allows an application to the copyright tribunal so that the links in the chain to a source of potential income can be identified? If he does agree, is there any way that there could be a direction issued by the copyright tribunal so that the chain has to be disclosed to those entitled to that income without the expense and/or delay of a copyright tribunal hearing?

Having discussed and questioned at some length how income may have been generated and traced, I now move on to how it may be shared by applying the principles of "equitable remuneration" and "the importance of the contribution" made by the various people likely to benefit from the income generated. In doing so, I refer to paragraph 14 of the statutory instrument. New Section 93B sets out the position reasonably clearly, but I have three questions.

Is the separation in new Section 93B(1)(a) and (b) of the author and principal director meant to suggest any difference in balance between the amounts of contribution? I suspect not. Am I right in thinking that Section 93B(3) is intended as a link in the chain that I described earlier with the intention of enabling rental income to be recovered from the person receiving significant income from the rentals, who is probably a distributor or a wholesaler rather than the local video shop? I do not think that producers, unlike some collecting societies, have the ability to visit every video shop in the way that collecting societies visit hairdressers, and so on. I believe that that point is fairly important.

Does new Section 93B(4) imply that the parties to any agreement must have available to them the full details of any rental agreements and of all income resulting from the rental flowing to the rental right owner? Can they go to the copyright tribunal to ensure that they receive the information? This appears to be covered by the new Section 93C, but I should be grateful if the Minister could confirm that subsection (4) does not prevent an application under subsection (2) if, for example, the single payment was made on the basis of, say, 500,000 copies being rented when in fact the film or video in question turns out to be a blockbuster and 5 million copies are sold.

I now turn to performers' rights. As the Minister said, these are new rights and will result in many more additions to the 1988 Act. Am I right in saying—I think the Minister more or less confirmed this—that these new sections give the performers largely the same rights as I have discussed at some length for authors? Authors have a well established network of collecting societies, both in the UK and abroad, for the collection and distribution of income from rights. Is it the intention of the statutory instrument that performers should establish, under new Section 191G(6), a similar network? The wording is: a 'collecting society' means a society or other organisation which has as its main object, or one of its main objects, the exercise of the right to equitable remuneration on behalf of more than one performer. I hope this implies that it will have to be managed so that the money can be distributed to the performers.

Finally, having discussed what these rights are and how income from them may be traced, I have a question with regard to giving notice as required by paragraph 33 of the statutory instrument. Should this notice be given in writing? Can it be given by the author's or performer's agent, manager or collecting society? To whom should it be given, the producer, the director, the distributor or the rental right owner? Can the Minister think of anybody else who might need to be informed? Can the copyright tribunal remedy any defective notice when it has been impossible to complete the chain to ensure that it ends up on the right desk or the right fax machine in the time available? I am well aware that these draft directives have existed since July, but some of the members of the British Copyright Council are uncertain as to their exact meaning. I believe that the closing date for giving this notice is 31st December of this year. I should therefore be grateful for clarification from the Minister with regard to rectification by the copyright tribunal. I believe that the letter from the Minister, Mr. Ian Taylor, to Mr. Geoffrey Hoon following the debate in another place confirms that equitable remuneration should be given for all agreements made prior to 1st July 1994 concerning all works still in copyright as amended by the duration statutory instrument. It has been suggested that the date of the original directive might have a bearing on this, but I understand that that is not so.

I apologise for the length of my speech. I was aware, as I have explained, that the letter was in the Library, but I was unable to obtain an accurate copy of it in time to consult and I have therefore had to ask the Minister questions.

4.57 p.m.

Baroness Dean of Thornton-le-Fylde

My Lords, I should start by declaring an interest. I am the unpaid referee for the Musicians' Union on disputes between individual members and the executive of that union. My predecessor was the noble Lord, Lord Goodman.

The statutory instrument implements directives 92/100, 93/83 and 93/98. I shall concentrate on Directive 92/100 and deal with the rights of performers and with the possible impact on our free lending libraries.

There is no doubt that the present instrument is an improvement on the draft of February 1995, but I believe that it will still not implement the directive in its broadest basis and as was intended. British performers and their unions, the British Actors' Equity, the Northern Ireland Musicians' Association and the Musicians' Union, are all concerned that it will still leave UK performers in an inferior position to that of their counterparts in the European Union.

Paragraph(ii) of Article 8.2 of the directive, ensures that the remuneration is shared between the relevant performer and phonogram producers". The statutory instrument does not fully meet that intention nor the other part of the directive which refers to a, single equitable remuneration as between the producer [record company] and the performer". I suggest that, as presently worded, the instrument does not give the right to the performer to negotiate an equitable remuneration or to go to the copyright tribunal. I understand that UK performers will be the only ones covered by the directive who will be in this disadvantaged position simply because of the way the instrument is worded. Perhaps I can ask the Minister, on top of all the questions already put to him in this short debate, if it was the intention of the Government when they drafted the instrument to leave UK performers in this disadvantaged position. If that was their intention, why?

The provisions as worded will present real problems for UK performers in obtaining payments due to them from other countries. This is not new, but the directive provided the opportunity to rectify an unfair and one-sided anomaly which has put UK performers at a disadvantage compared to performers in other European countries.

Since 1961 there has been, under the Rome Convention, provision for performers to receive payment by legal right. Of all the EU countries, only the UK and Ireland have interpreted the convention as meaning that those rights are with record producers and not shared by performers.

The Minister may say that the legal right remains, and surely it does, but 30 years' experience has shown that it can only be realised through international agreements between performers' collecting societies operating on a compatible basis. The UK does not provide this compatible basis and the instrument before us does nothing to assist or to rectify the anomaly. I ask the Minister to comment on this view and to say why the Government have chosen yet again to allow UK performers to be at a disadvantage compared with their European counterparts whose governments have in all cases without exception recognised performers' rights and interpreted the law and indeed this directive accordingly. Indeed, in all other countries except Germany it appears in provisions that the sharing will be on a 50:50—in other words, equitable—basis. Indeed, in Germany the share of performers is higher than 50 per cent.

My second point relates to our free lending libraries. It is not incompatible with the remarks I made with regard to performers. Again, my main concern is with sound recordings but also video, CD-ROM, computer software and all the other new technology developments we are seeing. I gather that books are not affected by this instrument because the 1964 legislation, requiring libraries to lend books free, is backed up by the public lending rights scheme, which is funded by the Government and comes under the Department of National Heritage.

As we all know, today's libraries are not simply about books. They have not been so for a number of years. With the developing technologies and different forms of obtaining information, of learning and of entertainment, libraries have had to change to meet those developments and they have done so.

Libraries are in a different position from commercial interests. We all recognise that. I ask the Minister to clarify the position for libraries. I am sure that, like this side of the House, the Government would not wish to do anything which would damage the ability of libraries to serve their local communities or indeed to reduce access to members of the public who might otherwise not have any access at all to the kind of services that libraries provide. Have the Government considered that point? If so, what is the outcome of their consideration in regard to the impact of the instrument on libraries? Will the Minister also indicate whether the Government are considering an extension of the public lending rights scheme. If not, what practical solutions do they suggest to the position that may result from this instrument being put on the statute book?

This is a small instrument but it is extremely important; hence, the number of speakers in today's short debate. I know that the Minister has had many questions. I should be satisfied if the answers to some of my questions were given in writing if it is not possible to reply to all of them today, but certainly I should like to have answers.

5.2 p.m.

Baroness David

My Lords, these regulations, which implement EU Directive 92/100, directly affect public library lending. I want to draw the attention of your Lordships to the implications of that. My noble friend Lady Dean has said a certain amount about it already.

An exclusive right is to be given to authors, performers and producers of sound and video recordings and films to authorise or prohibit rental and lending of their programmes. That exclusive right may be waived in respect of lending by public libraries, provided that authors and performers obtain a remuneration. Member states are allowed to determine the remuneration in the light of their cultural objectives.

I want to explain how the regulations will affect public libraries. Lending books by public libraries will not be affected. In the UK, public libraries are obliged to lend books free to their users under the Public Libraries and Museums Act 1964, as my noble friend said. That is in England and Wales. There is similar legislation for Northern Ireland and Scotland. Authors are paid for the loan of their books by public libraries in the UK under the PLR scheme funded by the Government via the Department of National Heritage. However, public libraries would either be prevented from lending other materials, such as maps, printed music, sound and video recordings, CD-ROMs and computer software, etc., or authorised to lend them in return for a payment to the authors.

It appears that the Government do not intend to extend the PLR to those materials. Therefore, public libraries will have either to confine themselves to lending a more restricted range of materials, depriving the public of things that they clearly want, or to pay the authors/producers from an already diminishing budget remuneration for the loan of such items.

The new regulations will not affect the lending of materials by educational establishment and certain other libraries and archives, provided the lending service is not run for profit. The Minister explained that in his speech. The reason why public libraries lend sound and video recordings is that libraries exist to make information, ideas and works of imagination easily accessible to everyone. Lending books and other printed materials has been a traditional function of public libraries. Information is now published in a great variety of forms. Increasingly, some categories of material are published only in the newer media and in some cases a new medium complements the printed word. Some categories of library user—for example the visually impaired—find the new media much easier to use. Therefore, it is important that public libraries can stock and lend new forms of media as they develop, if they are to continue to give the good service which they already do to the public. Public libraries, in making them available, could also help develop the market for new media by acting as a showcase. They could also help people acquire the computer and searching skills necessary to access information—for example, information available in CD-ROM form.

In 1994-95 public libraries lent 555 million books and 33 million items of other media—sound and video recordings, etc. But 10 years ago public libraries lent approximately 644 million books and 15.5 million items of non-book media. So book lending has decreased while lending of other media has more than doubled.

The Library Association—I should perhaps declare an interest as a vice-president and long-time supporter—is concerned that the regulations will adversely affect public libraries. Some industries and some producers will mistakenly wish to prevent public libraries from lending their products; others will give permission to lend only on condition that they receive an additional remuneration; they may also wish to impose other restrictions such as a "holdback" or limits to the numbers of copies to be bought (a "holdback" would prevent libraries from displaying a new product until a specified time had elapsed after the release date); any additional remuneration will have to be borne out of already declining purchasing budgets; and the already complex procedures for negotiating licences and permissions will become more difficult and costly. The end result is likely to be fewer non-book media items available for loan through our public libraries.

Perhaps the Minister will answer one specific question. When a member of the public goes into a public library now and asks for the Oxford English Dictionary in order to look up a word, that is all right. Suppose that, under the new arrangements, rather than a book version of the Oxford English Dictionary, the data is on microfiche or CD-ROM. Will it be equally easy for the member of the public to get the information that is wanted in the new situation? I hope that the Minister will be able to give me an answer to that question.

The new regulations are very tightly drawn, so that it will be more difficult to make the necessary arrangements with the various firms and associations, and negotiations will be more difficult than they have been. The Library Association has been quite successful under the present arrangements in coming to agreements—for instance, for sound recording music with the British phonographic industry. These regulations may make it have to renegotiate and it may be quite difficult to come to arrangements as good as in the past.

So what can be done? We appreciate that there is very little likelihood of avoiding implementation of the EU directives. However, some clarification is needed from Ministers on how the legislation will work in practice and how remuneration to authors and performers will be paid for. For example, how feasible is it for every author on a CD-ROM to receive remuneration for public lending? How will public libraries find the money to pay the authors and producers?

The Library Association believes that the simplest solution would be for the Government to pay that remuneration under that existing Public Lending Right scheme. The administration is already in place and public libraries are used to being sampled for that purpose.

I hope the Minister understands the problems that public libraries and their users face and will help to find a solution. It seems to me that the PLR scheme, extended, would be the simplest way forward. I am a great supporter of public libraries. I am very anxious indeed that their lending should not be less and that the public should be able to get as much out of them in the future as they have done in the past. They give an enormous amount of pleasure to a very great many people. The education side of learning about new media will be very helpful too. I hope for a good response from the Minister.

5.10 p.m.

Baroness Hamwee

My Lords, I thank the Minister for explaining the regulations, or perhaps I should say decoding or decrypting them. The speeches this afternoon have shown that the regulations are not as esoteric or technical as they would appear. The contributions of the noble Baronesses, Lady Dean and Lady David, have shown that the regulations raise points of concern.

I declare an interest. I am a partner in a firm of solicitors which acts for many individuals and companies in most branches of the entertainment industry. Because we act on both sides, I have not been able to work out any financial interest in the outcome of the debate.

It is a pity that the regulations are in the form of a statutory instrument and cannot be amended. Even though the regulations amend primary legislation, it is something of an irony and a difficulty that in applying the three directives we do not have the flexibility in this House or in another place to have as wide-ranging a debate centering around particular proposals as we would were we dealing with that primary legislation on a more direct basis. It is appropriate that there has been long consultation with various bodies. The practitioners and those who will be directly affected should have the first and the longest say. However, the time that has been taken has led to a great degree of frustration that the directives have not yet been implemented. I sense that some of the alterations that have come out of the negotiations have tended to address the workability of technical issues rather than more substantive points.

Reference has already been made to the provisions for equitable remuneration. It is a pity after so long a time that there is not a legislative basis in this area. The workability of the market requires that one should know in advance how such a matter will operate or, at any rate, whether there will be equality of bargaining power. That point has already been referred to by the noble Baroness, Lady Dean. My experience from acting on both sides—acting for an artist or a writer and for a company contracting to acquire certain rights—is that the author or performer is generally the weaker party. That is often so even when the artist is a major artist. One feels within the legal profession that it would be quite useful if one could start negotiating contracts about two stages down the line from one's standard amendments to a standard contract. However, one has to go through the arguments every time.

I wish to take this opportunity to raise a number of specific points. I hope that these have already reached the Minister. They reached me very late in the day, so they reached the Minister even later. I apologise that I was not able to give him longer notice.

My first query concerns the redrafted Section 18 of the 1988 Act. Section 16 of that Act says that the owner of the copyright in a work has the exclusive rights to do certain acts in the United Kingdom. One of those acts is what is referred to in Section 18. Section 18 gives rise to the possibility that it would be an infringement of copyright in the UK to do something in the EEA. Is it really intended that that will have effect in relation to extraterritorial acts?

Secondly, the noble Lord, Lord Brain, referred to the effective date of Regulation 27(1). I should be grateful if the Minister could assist on whether, for instance, any equitable remuneration could arise for rental of a video in relation to a film where the contract was entered into before 19th November, 1992, the date in Regulation 27(1). That regulation does not expressly refer to Regulation 33. It uses the term: Except as otherwise expressly provided". It would be helpful to know whether Regulation 33 is intended to be construed as being an "express provision". It is clearly important to the financial interests of a large number of writers and performers to know how these two regulations interrelate.

On the question of satellite broadcasts, why are the regulations silent on a provision aiming at the protection of programmes containing encrypted signals? The specific rule adopted by the directive for encrypted signals reflects the inherent differences between broadcasting of unscrambled or clear signals and encrypted signals. I should be grateful if the Minister could assist on the question of the reception of signals broadcast in an unscrambled form which cannot be controlled once the uplink operation is done—the dispatch of the signal, if I may put it in more lay terms. One can only watch, as a member of the public, an encrypted signal once it has been decoded. The insertion of a specific rule for encrypted signals was the result of intensive lobbying to the European Commission. I should be glad to know why in this country we are dealing with the matter in a different fashion. Turning the broadcast into a communication to the public is quite different from the clear broadcasting of unscrambled signals.

I turn to the question of the exclusive right of authors to authorise communication to the public by satellite. It would be helpful to know whether the reference in Section 20 of the 1988 Act to the broadcasting of a work or its inclusion in a cable programme service covers the lack of provision for an author to have an exclusive right to authorise satellite broadcasts of his works. That is required in Article 2 of the directive but is not in the regulations.

In relation to satellites, the statutory instrument does not contain a provision ensuring that the acquisition of a satellite broadcasting right must be obtained "only by agreement". Those words appear in Article 3 of the directive. Can the Minister confirm that the current practice of voluntary contractual negotiations, as they have been described by me, between the holders of rights and the users will be continued?

I now turn to cable retransmission and the question of definition. I apologise to your Lordships for this series of technical questions, but I believe that this is the last opportunity that the industry will have to get answers to them on the record. Can the Minister explain why the formulation in the directive has not been adopted verbatim in the statutory instrument? The definition of cable retransmission contained in the statutory instrument is not as detailed and precise as in the directive, which refers to, simultaneous, unaltered and unabridged retransmission". As regards the acquisition of the cable retransmission rights, the directive requires member states to ensure that cable retransmission in the United Kingdom takes place, on the basis of individual or collective contractual agreements between the owners, neighbouring rights holders and cable operators. Can the Minister confirm that the current practice of voluntary or contractual acquisition of cable rights will continue to be applied?

I now come to the issue of mediation. Article 11 of the directive refers to mediation, but the statutory instrument contains no provision on the possibility of having recourse to mediation. Perhaps the Minister can explain that.

Finally, I turn to the prevention of abuses of the negotiating position. The directive requires member states to ensure that parties to a cable licence agreement will enter into and conduct negotiations regarding authorisation of the cable retransmission, "in good faith" and will not hinder negotiations without valid justification. Reading that, I realise what an interesting gap that shows in the differences between the legal system of this country and other countries within the EU as regards whether one looks at the spirit of a provision or its precise terms.

Can the Minister confirm whether, as in the past, the Monopolies and Mergers Commission will continue to have jurisdiction on refusals to grant licences on reasonable terms. Can he also confirm whether that jurisdiction will extend to abuses of the negotiating position on the part of the cable distributor? I apologise again for taking the time of the House, but I do not apologise very much because these matters still need to be clarified at this stage so it is right to take the time to do so.

5.23 p.m.

Lord Peston

My Lords, the directive and the statutory instrument cover many matters and I can comment on only a few of them. I have no problem there because other noble Lords have dealt with all the important matters better than I could possibly have done. The noble Lord, Lord Brain, said that it would have been better if we had had a Bill to deal with these matters, and I agree with him. Apart from anything else, the statutory instrument is longer than some Bills that I have dealt with. I know full well why the Minister would choose not to have a Bill, but a statutory instrument. However, that limits us as to how we can become involved in the detail. The noble Baroness, Lady Hamwee, said that the matter was not esoteric or technical. The topic is not, but the statutory instrument is extremely esoteric and technical. Just listening to the debate today I have my usual problem that I believe I understand what has been said but then someone says something and I realise that I do not understand a word of what we are talking about. However, I shall do the best I can.

I certainly believe that this is a real question and not an academic matter. For example, I take simply the row that has been going on between Thorn EMI and the British Academy of Songwriters, Composers and Authors on composers' royalties. We are dealing with very serious matters here. We are talking about vast sums of money and the very important rights that people have.

Having said that, although there are criticisms, I do not believe that we should ignore the fact that, central to the directive and the statutory instrument, is something which is very important to creators and performers; namely, that they are provided with new rights to earn additional revenue from renting and lending their works. Even though noble Lords have made points saying that that is not exactly the way they would have liked to see matters happen or there is this or that problem, one should not underestimate that ultimately this provision will lead to developments which will be beneficial to creators and performers.

My experience of this whole area of intellectual property is that it is fraught with difficulty. We have the authors, composers, performers, producers and lenders. They all need each other, but my experience when they get in touch with me is that they all hate each other as well. Each assumes that there is something hidden going on which is preventing them from getting their just deserts. The noble Baroness, Lady Hamwee, said that she appears as a lawyer for both sides. I hope that her firm has a lot of money. There are many sides and I hope that the noble Baroness appears as a lawyer for all of them. The fact is that one knows as an outsider that one cannot do right by all of them.

A further difficulty that I have is that, on the whole, those who have been in touch with me have been on the side of the performer and composer, and people like that. The one group which did not feel that there was any point in getting in touch with me were the producers and television companies, at least until today.

I wish to place on record the view that if one wishes to influence another, whether speaking from these Benches or from the Government Benches, writing to them with about an hour to spare is not exactly the way to get one's view included in whatever is going on—

Baroness Hamwee

My Lords, perhaps I may intervene. That includes receiving a letter just after one has finished one's speech.

Lord Peston

My Lords, I am indebted to the noble Baroness. I am as sympathetic to producers as I am towards anybody else. Certainly, as regards the television companies, I am also sympathetic to their concerns about unreasonably withholding consent and that kind of thing. If no one tells me about it, there is not much that I can do. There are other areas where occasionally I believe I know what I am talking about, but that does not happen very often in your Lordships' House. Most often I am in the hands of others, and I believe that many noble Lords are in that position. My main point is that ultimately this provision has to be a good thing for performers. One hopes that in practice it will be of benefit to them.

I now turn briefly to one or two points of detail, although I am sure that the Minister is perfectly well aware of them and can respond easily. I was surprised to learn that many composers have their own companies and that one effect of the directive and statutory instrument is that it may place a very considerable burden on such small businesses in order to make sure that they get their rights. They involve themselves with all sorts of monitoring procedures which are extremely costly. For example, a great deal of emphasis is placed on having access to the Copyright Tribunal. Clearly, people should have access to it, but my experience is that it is immensely expensive. A composer may just about know how to compose a piece of music—frequently not to my taste these days—but the idea that the composer may have any of the skills required to go to the Copyright Tribunal and argue about matters of remuneration and things of that nature without enormously expensive legal backup, is far fetched. I have been as supportive of the Government as one can be in terms of getting rid of unnecessary legislation; but I am worried that we are creating yet again a regulatory minefield here.

The next point is one to which noble Lords have already alluded. I understand the position of the department to be that the statutory instrument correctly implements the directive. The Minister has himself told me that, and I am sure that he will repeat it in a moment. As always, I look forward to what the Minister has to say. However, the view of my advisers is that even if in spirit it formally embodies the directive, it is still some distance away from doing what it ought to do. My noble friend Lady Dean points out that in some respects it appears to be less generous than the amount performers and others will get in the rest of the Community. I should like to hear the comments of the Minister on that point. The whole point of the directive in the first place was to produce a uniform situation throughout the Community in which everybody was treated in the same way. I should like to emphasise that point.

Many noble Lords have made the point—I simply go on record as saying that I am sympathetic to it—that at the root of the approach that we adopt here is the producer's right in this matter and that everything else stems from it. Critics outside and noble Lords have said that the lack of a right exercisable directly against the user means that, for example, the performer always has to go through the owner of the copyright in sound recording. One must place on record that that is not entirely satisfactory.

I do not want to prolong these matters, although I find all intellectual property matters fascinating. However, I believe that we should hear a little more from the Minister on the question of libraries. This matter was raised by my noble friend Lady David. I am very concerned about what is happening with the new technology in libraries generally. The example cited by my noble friend was a very good one. As I understand it, one can go to a library and look at the Oxford English Dictionary as a reference work and indeed any other reference work.

Many of us in our younger days, or even today—although noble Lords have access to the Library—relied on the reference sections of public libraries. They have been a boon to all kinds of people. It seems to me to be a matter of fundamental principle that where works of reference appear on CD-ROM access to them should remain unchanged, although their form may be different. Just as I can make a photocopy of a definition in the Oxford English Dictionary, as my noble friend implies, I ought to be able to print off exactly the same definition from CD-ROM without any infringement, or no greater infringement than would arise with a photocopy. One merely cites the Oxford English Dictionary as an example, but one has in mind the whole range of reference works on CD-ROM.

As I shall point out in the next debate in your Lordships' House, being a computer nut—perhaps that is a bit too strong—or someone who is obsessed with what can be done both with computers and on-line, I am extremely concerned about what is happening in this area both in relation to costs and the whole question of copyright works. The noble Lord will be happy to know that I shall save some of those remarks for the next debate. I believe that a good deal of reassurance is required that libraries will not be undermined by something that ought to be a boon rather than a threat to this kind of public service.

I feel that 10 minutes is enough. The Minister has a good number of questions to answer. There are many matters that one can take further but those will have to be saved for another day. I finish where I began. I hope that nothing that I have said will be interpreted as opposition to the appearance of definite lending and rental rights for all the relevant people. It is an important step and one that I strongly support.

5.34 p.m.

Lord Fraser of Carmyllie

My Lords, during the course of this debate on the regulations I have been asked a number of very detailed questions. I indicated at the outset that we had spent a considerable time on consultation on this matter. I appreciate that those who are concerned want as many answers as they can possibly get to the points that have been raised. I regret that I shall be unable to answer all of the questions, not only out of courtesy to those who speak in subsequent debates, but, more importantly, because such is the detail of the questions that I wish to be confident that every answer I give is accurate. While I shall attempt to answer a number of questions, as to those that I fail to answer I undertake to write to those concerned and make available the letters more widely so that any points of detail can be understood.

The noble Lord, Lord Brain, asked whether the regulations allowed authors and performers to achieve equitable remuneration for rental. We believe that they do. We appreciate that both authors and performers are concerned. They may have to undertake copyright tribunal proceedings in order to establish what is equitable. I do not believe that there can he a formula to determine what is equitable given the nature of the concept. That being so, it appears that ultimately there is no way to avoid resort to some legal mechanism. If it were not the tribunal it would have to be the courts. If there is a concern about cost, I believe it is a matter of common agreement that if tribunal costs are high the likelihood is that court costs will be even higher. We would like to see agreement reached wherever possible to minimise that cost.

I apologise if I appear to dart about a little but, as will be understood, this is a fairly complicated matter. The noble Baroness, Lady Dean, asked why Article 8.2 of the directive was not implemented so as to give performers rights exercisable against users and a more equal share of royalties with record producers. The regulations allow a fairly large degree of flexibility. We have attempted to utilise that flexibility to ensure that what is included fits into the pre-existing framework in the United Kingdom. For many years only record producers have had rights enabling them to obtain royalties from users. We do not consider it necessary or desirable from the point of view of users to disturb such long-standing arrangements. Granting performers rights exercisable against users would also mean the restructuring of producers' rights to ensure that there was only a single payment by users which was then shared between producers and performers and specified in the directive. We firmly believe, therefore, that the directive's requirement for performers to receive a share is best met by granting them the right to be equitably remunerated by producers.

As we understand it, where performers are granted a 50 per cent. share it is usually in respect of traditional forms of broadcasting and performance. The rights being granted to the United Kingdom will apply also to newer forms of exploitation that are now emerging but which have yet to become established in practice. We are reluctant to prescribe a share in these changing circumstances.

The noble Baroness further suggested that performers would be likely to have difficulty obtaining payments from other EU states unless their rights in the United Kingdom were similar to those elsewhere. The directive does not require full harmonisation in this area. The approach we have adopted should not affect the rights of UK performers under the treaty to claim payment in other EU states on the same basis as nationals of those states. Moreover, performers will have rights which are not transferable by them to producers and can be exercisable collectively against producers. That should assist in enabling them to reach reciprocal arrangements with collecting societies in other EU countries.

The noble Baronesses, Lady Dean and Lady David, asked why the regulations granted owners rights to control public library lending. It was a theme to which the noble Lord, Lord Peston, and the noble Baroness, Lady Hamwee, returned. I stress that book lending—clearly the most significant category—will essentially be unaffected since most books are covered by the public lending rights scheme which will remain in place. This gives authors only a right to payment for lending.

I am aware that libraries would prefer a similar approach to be taken for other kinds of works. However, we do not consider that that would give the owners of rights sufficient protection. It would not allow them to seek conditions aimed at preventing unauthorised copying, especially of material in electronic form. The noble Lord, Lord Brain, raised a concern about further copying in such circumstances.

In many respects the economic impact of lending is no different to that of commercial rental, which is subject to exclusive rights of control. Therefore, we believe that similar rights should apply in the lending field but with the important safeguard that we are retaining part of the order that lending be licensed since we are conscious that public libraries should not face unreasonable restrictions on lending. In addition, existing lending stocks will not be subject to the new rights of control.

The regulations do not alter the position in regard to the inspection of works in public libraries. The example that was put to me of on-the-spot reference is not lending within the meaning of the directives.

I was asked why the Government do not take more material into the public lending right scheme in order to reduce burdens on libraries. That is a matter for my colleagues in the Department of National Heritage. They have no current plans to extend the scheme to include new categories of material lent by public libraries. We are now obliged by the directive to introduce new lending rights for all kinds of works and we have taken the view that we should achieve that by establishing the new rights set out in the regulations.

The noble Lord, Lord Brain, inquired whether the intention of the new Section 93A is to ensure that a film or video producer is the first party responsible for payment of remuneration for rental. In fact it is Section 93B which specifies by whom the remuneration is payable, and the purpose of Section 93A is primarily to ensure that at the time the film was made the film or video producers had the necessary consents from the authors for rental of the work by introducing, as permitted by the directive, a legal presumption that unless there is an agreement to the contrary the rights of authors to authorise rental are transferred to the producer.

It is Section 93B which provides that in the first instance film producers will be responsible for that equitable remuneration of authors. It also provides through subsection (3) that if a film producer ceases to own the exclusive rental rights in the film, then his successor in title would be responsible for paying any outstanding remuneration. I hope the noble Lord will forgive me if I do not now answer some of his very erudite questions, but I will ensure that he receives answers.

The noble Baroness, Lady Hamwee, asked whether the wording of Section 18 is compatible with the right of the copyright owner in Section 16 to do certain exclusive acts in the United Kingdom, including the issue to the public of copies of work and whether therefore the reference is intended to have effect in relation to extraterritorial acts.

Section 18 defines the meaning of the right referred to in Section 16. It previously defined that right as being exhausted by the first issue anywhere in the world of copies to the public. Therefore, there is nothing new in Section 18 being affected by extra territorial acts. However, the regulations will now limit the effects to the benefit of copyright owners so that exhaustion only happens when the copy is first issued in the EEA rather than anywhere else in the world. It will be limited to act only when it occurs within the EEA rather than anywhere else in the world.

The noble Baroness also asked why the regulations do not make provision for encrypted programme-carrying signals as required by Article 1(2)(c) of the satellite and cable broadcasting directive. That is because Section 6(2) of the 1988 Act already contains the effect to which she refers. The noble Baroness also asked why the regulations do not contain an express provision on the author's exclusive rights to authorise the satellite transmission of his work and why they do not contain any provision ensuring that the acquisition of such right must be obtained only by agreement. The answer is the same. The regulations do not mention them because the Act already incorporates those points.

The noble Lord, Lord Brain, asked a detailed question about whether the tribunal would have the power to order the production or discovery of documents. I understand that the tribunal already has the power to make such an order requiring all parties to produce all documents in their possession or power which are called for. That is certain to extend to documents disclosing details of income. Had we introduced a separate requirement to provide information, it would not avoid the possible need for legal proceedings, since the requirement would be of no value without some means of redress in cases of failure to comply with it.

I am conscious that I have not answered all the questions asked of me but I hope that I have singled out the most important. I will ensure, having scrutinised the record, that any unanswered questions are addressed.

On Question, Motion agreed to.