§ 4.1 p.m.
§ Lord Haskel rose to move, That the draft regulations laid before the House on 6th November be approved [12th Report from the Joint Committee.]
§ The noble Lord said: My Lords, these regulations implement the provisions of the directive 96/9EC of 1 1 th March 1996 on the legal protection of databases. The directive has to be implemented by 1st January 1998. The directive harmonises the laws of member states relating to the protection of copyright in databases. It also introduces a new right to prevent extraction and re-utilisation of the whole or a substantial part of the contents of a database. These rights apply to databases in both electronic and non-electronic (paper) form.
§ The regulations will therefore amend the Copyright, Designs and Patents Act 1988 to provide a new test for copyright in databases. Databases which, by reason of the selection or arrangement of their contents, constitute the author's own intellectual creation will be protected by copyright. The regulations also create the new free standing right to be known as database right.
§ Turning to the regulations themselves, Part I deals with certain introductory provisions of a largely formal nature. Part II amends and modifies Part I of the Copyright, Designs and Patents Act 1988 in order to align its provisions with those of the directive. In particular, the regulations modify the definition of "literary work" in Section 3 of the Act by including database as defined in the directive. They introduce a 793 new Section 3A so that a database is given copyright protection only where, by reason of the selection or arrangement of the contents, the database constitutes the author's own intellectual creation. They amend Section 29 so that research for a commercial purpose is no longer covered by an exception.
§ The regulations introduce new Section 50D, which permits any person having a right to use a database to do any acts that are necessary to access to and use of the contents without infringing copyright. For example, in order to search a database it may be necessary to download the whole or a substantial part of the database into the memory of a computer. This could otherwise count as an infringement of copyright in the database.
§ There is also a new Section 2968 which makes void any term in an agreement which seeks to prohibit or restrict the doing of any act permitted under the new Section 50. So, in the example I have just mentioned, the contract for use of the database could not be used so as to stop it being downloaded if that were necessary in order to search it.
§ Part III of the regulations provide for the new database right for a database in respect of which there has been a substantial investment. Like copyright, this is to be a property right.
§ The regulations provide that the person who takes the initiative and risk of investing is the maker of the database and is the first owner of database right.
§ The acts, which infringe database right, are the extraction or re-utilisation of all or a substantial part of the contents of a database. "Extraction" means transferring the contents to another medium; for example, taking something off-line and copying it into a computer memory or printing it out. Re-utilisation occurs when someone makes those contents available to the public; for example, by re-transmitting them to someone else or distributing copies.
§ The term of protection of database right is to be 15 years from the completion of a database. However, substantial changes to a database will give rise to a further term of protection.
§ Database right will apply only where the maker, or one of the makers, is a national or resident of the European economic area or a business established in the EEA. Lawful users of a database will be entitled to extract or re-utilise insubstantial parts of a database for any purpose. They will also be able to extract substantial parts for illustration for non-commercial teaching or research, subject to a test of fair dealing.
§ As with copyright, users will be entitled to make certain assumptions about whether database right applies; for example, that it was published in the year indicated, until the contrary is proved. Certain provisions of the Act will apply to database right as they apply to copyright—that is, those relating to dealings with rights and the rights and remedies of rights' owners and exclusive licensees. Examples of these are assignment and licensing of rights and bringing legal actions for infringement.794
§ The jurisdiction of the Copyright Tribunal will be extended to hear and determine proceedings relating to the licensing of database right; for example, where a dispute arises.
§ Part IV of the regulations make transitional provisions for existing databases and agreements relating to them.
§ All this may sound rather arcane, but this Instrument is important for our economy. There are believed to be about 350 firms in this sector, of which 30 are large suppliers; the rest are small and medium-sized enterprises. UK suppliers, however, have a share of the wider European Union market estimated at more than 50 per cent. So it is important.
§ At present, different standards of protection apply in different countries of the European Union. Databases which just consist of facts and figures, with no creative input, do not get copyright protection at all in some countries such as Germany or the Netherlands. One example could be the basic white pages telephone book.
§ So the Government's starting point for implementing the directive has been the existing copyright regime. We wanted to disturb the status quo as little as possible. The draft regulations reflect this approach. They aim to maintain, as far as possible, both the level of protection available for databases and a balance of rights and exceptions to rights.
§ The Government consulted widely on their proposals. Resulting from that consultation were three particular points of interest. They were, first, exceptions to copyright and the new sui generic right; secondly, the criterion for copyright protection based on the "author's own intellectual creation" and, thirdly, remedies for infringement of the new database right.
§ Not surprisingly, views between users and producers of databases were divided on exceptions which allow limited amounts of copying without infringing the rights. Many publishers wanted no exceptions, although some who are both producers and users of databases favoured exceptions. Librarians, academics and research-based industry argued that exceptions do not prejudice the economic interests of database makers and that without them untold damage would be done to education, research and scholarship.
§ The draft regulations continue the exceptions which currently operate in the copyright field. These relate, for example, to use for research, education and libraries. The copyright exceptions have been changed only where the directive specifically requires this. So the research exception no longer applies to research for commercial purposes—for example, the market testing of a new drug. This in fact returns to what was originally proposed in the Bill which led to the 1988 Act.
§ The exceptions applied to database right are those specifically permitted by the directive. The ones of most interest apply to illustration for non-commercial teaching and research. Teaching or research for commercial purposes do not fall within the exception—for example, a commercial training course might well not qualify for the exception.795
§ These exceptions are also subject to a general fair dealing test. This is a test which also applies to some copyright exceptions. It has been interpreted as restricting the amount of material which can be copied or used fairly so as not to damage the economic interests of rights owners—for example, a student might copy a couple of pages from a book which he might not otherwise buy without infringing copyright; but if his teacher were to copy the pages for the whole class, that would not count as fair dealing.
§ Another area on which many comments were received was the test for copyright in a database, based on the "author's own intellectual creation". Some felt that no amendment of the Copyright, Design and Patents Act 1988 was needed to introduce this test, and that the current test of "originality" for literary works was enough.
The Government do not share this view. The directive is clear. It requires copyright protection for databases,
which, by reason of selection or arrangement of their contents, constitute the author's own intellectual creation".
This is intended to exclude from copyright protection so-called "sweat of the brow" databases—that is, ones which involve time, money or effort but which are not sufficiently creative to justify copyright protection. These "sweat of the brow" databases will, however, be eligible for database right protection and, in practice, it is likely that many databases will continue to be protected by copyright, as well as by the new database right.
§ Views of respondents were also divided on whether infringement of the new database right should in certain cases be a criminal offence or subject only to civil remedies. Some wanted criminal offences but others thought that a new and untested right should not open up the risk of criminal prosecution, which could lead to fines or even imprisonment. The Government concluded that only civil remedies should apply. These would enable right holders to sue infringers in the civil courts in order to stop further infringement and to obtain damages in appropriate cases.
§ These regulations are introduced at a time of many changes. These initiatives affect the education, library and publishing sectors. It will be important to continue to monitor developments. To achieve that, my honourable friend the Minister of State at the Department of Trade and Industry, Mr. Ian McCartney, announced on 3rd December that the Government are proposing to establish a database market strategy group. This will monitor the impact of the regulations and undertake a strategic review of the way the market for databases is evolving and the implications of this for rights, exceptions and licensing arrangements. The Government intend to invite representatives of publishers, libraries and academic and research institutions to participate in the work of the group. I commend the regulations to the House.
§ Moved, That the draft regulations laid before the House on 6th November be approved [12th Report from the Joint Committee].—(Lord Haskel.)796
§ Lord Inglewood
My Lords, the regulation, which this secondary legislation is intended to implement in this country, was agreed by the previous government when in office. I support it. I underscore the comments of the noble Lord, Lord Haskel, about the importance of intellectual property. I congratulate the Government on their timing in leaving this to the last possible minute. I have heard of just-in-time delivery but this appears to be just-in-time legislation.
§ Baroness Nicholson of Winterbourne
My Lords, the Minister has given a most eloquent exposition of the importance of the statutory instrument. I declare an interest which is not commercial. I spent a decade in software development with International Computers and other companies. When I entered the other place I worked on the 1989 copyright Act to which the noble Lord referred. I did that in harmony and in co-operation with the British Computer Society's intellectual property committee. I then initiated the computer hacking legislation, co-sponsored the Access to Medical Information Bill and the Access to School Information Bill and brought forward my own Bill on employee information access. That brought about a small innovation replicated in the current regulations by the introduction not merely of electronically-based knowledge protection but, as the French put it, ou autres—not merely paper-based material, but anything else.
I wish to make two points. One is the difficulty faced by UK-based multinationals in implementing these regulations. The other is citizens' intellectual property ownership. Recently I wrote a piece on the latter in the book for UNESCO's director general, Federico Mayor, Liber Amicorum. With that in mind I believe that my principal difficulty in the next few minutes is to try to interest the noble Lords, the Whips on all three Front Benches, in the excitement of this particular bit of legislation. Between the lottery and other matters to do with the arts this vitally important piece of legislation does not appear to have created the enormous excitement that it should.
The regulations were signed before the Government were elected. In principle, they are good for business. For example, supermarkets can now identify each and every one of us and retain that knowledge through the bar code purchases that we make, targeting us in a most sophisticated way. The noble Lord is to set up a database market strategy group to look at the difficulties which the regulations will produce for some users. So far so good.
When I indicated my interest in this matter a few days ago companies and partnership as far apart as Masons, Clifford Chance, Reuters and many others came forward to say that they still had many concerns. This is an important piece of European Union legislation. It gives protection to valuable intellectual property assets. In that way it supports the creative economy. In broad brush terms, it is in line with the Berne Convention and with TRIPS, the Agreement on Trade Related Aspects of Intellectual Property.
797 Where are the conflicts? At this late stage I should like to refer to a few general matters. There is conflict between the UK and the EU on database protection. There is also conflict between the European Union and the rest of the world and, even more importantly, conflict between the private citizen and the public sector, particularly at the sharp edge of the lack of private citizens' rights in the United Kingdom.
Inside the regulations themselves, there are problems remaining between the copyright owner and the database creator; between the authors and the makers of the databases also. There may be one author, one maker, one copyright owner and one database creator, or there may be hundreds or thousands. As the Minister said, there is some interesting new input where originality is brought up against the new term of creative intellectual effort whereby originality refers to the use of skill, knowledge, mental labour, taste or judgment, and creative intellectual effort is seen as something else.
In the other place originality was referred to as the sweat of the brow. It is considerably more. In musical terms it reminds me of comparing J. S. Bach with his contemporary composers who recycled his contrapunctalism. One could say that he used the fugal structure to push out the boundaries of musical expression, whereas perhaps they used it as a convenient straitjacket. Possibly one could also refer to the political diaries of Members of Parliament and pastiches of those diaries when created in daily newspapers.
Originality in copyright law is important. The Minister stated that databases will receive database protection, even when they are somewhat basic, almost mechanically created originalities. The new proposals do not deem that to be as high an effort as one's own intellectual creation.
It has been said elsewhere that cost compliance is large. It is only £17.5 million. Considering that the database industry is 50 per cent. in the UK, it is, if one likes, an Anglophone creation, and we are discussing an industry whose business knowledge output alone has a turnover of £10 billion already. That is a relatively modest cost for enhancing an industry which is of such value to the UK and which has an exceptionally high growth rate.
Nevertheless we are in conflict with the Berne Convention on exceptions. There are no criminal penalties. I still ask, why not? We had that problem with the Copyright, Design and Patents Act 1988 which is why we had to bring forward the computer hacking legislation of 1990. We shall need criminal penalties in the end.
My principal problem is one of definition. What is a database? What is a file? In electronic terms, what is the difference between programme input, hardwired routines and software? How can we define the difference between text or program; between the database extract and a compilation? In other words, how can we quantify or cost the elements of value added to the text or to the data after the database itself has been created initially?
798 Today's database is an amorphous animal. It is changing continually. I shall refer to banking. I know that many noble Lords are in banking. We think of the SWIFT mechanism for transferring money around the world. We recall that these records for protection change continually throughout their global financial journey. It is surely difficult to define what a database is now.
Let us go out into the wider world. We live in an age where information is no longer scarce; where its value is no longer one of possession. We are moving away from the use of information as a possession to the use of information through management, through access, through alteration, as opposed to through knowledge control. For sovereignty, that great phrase used to justify exclusion from discussions in the EU by some parts of the political spectrum, depends not just on physical territory but on central control of information. I propose that that is now a relatively unattainable goal and that information flows have become geographically insensitive. I suggest that more and more they have also become process anonymous. When software compatibility became real we moved into a higher level of languages. For example, as regards input arrangements of data we can touch, speak, use keyboards, paper or other input mechanisms. That is why I believe that information flows have become not only geographically insensitive but also more and more process anonymous.
I suggest that these are seismic shifts which made the Copyright, Design and Patents Act 1988 out of date by the time it came into force in August 1989. I suggest that any new legislation on information flows must reflect those shifts. I put it to the Minister that this legislation does not. For example, the French anti-hacking legislation which came in before ours, in 1986, was so sophisticated in its terminology that it has not been able to be used once. It is too sophisticated; it was out of date by the time it reached the statute book.
In a global economy the intellectual property outreach is patchy at best: it is criminally subversive at second best: or unavailable in territorial legislation at worst. China, Taiwan and Japan show the attitude of different cultures to intellectual property. The European Union weaknesses are also reflected with the inability of the differing membership to enforce the different data protection directives and the copyright directives which already exist.
I suggest to the Minister that those points make the difficulties of implementation for multi-nationals large indeed. I wonder whether it is worth going ahead with this regulation at all. It also impacts negatively upon the weakness of the European Union scrutiny process and I beg the Minister to look at that at some point. There is a need for linkages between the Parliaments: the need for the House of Commons to make far greater efforts in terms of European Union draft directives, which is the moment when things can be altered.
Finally, I turn briefly to the question of the citizen. The directives' decompilation procedures were described in the 1992 regulations on computer programs as "finely balanced checks" and the manufacturers' software producers referred to "carefully balanced 799 compromise". The European Union has a number of member states which have different legislation from ours. They can implement the directives where we cannot because we miss personal privacy laws. I believe that that shows up most closely the importance of the database directive and its negative impact on individual citizens with regard to medical records. I suggest that we have a cross-over between the private sector and the public sector. Are the records of general practitioners. for example, in the public or private sector? When I asked that question in the other place I received an alarming and startling answer which I beg the new Government to consider. It is that the Secretary of State for Health owns all National Health Service records.
Therefore, I believe that we have a 15-year copyright over databases which is renewable without, so far as I can tell, a great deal of trouble. Furthermore, the content of those databases is owned by the owner of the database, the owner of the copyright or the creator of the database. That national content will include the National Health Service records of every National Health Service user in the United Kingdom. The same is true of hospital records and of other public service records.
I wish to put down a marker that the content of databases impacts upon the protection of the UK citizen who has no inherent right of privacy. Despite the suggestions in the excellent freedom of information White Paper and the draft directive on data protection, we do not yet give constitutional rights on privacy to citizens.
I feel deeply concerned that as we receive a rolling programme of draft directives and directives from the European Union on copyright and quasi-copyright issues, the individual citizen in the United Kingdom suffers an invasion of privacy which does not infringe in the same way on the rights of any other citizen in the European Union.
I know that the implementation of this directive is now inevitable. I ask the Minister to look at the timescale to see whether it is possible to persuade Brussels to think about a review. Finally, with that in mind, will the Minister put every effort into restarting the WIPO treaty negotiations on the global protection of databases and intellectual property. I know that the United States opposition, the "knowledge should be free" lobby, understandably but inappropriately stifled that creative protection. I remind noble Lords that even Mozart had to eat.
§ 4.30 p.m.
§ Lord Haskel
My Lords, I thank the noble Baroness for her response and welcome her comments. I feel rather like somebody who, after inquiring after somebody else's health, finds himself in a long discussion about the meaning of life and the universe when he really wanted to know whether the person's cold was a little bit better. However, the noble Baroness gave me notice of her questions and I am most grateful for that. I shall respond briefly to some of the points that she made.
The noble Baroness said that the definition of a database was out of date and no longer applied. The definition of a database is broad and flexible and 800 encompasses both static and dynamic databases. The definition of a database is that it is a collection of independent works, data or other materials which are arranged in a systematic or methodical way and are individually accessible. Any substantial change to the contents of that database resulting from the accumulation of successive additions, deletions or alterations, which would apply to the database being considered to be a substantial new investment, will then qualify as a new database resulting from the investment of its own term of protection.
The noble Baroness asked about further directives and our ability to negotiate those matters with the European Union. Yes, a proposal for a directive on copyright in the information society was adopted by the Commission on 10th December and will be issued in the new year. The Government intend to consult widely on the proposal and will take account of the views submitted to them in the forthcoming negotiations.
The UK, along with other member states, will be represented on the Council working group. We shall be an enthusiastic and active member. Of course, our representative will chair the meeting while we have the presidency. We shall have a further representative on the committee. Therefore, there is every opportunity to air our views. I am sure that the views of the noble Baroness will also be reflected in what we say.
The noble Baroness raised the question of ownership of records with particular reference to the National Health Service. Those individual records combine to form a database. There are really then two issues. The first is the ownership of the database itself. These regulations and the copyright legislation will apply.
Then there is the ownership of individual records. In most cases that does not matter because it is access which is important. That is a question of data protection. We already have the Data Protection Act. We shall add to the data protection of the individual and rights of access when we implement the data protection directive. That will provide yet another opportunity for noble Lords to debate the matter in the House and also to debate the whole question of human rights.
The noble Baroness asked whether there was any way in which the terms could be reviewed. The directive requires the Commission, not later than the end of the third year from 1st January 1998, and every three years thereafter, to submit to the European Parliament, the European Council and the Economic and Social Committee a report on the application of the directive. That exercise should ensure that the terms of the directive are revised if it is not working.
The regulations will bring real commercial benefits through encouraging the creation of new databases and expanding markets. They will also have wider benefits in the development of the information society which is so important to our economy.
§ On Question, Motion agreed to.