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Lord McNally: My Lords, when the alliance approached me after I had expressed an interest, I asked it to talk to the Consumers' Association and other related bodies because, just as I indicated that the manufacturers have some concerns, I know that consumers also have some concerns. I am extremely anxious that all interested groups should talk to each other in order that we achieve the best possible legislation.

Baroness Dean of Thornton-le-Fylde: I thank the noble Lord for that intervention. To consider one side of the problem without taking into account the other side, that of the consumer, would certainly diminish the intentions of the Bill.

I thank him also for allowing me to go a little way down memory lane--more years than I care to share with noble Lords today. I spoke on this very issue as

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a young delegate to the Trades Union Congress. The issues, despite the adoption of new technology such as videos and CDs, are basically still the same. The impact of the problem is the same. Working in printing and packaging, we kept coming up against the problem of mimic packaging. It does not have to be even slightly different. The eye would not be able to detect the difference in normal use. We are talking about packaging on goods which the consumer believes are branded products. As we know, today the brand is everything in so many of the products that the consumer purchases. Therefore, such counterfeiting is theft, not only of intellectual property, but of jobs as well as of the business of companies.

I should be surprised if there is not one of us in the Chamber who has not at some point in his life bought something which he believed was the genuine product, but, when he really looked, found it was not. That is the consumer unwittingly buying something he believes is genuine, but which is not. The seller of the product is getting away. If one goes back to take up the issue, he has probably moved on. Therefore, I welcome the general aims of the Bill.

I welcome especially the shift in the burden of proof on licensing from the person who holds the original licence to the person who claims to have the licence and permission to use it. Clearly, for a member of the public, or indeed, the prosecuting authorities, it is nigh impossible to track down such people and deal with them in a local court. I welcome also the increased powers for trading standards officers. We all recognise the good work that trading standards officers, who are too often short of resources, do on the ground in local communities in tracking down such offences. The increase in their powers and the back-up penalties which courts may invoke on cases which they take to them are extremely welcome.

The intention in the Bill to give protection to whistleblowers is also extremely welcome. That borders on a quite nasty side to some of the places where such goods are sold, such as Hackney market. We have all read the article on it in the Evening Standard. However, while I recognise that the noble Lord acknowledged--I believe that he used the word "draconian"--that the powers may be interpreted as draconian, I am not sure about the new civil and criminal legal liabilities on landowners and local authorities which knowingly allow the sale of counterfeit and pirated goods on their land. I have reservations about the practicality of those provisions. The noble Lord, Lord McNally, mentioned the Women's Institute and the case of the local landowner who allows his land to be used for a car boot sale one Sunday morning. I have no problem with the intention, but I should want to consider the practicalities.

We have probably all read the article in the Evening Standard on 21st January. I live not far from the area in question. It sounds like a hive of criminal activity and yet innocent consumers are probably going there. For my part, I should be hard pushed to buy anything from a car boot sale except, perhaps, a second hand book. But consumers go there quite innocently. It is

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the local authority's responsibility to deal with such a situation, although I accept that local authorities are under great pressure.

I greatly welcome the Bill. It may not reach its ultimate conclusion, but I sincerely hope that the Government, if they do not pick up the Bill, will adopt its intention and many of its provisions which would assist consumer protection considerably. Those provisions would assist also the avoidance of straightforward theft of intellectual property and, I suggest on occasion, the theft of real jobs in this country.

Lord Lyell : My Lords, I am delighted to follow and support the noble Lord, Lord McNally, in his eloquent moving of the Bill. Perhaps I may say that flattery will get him everywhere. I am grateful for the offer of some branded, or perhaps not, liquor. However, as my journey will terminate on four wheels, perhaps tonight I may desist. I was also fascinated that the noble Lord desisted from referring to M Talleyrand until the clearing of the Chamber in the previous debate in which he took part. No doubt if he had mentioned him in another context, there could have been fun and games.

In my short contribution in support of the Bill, I have no particular interests to declare, apart perhaps from shares in companies that might be involved in products such as breakfast foods, pills or medicaments. Those particular forms of commerce have been eloquently mentioned by my noble friend Lord Jenkin of Roding. I was fascinated by his story of the "white whisky". His tale of distinguishing between an elephant and a horse might be relevant to drinkers of that brand. They are particularly relevant to some sportsmen who come north of the Border to my neck of the woods and have to be told, "No, no, that is a cow. You are supposed to be shooting deer today". We have a particular brand, especially when we get some of the more excitable sportsmen. I hope that that particular aspect will not be covered by the Bill.

On the other hand, my noble friend Lord Jenkin mentioned Clause 3. Both he and I, and I suspect other noble Lords, have some knowledge of one of the great industries of the United Kingdom; that is, pharmaceuticals. To that industry, intellectual property and, indeed, very often the protection of brands, is of particular and crucial importance. The Bill would cover many more of what are known as over-the-counter products. However, with those, too, there can be considerable danger for customers when they go into a shop, if they are not careful. There may, for instance, be a slight language difficulty if one is abroad. One may buy a product thinking it to be a particular brand of medicament and it is not. It may be far from that medicament in quality, effectiveness and other measures.

I am curious as regards Clause 9(2) of the Bill, which refers to Section 198 of the 1988 Act. I hope that the noble Lord, Lord McNally, or the Minister when he winds up the debate, will be able to reassure me that,

    "making, dealing with or using"

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particular articles would cover one aspect of purchases that I have made. I am afraid I am rather old-fashioned and collect cassettes, rather than CDs. I find them in reputable stores, labelled under so-called "collections" of melodies, songs or performances of various artists. Such items are for sale and bought in reputable stores. I hope that such collections meet the relevant measures relating to intellectual property and are not caught under the terms of theft, used so eloquently by the noble Baroness, Lady Dean. I would think that Section 198 of the 1988 Act would cover those products. However, possibly Clause 9(2) of the Bill would refine that a little.

I return to Clause 3. I hope that the noble Lord, Lord McNally, and the Minister will be able to reassure me that both the 1988 and 1994 Acts are being refined little by little to catch what has been referred to by every speaker in the debate as "passing-off". I believe it was my noble friend Lord Jenkin who pointed out that "passing-off" in English law is a common law offence. The noble Lord has law training; I have very little. It is often difficult and time-consuming to obtain a proper and effective judgment in a dispute over the "passing-off" of a particular brand of goods. I have received the same briefing material as my noble friend Lord Jenkin which cites a well-known case concerning a biscuit. The biscuit and its original counterpart looked roughly the same; indeed, they were rather closer than the horse and the elephant. There was justifiable confusion.

The noble Baroness referred to consumers. I, too, am one because I am probably among a minority of noble Lords who do the normal weekly shopping. When I am let loose in a supermarket there can occasionally be problems. If a special promotion is taking place, usually presented by an attractive young lady or a persuasive young man, I will pay close attention. On the other hand, I am not a Scot for nothing. I will certainly have a look at the promotion and accept the free tasting or something of that ilk. But I tend to return to the brand of product that I know. Of course, many of the special promotions one encounters in retail outlets are set up to promote the "own brand" of that retailer, even though one may well find that the branded goods are on special offer as well.

The noble Baroness, Lady Dean, and my noble friend Lord Jenkin referred to clarity of labelling. There is a limit to how closely one can examine the detail on every label--which is rather reminiscent of certain proceedings in your Lordships' House. One also has to consider those like myself with visual challenges. I am a little short-sighted. However, I am quite able to see exactly what is displayed on the shelf. But passing off a brand name with slightly altered spelling can often pose a problem. I have not been affected by this to any great degree, but my noble friend said that 17 per cent of consumers had within the past six months been so deceived.

I conclude by looking not at words and figures but at the issue of symbols and brand design. The noble Baroness, Lady Dean, and I have something in common. Noble Lords may be surprised to learn that

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both of us drive motor cars that were originally constructed in the great German city of Stuttgart. As I recall, her motor car symbol is that of a three-pointed star with a circle around it, while mine has the badge of the Dukes of Wu rttemberg. There is no doubt that right around the world, from the North Pole to the South Pole, the symbol of the three-pointed star with a circle around it is known and indicates a particular brand of goods; usually, but not exclusively, motor cars.

However, those noble Lords visiting the Alps or watching television at this time of year will on occasion see tough and wizened athletes hurtling most impressively down the slopes using a certain brand of skis. The tips of those skis also display a three-pointed star, but without the circle. It is an Austrian brand. As far as I am aware, no clash or difficulty has arisen over that symbol and there have been no disputes in the courts. I believe that the ski manufacturers have been using that symbol for the past 10 to 15 years. However, I am aware of that symbol and it brought home to me a difficult problem encountered by the manufacturers of popular branded sportswear. The symbol on a branded article of sportswear apparel is of particular importance for its manufacturers, but copies abound. I hope that in that area the Bill introduced by the noble Lord, Lord McNally, will be of assistance to British and other manufacturers. The counterfeiting of sports goods is probably one of the most widespread misdemeanours throughout the world.

Counterfeiting applies not only to luxury goods. I was interested to hear about T-shirts of a specific Italian brand. When the price of them was quoted to me I was tempted to ask whether it was in lira or roubles. I was advised sternly, "No, no". My Scottish blood came straight in to play and for me one T-shirt is as good as another, especially in the slanting rain of Angus. I shall therefore buy what I can see. But if other consumers want branded articles, they should be reassured that they represent the quality which they are entitled to expect.

With that in mind, perhaps I can refer back 23 years to the Patents Bill. It was an enormous Bill that completely re-wrote the law on patents. It was introduced by a Labour government. In the same year there was the Unfair Contract Terms Bill, which I believe also turned into an Act. That too had massive consequences for industry, trade and commerce. I hope that in this year 2000, the year of the millennium, the Bill of the noble Lord, Lord McNally, will have the success it deserves in helping to stamp out what the noble Baroness, Lady Dean, called plain "theft"; it is also greed. I wish the Bill every success.

5.11 p.m.

Lord Northbrook: My Lords, from these Benches we welcome the Copyright and Trade Marks Bill of the noble Lord, Lord McNally. It is a subject that should be of concern to all of us, whatever our political persuasion.

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The Alliance Against Counterfeiting and Piracy, a trade association whose recent formation should be welcomed, brings together for the first time all the major organisations concerned with defending intellectual property rights. It says that the misappropriation of intellectual property cost UK businesses almost £6.5 billion in 1999 and the Treasury almost £1 billion in tax revenues. To quote its spokesman, Chris Matheson:

    "Why should a business pay millions of pounds to research and develop and market a new product only to find that the expected profits are wiped out by counterfeiters, pirates or the producers of lookalike goods".

In addition, there are the proven links between counterfeiting, piracy and drug smuggling, money laundering, pornography and terrorism.

The Bill has four main aims. First, it seeks to close the legal loopholes in existing copyright legislation. Secondly, it tackles look-alike and copy-cat packaging. As mentioned by other speakers, that area was brought to my attention by the trade association, the British Brands Group, which tells me that such measures are already in existence in every mainland European country and countries with common law jurisdiction such as Australia and New Zealand. Such measures are long overdue in the UK.

Thirdly, the Bill introduces legislation making owners of markets or the land on which car boot sales are held responsible for goods sold at such events. Fourthly, it makes increased penalties available to the courts for offences committed, treating intellectual theft as seriously as other forms of theft. Fifthly, it provides for a shift in the burden of proof to the accused person who claims to possess a copyright licence to show that he or she indeed has a copyright licence, or approval of the owner, rather than the current situation where it is left to the owner to prove that the accused did not have permission to make or sell copies.

Sixthly, restrictions are placed on the manufacture or importation of technology intended solely for the circumvention of electronic copyright protection. Seventhly, new duties are placed on trading standards officers to enforce copyright. Finally, greater protection is given to whistleblowers who inform rights holders about illegal copying but who do not wish their names to be revealed to those people acting illegally.

I attended a most helpful briefing of the Alliance Against Counterfeiting and Piracy on the Bill earlier in the week. I too have learned about the problems of counterfeit goods being sold at car boot sales such as at Hackney Wick dog track where, as others have said, fake designer shirts, CDs, whisky, vodka, cigarettes and hard core pornography are all apparently being sold. According to the Evening Standard of 21st January, it appears that customers can buy almost anything illicit and no vendor seems the slightest bit concerned about being caught.

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Action must be taken. Because of lack of money Hackney council will prosecute only the manufacturers of such goods, not the sellers. The director of regulatory services there admitted in the article that he did not have the resources to tackle the problem of the sale of counterfeit goods. This Bill will, I hope, change the situation.

First, Clause 1, I believe, needs careful attention. The extra onus put on the landowner or the person who holds the sale is a concern to us. We would not wish a genuine one-off car boot sale to be overburdened by bureaucracy; on the other hand we wish to tighten up regular sales such as that at Hackney Wick. I hope that the example of a raid on a Nottingham car boot sale last week will be followed by other authorities. I am assured by the alliance that the offence will be committed only by a person who knowingly allows counterfeit goods to be sold. But perhaps there should be a system of warnings before the offence is deemed to be committed.

Secondly, as I said at last week's alliance presentation, I believe that there should be a tightening up of the law on car boot sales in addition to what is currently in the Bill. Councils should be notified of the location, stallholders and the times of sales and should have to grant a licence before allowing them to go ahead. This would, I hope, have the advantage of scaring off some of the more dubious operators of market stalls altogether while still allowing bona fide ones to operate.

Thirdly, as a possible addition to the Bill, I am not sure that the Internet is adequately covered. This is obviously an international issue. I await the EC Green Paper on counterfeiting and piracy in the single market with interest and also the draft copyright and e-commerce directives which will be important in providing an appropriate legal framework in Europe. However, international action is also needed, as mentioned by my noble friend Lord Jenkin in connection with the Stockholm and Marrakech conventions.

I believe that this Private Member's Bill is necessary. The Government, although promising action, have been slow to put it into practice. For instance, while Kim Howells, the consumer affairs Minister, told a conference on copyright and piracy in November that he expected to identify areas where legislation could help clamp down on a problem that damaged business and consumers and a consultation paper has been produced by the Patent Office, no firm plans for government legislation have, or look likely, to emerge. Therefore I support the decision of the noble Lord, Lord McNally, to press ahead with this Private Member's Bill.

Can the Minister say what action the Government propose to take and what is the timetable after the deadline for comment on the consultation paper has expired on 3rd April? Does he support the arguments made in this speech, many of which have been included in the Bill? Do the Government have plans to introduce legislation themselves, and when? Could

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tougher sentencing for counterfeiters be added to the Powers of Criminal Courts (Sentencing) Bill? I await the Minister's response with interest.

5.20 p.m.

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord McNally, said that my response would be a "dead bat". I have searched my speech and I cannot find any reference to bald, mouse-like, nocturnal mammals of the genus Chiroptera, so I do not know what he is talking about.

I have listened to the debate about the noble Lord's Bill with interest. Counterfeiting and piracy are, of course, seen by the Government as very serious issues requiring effective solutions to reduce the incidence of this criminal activity. The Government believe that the levels of these crimes are lower than in many other countries in the world, but we are not complacent and we accept that further improvements are needed, even in the United Kingdom.

Thanks to the alliance which is behind this Bill, I have had the opportunity to read its briefing and to read the Evening Standard article, although, unfortunately, I was on duty and unable to attend its meeting earlier this week. I should like to elaborate on some of the initiatives that the Government are currently undertaking that have direct relevance to the topic that the noble Lord has highlighted with this Bill.

Possible improvements to the criminal provisions in intellectual property law are currently the subject of a consultation paper that was issued last month, which has been referred to in the debate. The paper recognises the desirability of more harmonisation and rationalisation between the different areas of intellectual property law--trade marks on the one hand, copyright and related laws on the other hand. Areas explored in the paper are the level of penalties for criminal offences, to which the noble Lord, Lord Northbrook, referred, police powers of search and seizure and the provisions allowing forfeiture of infringing goods.

These are all areas where the Government feel that changes could be justified, although of course final decisions will not be taken until after the end of the consultation period on 3rd April. The timetable for the consideration of the consultation is not yet established. Indeed, it could not be until we have seen the volume and quality of the responses. I can confirm that the contributions to this debate will be valued as part of the response to the consultation process.

Another initiative is the setting up of a new forum, the counterfeiting and piracy forum. This forum brings together interests from a number of areas to sit with government representatives to consider how to deliver more effective enforcement against intellectual property crime and perhaps eventually extend any successful outcomes beyond the UK. Industry--and I believe the alliance--will be represented on this forum, as will be public sector enforcers, prosecutors, retailers, consumers, Internet service providers and so on. This wide cross-section of interests is being brought together not only to improve actual

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enforcement against counterfeiters and pirates by greater co-operation and co-ordination wherever possible but also more indirectly by looking at how consumers can perhaps be persuaded not to buy fake goods in the first place.

The consumer angle is one that has already received publicity by government sponsorship of a seminar last November, which again has been referred to, and participation in road shows in December to highlight both the short and long-term issues for consumers where they purchase fake goods. More road shows are planned in May.

Consumers can be directly and immediately affected by the deceptive practices of those who sell fakes where such goods are of poor quality or do not work or, more seriously, where they are dangerous. Counterfeiters may be involved in organised crime, which consumers purchasing their goods appear unwittingly to support. Other issues for us all are the reduction in employment opportunities in legitimate businesses which suffer losses, less investment in future creativity and the development of new products and losses to the Exchequer.

While improving consumer education about intellectual property crime will be taken forward in the forum, there are of course wider education and awareness issues that will be highlighted in the report of the Intellectual Property Group, a sub-group of the Government's Creative Industries Task Force, that will be published later this month.

There is also much happening at the international level relevant to intellectual property crime, and the Government are generally supportive of these activities. We are all awaiting the follow-up to the European Commission's Green Paper on counterfeiting and piracy in the single market and we are hoping to support co-operative work in the G8 forum, among other things.

In response to the noble Lord, Lord McNally, I should say that we are not waiting for European legislation to do things in the United Kingdom, but there are certain aspects of the Bill that are linked to European Union legislation, for example, offences relating to circumvention devices, which should sensibly await implementation of the legislation.

Before I leave the international dimension, perhaps I may respond to the noble Lord, Lord Jenkin. We believe that the law on intellectual property in the United Kingdom is compatible with all the international conventions to which we are signatories. This includes the TRIPS agreement, the agreement on trade related aspects of intellectual property rights, which itself incorporates Article 10 bis of the Paris Convention. The United Kingdom law has been scrutinised by that council and was not found to be deficient. Of course we also encourage and expect developing countries to meet their obligations under

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TRIPS in respect of measures to deal with counterfeiting and protection against unfair competition, in addition to other areas.

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