APPENDIX: CORRESPONDENCE ON THE DIGITAL
Letter from the Chairman to the Rt Hon Lord Mandelson,
2 December 2009
The House of Lords Select Committee on the Constitution
is carrying out scrutiny of the Digital Economy Bill. The Committee
would like clarification of two aspects of this bill.
While the House of Lords Delegated Powers and Regulatory
Reform Committee is likely to examine the 'Henry VIII clauses'
in this Bill, where such clauses have raised broader constitutional
concerns the Constitution Committee has also taken a keen interest
in them. Clause 17 will insert a new section, s. 302A, into the
Copyright, Designs and Patents Act 1988. It will allow you as
the Secretary of State to amend very substantial proportions of
the United Kingdom's statutory law of copyright. There is a purposive
limitation to the power, in that the Secretary of State may exercise
the power only "where appropriate to do so having regard
to technological developments that have occurred or are likely
to occur". However, whether this is a limitation that will
lend itself to effective judicial supervision must, with great
respect, be doubted, on the basis that it is likely to be difficult
for a court to rule that a technological development is unlikely
to occur. The clause makes it clear that the power does not include
the power to create or modify a criminal offence, but it expressly
includes the power "to confer a power or right or impose
a duty on any person" and "to require a person to pay
Exercise of the power is subject to affirmative resolution
procedure, and must be preceded by consultation. Notwithstanding
these procedural safeguards (which the Committee welcomes), we
are concerned about the very considerable breadth and scope of
this power. In this respect it contrasts sharply with other Henry
VIII powers contained in the Bill, such as those in clauses 36
and 40. The former allows you as Secretary of State to amend s.
58 of the Broadcasting Act 1996 (concerning the renewal of radio
multiplex licences); the latter allows you as Secretary of State
to amend ss. 2A and 3 of the Video Recordings Act 1984 (concerning
the classification of video games). Both powers are limited, therefore,
to amending very particular provisions of the statute book. This
is not the case with regard to clause 17.
The Committee would like to know why you are of the
view that the power in clause 17 is required to be drawn so widely?
It would be helpful to the Committee, for example, if you could
give an indication of the sorts of provisions in Parts 1 and 7
of the Copyright, Designs and Patents Act 1988 which you envisage
may need to be amended under the clause 17 power. In our Report
on the Legislative and Regulatory Reform Bill, we noted that even
though Henry VIII clauses have become an established feature of
the law-making process, this does nothing to diminish the "constitutional
oddity of allowing the executive branch of government to set aside
or amend primary legislation".
In that Report, we concluded that where such powers are included
in legislation, they must be "clearly limited powers,
to be exercised for specific purposes". We are concerned
that this test is not satisfied by clause 17.
Additional powers are conferred on you as Secretary
of State by clause 42 of the Bill, which inserts four new sections,
ss. 116A-D, into the Copyright, Designs and Patents Act 1988.
Section 116A(1) is in the following terms: "The Secretary
of State may by regulations provide for authorising a licensing
body or other person to do, or to grant licences to do, acts in
relation to an orphan work which would otherwise require the consent
of the copyright owner." An orphan work, we understand, is
a work in relation to which no copyright owner can readily be
identified. The Bill does not define this term: rather, the legal
definition of the term is to be determined by regulations made
by you as Secretary of State (s. 116A(6)). The Committee's
view is that this is inappropriate, and that "orphan work"
should be defined in the Bill. Likewise the following matters
are left for you as Secretary of State and are not settled in
the Bill: the treatment of royalties, the deduction of administrative
costs, the period for which sums must be held for the copyright
owner, and the subsequent treatment of those sums. The Committee
notes that regulations made under this section are subject only
to negative resolution procedure; and that the provisions contain
no express duty on you as Secretary of State to consult appropriate
As with clause 17 it would greatly assist the Committee
if you could explain why you consider it to be constitutionally
appropriate for what appear to be such wide-ranging and open-ended
rule-making powers to be conferred on you as Secretary of State.
I look forward to a speedy response to this letter
so that the Committee can finish its scrutiny of this bill.
Response from the Rt Hon Lord Mandelson, 17 December
Thank you for your letter of 2 December 2009, regarding
measures included in the Digital Economy Bill. Let me deal with
the two main areas you raise in turn.
Clause 17 of the Digital Economy Bill provides a
restricted capability to amend parts of the Copyright Designs
and Patents Act 1988 ("CDPA") to deal with civil infringement
of copyright online. It is not a power to redefine what constitutes
copyright infringement for the purposes of Part 1 of the CDPA,
as some have suggested, as this would not be possible due to the
wording of the Clause. Technology in this area moves fast and
this Clause will enable Government to move quickly and flexibly
if we are persuaded that the existing legislation is not able
to provide adequate forms of redress for civil infringement of
copyright that takes place online.
First, you note the purposive limitation to the power.
The wording of the clause requires that the power may only be
- to prevent or reduce copyright infringement
on line if appropriate to do so having regard to technological
developments that have occurred or are likely to occur;
- to amend the CDPA in ways that do not create
or amend any criminal offences;
- following consultation; and
- by means of affirmative resolution procedure
in both Houses.
In addition to these limitations in the statute,
the power may only be used in a way that is consistent with Convention
Rights; with European Directives on subjects such as copyright
protection, Internet Service Provider liability and privacy, and
in a way that is consistent with principles of administrative
law. This means, for example, that despite what some commentators
have suggested, this power must be exercised consistently with
the limitations imposed on general or specific monitoring of internet
traffic in EU law.
The power will not create or modify a criminal offence,
meaning that the power may not be used to redefine what constitutes
an infringement of copyright for the purposes of section 107 of
You express concern that the Clause includes powers
to, "confer a right or impose a duty on any person,"
and, "to require a person to pay fees". These powers
could be used, for example, to impose a duty on OFCOM to carry
out educational functions in relation to how copyright is infringed.
The aim of such a programme would be to reduce copyright infringement.
The power to sub-delegate functions which you have highlighted
would be necessary for its introduction. The power to charge fees
would enable a body to whom such functions were delegated to charge
fees as required to cover its costs. Costs set above cost recovery
limits in Treasury guidance are likely to be a tax and so will
not be intra vires. Any exercise of these powers must also be
subject to the safeguards detailed above.
You ask specifically which provisions of the CDPA
may need to be amended by use of this power. We can envisage today
some potential areas where this power could be required, for example
to clarify or otherwise streamline the injunctive procedure available
under section 97A (this section may offer rights holders a course
of action, for example, against website hosted services being
used for copyright infringement, but has never to our knowledge
been used). However, the purpose of this Clause is to allow me
to respond quickly to threats which arise, or are shown to be
likely to arise in the future. Whilst we do not know for certain
what those threats are today, we need to be in a position to respond
effectively if they arise. That is why this power is drafted in
general terms, with appropriate safeguards, so that it remains
useful as technology and behaviours develop.
You ask why the term 'orphan works' is not defined
on the face of the Bill. The key factor in determining whether
a copyright work is orphan is the level of searching and publicity
used before it can be so classified. We recognise there is a danger
that use of the term "orphan work" in the Bill without
further clarification could lead to uncertainty, with a resulting
lack of understanding of what works could be licensed under the
provisions applying to orphan works. This is not in the interests
of copyright owners who may find their works wrongly classified
as orphan and may prejudice those licensing such works. The process
of diligent searching will be defined in secondary regulations,
by reference to guidance which has been developed in Europe and
elsewhere. Much of what defines an orphan work will, therefore,
depend on the search criteria and standards of due diligence that
apply when seeking out the owner of the work. Both of which may
change over time as new databases and searching methods are developed
and European or international standards are put in place. As a
result, any attempt to fix a definition of 'orphan work' in primary
legislation runs a risk of creating a class of works that are
orphan according to the Act, but not according to the search process
commonly used by those dealing with such works, or vice versa.
The Intellectual Property Office (IPO) has carried
out a preliminary consultation on licensing of orphan works with
the British Copyright Council. Details are available via the IPO
In line with BIS guidance on consultation the IPO will conduct
a full consultation prior to exercising any of its powers in relation
to orphan works. Any such consultation will extend to the licensing
of orphan works, including the definition and the appropriate
search criteria. We have publicly committed on the same IPO website,
and in discussions with interested parties, to finalising these
details in the regulations based on feedback with our stakeholders.
Likewise, issues such as the treatment of royalties,
the deduction of administration fees and related matters would
be the subject of a full consultation which would inform how these
matters are dealt with in the regulations. It would not be appropriate
to include this level of detail on the face of the Bill as discussions
with stakeholders have indicated that an orphan works solution
may involve different schemes for different types of orphan works
or orphan rights. For example, a library authorised to licence
the use of orphan works in its archives, may be authorised to
set administration costs differently from say a collecting society,
operating an orphan works scheme where the works are exploited
commercially. It is therefore more appropriate for such tethnica1details
to be included in regulations rather than on the face of a Bill.
I have already mentioned the consultation we intend
to undertake on orphan works. The full public consultation, which
will be widely publicised, will follow discussions with stakeholders
over the last few years. Although this is not expressly stated
on the face of the Bill, the IPO has publicly undertaken to consult,
as stated above.
Finally, on the question of a negative resolution
procedure, we consider that this is appropriate given the commitment
to consult fully with all interested parties before making the
4 Constitution Committee, 11th Report (2005-06), HL
194, para 34. Back