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Intellectual Property Bill – Bill amended in Public Bill Committee

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Parliamentary copyright images are reproduced with the permission of Parliament

Parliamentary copyright images are reproduced with the permission of Parliament

Last week saw the Committee stage of the Intellectual Property Bill in the House of Commons. A number of transcripts and other documents related to the Committee stage have popped up over the last few days and these are noted below. Of particular interest is this document which helpfully shows the amendments made during Committee in Track Changes format.

It is also interesting to note that four written submissions were received from outside bodies. These submissions were circulated to the MPs appointed to examine the Bill during Committee stage. Submissions were received from: National Union of Journalists (in relation to creators’ rights in the Bill); Universities UK (in relation to Clause 20: Freedom of Information: exemption for research); Dr Dimitris Xenos (in relation to the Unified Patent Court); and Jane Lambert (in relation to Clause 13).

Clause 13 was highlighted by the Committee as one of the more contentious areas of the Bill and virtually got a whole sitting of its own (which is covered in the following transcript). The state of Clause 13 as it exits the Committee stage is reproduced below along with an observation from the discussions in Committee.

Clause 13 (as amended in Committee stage)

(1) A person commits an offence if—
(a) in the course of a business, the person intentionally copies a registered design so as to make a product exactly or substantially to that design, and product
(i) exactly to that design, or
(ii) with features that differ only in immaterial details from that design, and
(b) the person does so—
(i) knowing, or having reason to believe, that the design is a registered design, and
(ii) without the consent of the registered proprietor of the design.

(2) Subsection (3) applies in relation to a product where a registered design has been intentionally copied so as to make the product exactly or substantially to the design.product
(a) exactly to the design, or 
(b) with features that differ only in immaterial details from the design.

(3) A person commits an offence if—
(a) in the course of a business, the person offers, puts on the market, imports, exports or uses the product, or stocks it for one or more of those purposes,
(b) the person does so without the consent of the registered proprietor of the design, and
(c) the person does so knowing, or having reason to believe, that—
(i) a design has been intentionally copied without the consent of the registered proprietor so as to make the product exactly to the design or substantially to with features that differ only in immaterial details from the design, and
(ii) the design is a registered design.

(2) “Relevant product” means a product which is made exactly to a registered design, or substantially to with features that differ only in immaterial details from a registered design design, by copying that designdesign intentionally.
(3) “Relevant article” means an article which is specifically designed or adapted for making copies of a registered designdesign intentionally.

Iain Wright (Hartlepool)(Lab) raised a question during the 3rd sitting about the effect that Clause 13 may have had on shops such as Carphone Warehouse while the Apple v Samsung case was running in the UK courts. In particular, he raised the following issue:

To my mind, that means that the directors of Carphone Warehouse and other similar retailers will be liable for criminal sanctions. Surely that will prevent competition and consumer choice. Apple could have sued Samsung and then put pressure on retailers by saying, “Look, a court case is going on in which criminal sanctions and imprisonment of up to 10 years apply, so stop stocking Samsung products.”

In reply, David Willetts (Havant)(Con)(Minister for Universities and Science) stated that the “the use of the word “intentional” is a recognised way of handling the challenge of being absolutely clear that the action has to be intentional.” and followed this with the statement that:

Our view is that, if a company uses a product that is an intentional copy of a registered design, knows it is doing so and makes a profit into the bargain, it is right that it should be caught by the new offence. That is what we are dealing with.

So it would appear from Mr Willetts comments above that Clause 13 is not regarded as being an issue for shops as long as they had no intention to use (in this case sell) a product that is a copy of a registered design. However, that line of argument was, to my mind, put in some doubt during a later exchange in which Mr Willetts used the example of a coffee shop selling coffee made by a coffee machine that is an illegitimate copy of a genuine producer’s machine to explain why the Government preferred the wording “uses” to “sells”. In particular he said:

Imagine someone is running a successful and profitable coffee shop using a coffee machine that they know is a copy of a genuine producer’s machine. They bought a cheapo copy of a serious coffee machine at a market and are using it as part of their business. They are selling not the coffee machine but coffee, and are knowingly using as part of the process of making that coffee a piece of equipment that is an illegitimate copy.

We think the act of using a product like that should be caught within the framework.

What got my wondering here is how a national firm, for example a national chain of shops selling telecommunication devices, can run the argument that they did not know they were selling products that intentionally copied a registered design but a (presumably independent) coffee shop knows a coffee machine that they’ve bought is an illegitimate copy. Why can’t the coffee shop in this example run the argument that they did not know that the machine was an intentional copy of a registered design? And, what does this mean as far as possible defences along these lines are concerned?

The next stage for the Intellectual Property Bill is the Report stage where MPs will have an opportunity on the floor of the House to consider further amendments. Given that some of the amendments proposed in Committee stage were withdrawn to avoid delays and it was suggested that issues would be revisited at a later stage, it seems likely that there are further discussions to come on parts of the Bill.

Links to documents

Mark Richardson 4 February 2014

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