In-depth: Hargreaves and the fight to protect IP

Last month Professor Ian Hargreaves published his independent review of Intellectual Property and Growth. Linda Endersby looks at the recommendations and the reactions of the channel.

Last month Professor Ian Hargreaves published his independent review of Intellectual Property and Growth. Linda Endersby looks at the recommendations and the reactions of the channel.

Overview of the report aims
As Professor Hargreaves says in the foreword to his report, "When the Prime Minister commissioned the review in November 2010 he did so in terms which some considered provocative. The review was needed, the PM said, because of the risk that the current intellectual property framework might not be sufficiently well designed to promote innovation and growth in the UK economy."

Hargreaves goes on to pose the question: "Could it be true that laws designed more than three centuries ago with the express purpose of creating economic incentives for innovation by protecting creators rights are today obstructing innovation and economic growth? "

Report Recommendations
The answer the report gives is "yes". The review finds that the UK's intellectual property framework is not fully fit for purpose, particularly in regard to copyright. Medical research, the copying, essential to many industries, and the service economies use of the internet are three emerging business areas which suffer as a result.

However, the review concludes that changes must be made which do not damage the creative industries, especially as they develop towards the digital market and effective use of copyright must support rather than damage this area of growth.

The report gives 10 recommendations, based on evidence and submissions on how the balance can be achieved and strongly advises the government to make the resulting policies also based on evidence rather than lobbying, and to be adaptable to change as the commercial world continues to develop in the digital age.

Summary of Recommendations

Evidence. Government should ensure development of IP System is driven as far as possible by objective evidence. Policy should balance measurable economic objectives against social goals and potential benefits for rights holders against impacts on consumers and other interests.

International Priorities. The UK should pursue its international interests in IP, particularly with emerging economies. It should attach immediate priority to achieving a unifids EU patent court and system. UK should work to make Patent Co-operation Treaty a more effective vehicle for international patent application processing.

Copyright Licensing. UK should establish a cross sectional Digital Copyright Exchange with a senior figure to oversee design and implementation by 2012, with rights holders and others taking part. UK should support moves by European Commission to establish framework for cross border copyright licensing with clear benefits to UK as major exporter of copyright works

Orphan Works. Government should legislate to enable licensing of orphan works establishing extended collective licensing for mass licensing of orphan works and a clearance procedure for use of individual works. A work should only be treated as orphan if not found in Digital Copyright Exchange databases.

Limits to copyright. Government should resist over-regulation of activities that do not prejudice the central objective of copyright (provision of incentives to creators). They should deliver copyright exceptions at national level and promote at EU level exceptions to both support text and data analytics, and adaptability to new technologies. These and other copyright exceptions should be protected from override by contract

Patent thickets and other obstructions to innovate. Government should promote international efforts to cut backlogs and manage boom in applications by extending work sharing with other countries patent offices. They should also ensure patents are not extended into other sectors which they do not currently cover without clear evidence of benefit and investigate ways of limiting adverse consequences of patent thickets by establishing a patent fee structure set by reference to innovation and growth goals.

The design industry. In the next 12 months the IPO should conduct an evidence based assessment of the relationship between design rights and innovation with a view to establishing a firmer basis for evaluation policy at UK and EU level.

Enforcement of IP rights. The Government should pursue an integrated approach based on enforcement, education and measures to strengthen and grow legitimate markets in copyright and other IP protected fields. To support rights holders the Government should introduce a small claims track for low monetary value IP claims in Patents County Court.

Small firms access to IP advice. IPO should draw up plans to improve accessibility of the IP system to smaller companies who will benefit, involving access to lower cost providers of integrated IP legal and commercial advice.

An IP system responsive to change. IPO should be given necessary powers and mandate in law to ensure it focuses on central task of ensuring the UK's IP system promotes innovation and growth through efficient, contestable markets and be empowered to issue statutory opinions to help clarify copyright law. Towards improved transparency and adaptability, the IPO should be end of 2013 publish an assessment of the impact of those measures in this review accepted by the Government.

A cautious welcome
The general reaction to the report seems to be cautious welcome, mixed with some doubt as to the government adoption of the recommendation and further reservations about the plausibility of some proposals.

The Confederation of British Industry (CBI) policy director, Katja Hall praised the review saying: "This report contains some credible ideas for improving how the system works. Crucially, Hargreaves has rightly focused on promoting market access, and has rejected the wholesale adoption of fair use principles in the UK.

"The creation of a voluntary Digital Copyright Exchange is an innovative response to the challenges faced by our creative industries in the digital age. The Exchange should make it easier of businesses and individuals to legitimately access and pay for copyrighted material, while allowing rights owners to retain control of how their content is used and sold."

However Hall raised caution about some aspects of the Exchange; "However, robust copyright protection should be available to all, and preferential enforcement action for material registered on the Exchange must be avoided. Instead the Exchange should be a collaboration between content creators and the technology sector."

Hall also urged caution on copyright exceptions, which "need to be carefully considered before being adopted as Government policy. Once undone they could be very difficult to piece back together"

The Federation Against Software Theft (FAST) also welcome the intention of the Digital Exchange but voice doubts over the feasibility. FAST general counsel, Julian Heathcote Hobbins said: "The intention is noble, however it is yet to be seen  how this could work in practice or whether it is intended or even desirable for the software industry to participate"

As with the response from the CBI, Heathcote Hobbins also welcomes the reports views on the fair use doctrine. "Whilst there was a lot of speculation that a so called 'fair use' doctrine, as enshrined in US law, might be considered in the UK in order to be an enable of growth, we are pleased that this has not been recommended in the review as small software businesses simply would not have the funds to test any new 'fair use' doctrine."

Simon Mounteney, partner at Marks and Clerk, IP specialists, echoes the CBI and FAST in welcoming the ambitions of the review whist remaining prudent about the difficulties of execution.

"It is well documented that aspects of our IP laws are out of sync with the digital age, and that these problems can act as a barrier to innovation. The review provides a welcome signal that the Government is keen to address the situation," he said. "However, the implementation of many of its proposed solutions may prove extremely challenging given our position."

Mounteney continues: "The creation of a unified patent system should indeed be a priority, but this is, in fact, nothing new - stakeholders have been urging this for years and various attempts to implement a system have been made already. Although we have seen some progress in recent weeks, we still face considerable difficulties because the Court of Justice of the EU rules decisively against a unified patent litigation system just two months ago."

Mounteney also sites the abolition of 'patent thickets as a "herculean task" "The involved nature of patents which cover not only free-standing inventions, but also developments pf previous inventions will ensure thinning out of current stock of patents is a prolonged and intricate process"

Wholesale communications provider Entanet welcomes the recommendations and welcomes the suggestion that any policy changes should be based more closely on economic evidence.

Head of marketing Darren Farnden says " Its very early days and only time will tell if this promising review will have any real effect on the more disappointing Digital Economy Act, but Professor Hargreaves has at least gone some way to restoring the balance between protecting IP and considering consumers, a balance that was so badly damaged by the DEA.

"All we can do is hope that his mentality will rub off on the government and they will adopt this across the board," he adds.

While even Hargreaves himself seems aware of the hard work involved in executing the recommendations there seems no doubt that in a relatively short amount of time, the evidence collected and the findings published reflect the views of the community affected.

The first stage in realizing the goals set out is the response of the government, which is due out before the summer parliamentary recess, which starts on 27 July.

Only when that response is made public will the community begin to see if the hopes for much needed reform will be realised.

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