Government review urges intellectual property law reform

Comment from Intellectual Property specialist Marks & Clerk on the Hargreaves Review of Intellectual Property Law

The Hargreaves Review of UK Intellectual Property (IP) law has been published today, recommending various reforms to the country's current copyright and patent regimes. The review initiated by the Prime Minister in November 2010 was tasked with examining whether current IP laws are still fit for the purpose of promoting innovation and growth in the UK economy. At the time, the Prime Minister referred to Google's pronouncement that they could never have started their company in Britain due to the relative inflexibility of UK copyright law.

Broadly speaking, the review concludes that our current IP laws with a particular focus on copyright have become counter-productive to innovation and business in a digital age in which copying of text, images, and data is both routine and essential to digital communications. The review recommends a raft of reforms to copyright law, both through maximising exceptions to European law on the national level and working at a European level to reform European law. The review also singles out aspects of patent law for criticism, and recommends that efforts to spearhead the creation of a unified European patent system should be a priority for the British Government.

Simon Mounteney, Partner at Marks & Clerk, comments:

"The aims of review are laudable and it rightly identifies some of the pressing problems with our current IP regime. 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. However, the implementation of many of its proposed solutions may prove extremely challenging given our position.

"Britain's IP laws are so dependent on myriad international and European treaties that unilateral reform of our copyright and patent systems is impossible to achieve. Real reform will need to be pursued at a European or international level, and many of the proposed solutions will need significant attention to detail in order to become viable."

"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 European Union ruled decisively against a unified patent litigation system just two months ago.

"Likewise, the abolition of so-called 'patent thickets' will be a Herculean task. The involved nature of patents which cover not only free-standing inventions, but also developments of previous inventions will ensure the thinning out of the current stock of patents is a prolonged and intricate process.

"As the report suggests, the Government must 'take a leading role' in these areas, rather than doing anything unilaterally."

At a specific policy level, the review makes a number of recommendations. These include the creation of a Digital Copyright Exchange to make copyright licensing simpler and less burdensome, legislation to enable the licensing of orphan works, and the introduction of exceptions to copyrights that would allow the transfer of data between formats (e.g. copying a CD to a hard drive), as well as library archiving and data-mining for scientific research.

On the patent side, the review aside from calling for creation of a unified European patent system calls for patent fees to be reformed so as to disincentivise the creation of patent 'thickets', where inventions are protected by multiple layers of patents. Special provisions for SMEs' small claims are also proposed, coupled with calls for greater access to IP advice for small businesses.

Gregor Grant, Partner at Marks & Clerk Solicitors, comments:

"Copyright licensing is a minefield.  A single work can have several rights owners, each owning different slices of the pie.  The digital revolution has made it yet more difficult for anyone who wants to broadcast - or even play - works such as music.  The problem is self-evident; the solution is not. The report identifies and analyses the problem.  It points a finger in the direction of a solution, which is a centralised digital registry, allowing people to use copyrighted works for a fee - a bit like a scaled-up version of the Performing Rights Society but not limited to music alone.  But it does not hand out a packaged solution.   These days, no national government can hope to do anything significant with copyright law unilaterally.  There are simply too many international conventions, plus the fact that much of European copyright law has to adhere to a common format.

"The more practical suggestions offered by the report such as the maximization of our use of the exceptions of EU law to permit format shifting and data-mining for scientific research are potentially helpful, but these are rather minor reforms and do nothing to address some of the more persistent problems inherent in the current system.

"All this review can hope to achieve is highlight the problem, the importance of a solution, and offer encouragement to government to invest time and energy into taking a lead.  Global copyright licensing is big business - 600 billion a year at the last count, which is around five per cent of all world trade.  The UK is in a good position to take a lead - digital creative works and licensing are our third largest export sector."

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