As part of a new Government-backed report, Professor Ian Hargreaves has made 10 major recommendations to free-up restrictive intellectual property and copyright laws that "obstruct innovation and economic growth in the UK". The 123-page report found that businesses aiming to take advantage of opportunities in areas such as the internet are being held back by [...]

As part of a new Government-backed report, Professor Ian Hargreaves has made 10 major recommendations to free-up restrictive intellectual property and copyright laws that "obstruct innovation and economic growth in the UK". The 123-page report found that businesses aiming to take advantage of opportunities in areas such as the internet are being held back by often archaic laws.
The Hargreaves report, the result of a five month review, recommends legalising the practice of copying music and films and seeks to relax the rules around 'transformative works' - reworkings of existing content. It also calls for a new agency to mediate between those wanting to license music, film and other digital content and rights owners.

The new body, to be run by rights holders, would be part of the solution to the long-running issue of IP rights relating to "orphan works" – where the original musicians, writers, heirs or other copyright owners cannot be traced. The report refers to this content as a "vast treasure trove" of work that is "effectively unavailable" for use.
"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?" said Hargreaves. "The short answer is: yes."
Hargreaves said that the single biggest failing in the current system relates to copyright – "once the exclusive concern of authors and their publishers" – for which the current laws are "falling behind what are needed".
"The UK cannot afford to let a legal framework designed around artists impede vigorous participation in these emerging business sectors," he said. "This does not mean, however, that we must put our hugely important creative industries at risk".
‘Anachronistic regulations’
The report called for the formation of a Digital Copyright Exchange by the end of 2012 to act as a "one-stop shop" to make it easier to get clearance for the use of copyrighted content.
"This will make it easier for rights owners, small and large, to sell licences for their work and for others to buy them," argues the report. "It will make market transactions faster, more automated and cheaper."
Other recommendations aim to clear up anachronistic regulations, including getting rid of the law that makes it illegal to download a CD on to an MP3 player, known as "format shifting".
The report also recommended that intellectual property laws around parody should be relaxed to allow comedians, broadcasters and other content creators more scope – ensuring that spoofs such as the YouTube hit ‘Newport State of Mind’ are no longer removed.
Action on IP laws is crucial
Commenting on the report, Emily Devlin, IP Lawyer at Osborne Clarke, said that the review is an exciting opportunity, but that there are many challenges to overcome before its recommendations can be implemented. Businesses will remain unconvinced until they see changes happening.
"In a digital economy IP is one of the most important assets a business can hold, so it's crucial that this time we get the rules right. While many of the report's recommendations appear to be a step in the right direction, businesses will be wary as many similar recommendations were made and not implemented in the discarded Gower review. If the government drags its feet on implementing the review's recommendations, companies could lose faith in the UK regime and look to relocate abroad.
"Ideas such as the Digital Rights Exchange, could be great for UK businesses but getting the Exchange off the ground will require the co-operation of many different parties, not least film companies, record labels and publishers. That's going to involve some complex negotiations.
"While fair use and format shifting make great headlines for consumers, businesses will be looking for signs that the political will is there to transform the recommendations into measures that will revolutionise their ability to launch and grow in the UK."
Steve Purdham at music streming service we7 added: “Anything that simplifies the licensing of copyright material will benefit the digital industries, especially in terms of innovation and growth, but it must equally protect the value of that copyright [and I particularly welcome the idea of cross border licensing]. Modifying copyright laws so that it reflects the real world again should be embraced. I like the common sense approach that Hargreaves has suggested, especially realising that a combination of education, markets and enforcement need to work together.
“I believe that as long as we can protect IP, the focus and delivery of simpler licensing can be the catalyst for significant innovation and growth and in turn create more value for copyright.”
A full list of the ten recommendations is published below:
Hargreaves Review Recommendations
1. Evidence. Government should ensure that development of the 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. These concerns will be of particular importance in assessing future claims to extend rights or in determining desirable limits to rights.
2. International priorities. The UK should resolutely pursue its international interests in IP, particularly with respect to emerging economies such as China and India, based upon positions grounded in economic evidence. It should attach the highest immediate priority to achieving a unified EU patent court and EU patent system, which promises significant economic benefits to UK business. The UK should work to make the Patent Cooperation Treaty a more effective vehicle for international processing of patent applications.
3. Copyright licensing. In order to boost UK firms’ access to transparent, contestable and global digital markets, the UK should establish a cross sectoral Digital Copyright Exchange. Government should appoint a senior figure to oversee its design and implementation by the end of 2012. A range of incentives and disincentives will be needed to encourage rights holders and others to take part. Governance should reflect the interests of participants, working to an agreed code of practice. The UK should support moves by the European Commission to establish a framework for cross border copyright licensing, with clear benefits to the UK as a major exporter of copyright works. Collecting societies should be required by law to adopt codes of practice, approved by the IPO and the UK competition authorities, to ensure that they operate in a way that is consistent with the further development of efficient, open markets.
4. Orphan works. The Government should legislate to enable licensing of orphan works. This should establish extended collective licensing for mass licensing of orphan works, and a clearance procedure for use of individual works. In both cases, a work should only be treated as an orphan if it cannot be found by search of the databases involved in the proposed Digital Copyright Exchange.
5. Limits to copyright. Government should firmly resist over-regulation of activities which do not prejudice the central objective of copyright, namely the provision of incentives to creators. Government should deliver copyright exceptions at national level to realise all the opportunities within the EU framework, including format shifting, parody, non-commercial research, and library archiving. The UK should also promote at EU level an exception to support text and data analytics. The UK should give a lead at EU level to develop a further copyright exception designed to build into the EU framework adaptability to new technologies. This would be designed to allow uses enabled by technology of works in ways which do not directly trade on the underlying creative and expressive purpose of the work. The Government should also legislate to ensure that these and other copyright exceptions are protected from override by contract.
6. Patent thickets and other obstructions to innovation. In order to limit the effects of these barriers to innovation, the Government should: take a leading role in promoting international efforts to cut backlogs and manage the boom in patent applications by further extending “work sharing” with patent offices in other countries; work to ensure patents are not extended into sectors, such as non-technical computer programs and business methods, which they do not currently cover, without clear evidence of benefit; investigate ways of limiting adverse consequences of patent thickets, including by working with international partners to establish a patent fee Review of Intellectual Property and Growth structure set by reference to innovation and growth goals rather than solely by reference to patent office running costs. The structure of patent renewal fees might be adjusted to encourage patentees to assess more carefully the value of maintaining lower value patents, so reducing the density of “patent thickets”.
7. The design industry. The role of IP in supporting this important branch of the creative economy has been neglected. 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 evaluating policy at the UK and European level. The assessment should include exploration with design interests of whether access to the proposed Digital Copyright Exchange would help creators protect and market their designs and help users better achieve legally compliant access to designs.
8. Enforcement of IP rights. The Government should pursue an integrated approach based upon enforcement, education and, crucially, measures to strengthen and grow legitimate markets in copyright and other IP protected fields. When the enforcement regime set out in the DEA becomes operational next year its impact should be carefully monitored and compared with experience in other countries, in order to provide the insight needed to adjust enforcement mechanisms as market conditions evolve. This is urgent and Ofcom should not wait until then to establish its benchmarks and begin building data on trends. In order to support copyright holders in enforcing their rights the Government should introduce a small claims track for low monetary value IP claims in the Patents County Court.
9. Small firm access to IP advice. The IPO should draw up plans to improve accessibility of the IP system to smaller companies who will benefit from it. This should involve access to lower cost providers of integrated IP legal and commercial advice.
10. An IP system responsive to change. The IPO should be given the necessary powers and mandate in law to ensure that it focuses on its central task of ensuring that the UK’s IP system promotes innovation and growth through efficient, contestable markets. It should be empowered to issue statutory opinions where these will help clarify copyright law. As an element of improved transparency and adaptability, Government should ensure that by the end of 2013, the IPO publishes an assessment of the impact of those measures advocated in this review which have been accepted by Government.
Read the full report here