Tuesday, 9 August 2011

Government’s Response to Hargreaves Review of IP: a good start or more to be done?

Last week the Government released their formal response to the Hargreaves Review of Intellectual Property and Growth . The Response broadly accepts the recommendations made and outlines how the Government proposes to act on each recommendation. Having read the response and taken some time to digest its contents, my overall view is that this is a significant step towards a long overdue copyright reform. However, it is a very ambitious move by the Government, given the tight timescales which have been set to achieve the desired changes to the IP framework. The Government is committed to creating favourable conditions for the encouragement of innovation and growth, but are leaving many of the finer practical details to the wider UK public, most likely those with a vested interest such as consumers, creators and businesses.

So what does the Government actually propose to do? Here’s my brief critical take on what I think are the most ground-breaking of the Government’s plans for action in the areas of copyright:

  1. Evidence surrounding the economic issues of IP will be fundamental in shaping policy. Fairness and social impact will also be considered. This is absolutely essential; evidence should drive policy and it is imperative that evidence is high quality and carries no bias. The recognition that fairness and social impact also have a part to play widens the conversation to include moral rights for creators and any potential impact on consumers. Historically, copyright policy has been swayed by opinion and effective lobbying, but the proposals for policy changes will now be looking for hard evidence adhering to Intellectual Property Office (IPO) guidance which will be published later this year.

  2. The creation of a Digital Copyright Exchange or similar to enable rights clearance by facilitating copyright licensing. My speculation is that the Government envisages a type of portal incorporating databases of rights information which would allow an organisation or an individual to pick and choose the works they wanted to use and the way they wanted to use them. Similar to a Rights Direct model but on a much larger scale; perhaps a sort of shopping basket approach similar to that of Amazon when you buy multiple items from a range of different sellers. In theory, a great idea - a vast digital marketplace where licensing of works is quick and easy. However, it is not an ideal solution for those rights holders who don't store works in database form already, as uploading individual works into a suitable rights database with metadata and ownership records will take time, skill and effort. It will be interesting to see the development of this proposal. The requirements for the DCE are outlined as follows:

    a. It must be free to use
    b. It must attract a ‘critical mass’ of material that is available and readily licensable
    c. Prices to be set or negotiated with rights holders subject to controls on unfair competition
    d. Voluntary scheme, not compulsory
    e. Self-funding, running on licensing transactions

  3. Proposals for an orphan works scheme which will allow for both commercial and cultural uses of orphan works. As this topic is prevalent in Europe at the moment, it was always likely that the Government were going to take an active role in tackling orphan works. This will be a hotly contested area, particularly with regards to commercial use of orphan works, but the mention of diligent searches and market rates for the use of orphan works is a good start. The unspoken question though is always going to be: where does the licence fee go? Into the DCE? Perhaps one to muse... The proposals for extended collective licensing are more vague, however, leaving a very unclear picture as to how that aspect will function.

  4. Widen the exceptions to copyright within the existing EU framework, provided that harm to rights holders is minimal, EU law and international treaties are adhered to, and that restrictions removed by exceptions are not re-imposed by contract. The exceptions will allow for limited private copying, more materials available to copy under the proviso of non-commercial research, text and data mining, archiving and parody. This will be widely consulted on and the scope of the exceptions will be determined from sound evidence. The proposals to widen copyright exceptions to make use of all the exceptions listed in the EU Information Society Directive will immensely benefit education and research and it is very promising that they have been recognised in such a way.

  5. Develop a three-pronged attack comprising enforcement of IP rights, education of users, and appropriation of business models. The Government has outlined in its IP Crime Strategy that it is committed to tackling ‘piracy’ (one hopes with the talk of prosecution under the Copyright, Designs and Patents Act that this report is not referring to file-sharing but rather the more criminal acts of copyright infringement such as mass sale of pirate copies for commercial gain). With civil infringements, rights holders will still have to deal with those themselves, but they (and especially smaller businesses) will be better supported with the introduction of a small claims track in the Patent County Court for claims under £5000 (assuming the cost of introducing one is not prohibitive).For me, the most encouraging aspect of this section is the recognition that business models need to change and adapt to the digital age. As such, the Government has pledged to work with industry to support efforts to develop new legitimate digital markets. File-sharing as an issue is unlikely to disappear, but the availability of high quality desirable digital content at affordable prices in an easy-to-access format should at least provide an incentive to entice people to acquire it via legitimate means.

  6. IPO to deliver copyright opinions service to clarify the applicability of copyright law. This may not look like a significant point but it really is. This will give the IPO a role not dissimilar to the Information Commissioner's Office (ICO) in terms of delivering opinions on complex copyright interpretations, and the IPO will become more of a ‘go-to’ service for educators struggling to make judgment calls, particularly in relation to new technology. But more than this: the Government hints that a copyright opinions service may shape the future of copyright legislation, identifying areas of uncertainty and supplementing the judgements of the legal profession and academic community. On the one hand, I see a copyright opinions service being quite fruitful – it’s often useful to be able to go to a public sector body and ask for a definite opinion on a matter. But on the other hand, could this be seen as the more easy way: rather than calling for a large scale review of the Copyright Act, this approach is quite piecemeal, which historically has not benefited copyright law. And how will the IPO interpret the law? Narrowly, as by the precedents set in the ECJ and other significant courts? Or more liberally, applying UK case law and interpretations? One major difference between the ICO and this newly appointed function of the IPO is that Freedom of Information legislation is home-grown and largely unaffected by EU case law, whereas copyright law is hugely influenced by the EU. It remains to be seen whether this will be a viable service or not, particularly where it relates to commercial enterprise.

    A longer post than I anticipated, and much more that could be said, but overall it is a good start. Those more cynical than I question whether this will go the same way as the Gowers Review and come to nothing despite the Government’s best intentions. But I remain positive; I think for once a lot of sensible truths based on evidence have been declared and at this difficult point in the economy businesses and the creative industries should be working hard to implement innovative schemes to enable their business to flourish in the digital age. Organised criminal piracy should be countered and prevented, and the Government should take a serious look at the support it needs to offer to creative industries in the form of tax breaks and advice. Education in particular should be able to thrive without fear of infringement of copyright, and the law needs to be brought up to date with digital technology and legitimise activities (i.e. copying a CD to a cassette tape) that have been innocently happening for decades.