Hargreaves report published

The long-awaited Hargreaves report entitled Digital Opportunity: A Review of Intellectual Property and Growth, has been published. Several of the report´s elements had been leaked in advance, so the provisions do not come as a surprise. The motivation for setting up the review reportedly came from a meeting between UK’s Prime Minister David Cameron and Google’s representatives, who mentioned that the UK’s archaic copyright laws needed an overhaul to act as an incentive for innovation in the digital economy. After the disappointing result of the Digital Economy Act, the prospect of having a more progressive review of the UK’s IP law must be heartening.

The report strikes the right tone in the first couple of chapters when it makes a plea for evidence-based policy to try to counter the power of the lobbyists in the area. Interestingly, Hargreaves offers two examples of policy failure, copyright term extension and the Database Directive. The report therefore recommends:

“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.”

One of the most interesting proposals is the one that relates to copyright licensing. The Byzantine licensing schemes in existence mean that in order to clear copyright for use in a derivative work, a user must search for several different agencies to see who holds the rights. The Digital Opportunity report recommends the creation of a Digital Copyright Exchange, an one-stop clearinghouse where users can acquire rights to a work.

Another much-publicised aspect of the review process was the possibility of creating a “fair use” system for the UK, much in line with the American right, instead of  the interesting proposal of fair dealing. Hargreaves does not seem convinced that fair use would work in the UK’s legal system, but offers the addition of more exceptions to the fair dealing regime, including a more robust exception for research, and at last allowing people to legally rip their own music by means of format shifting.

The most surprising part of the report for me was the inclusion of a relatively detailed patent section that makes some very informed discussion about the various problems regarding patents in the digital economy, particularly because of the existence of patent thickets in the telecomms industry, to the persisting problem of software and business method patents. The report was clear that the evidence in this area is often contradictory, and that patent thickets harm innovation instead of helping it. It recommends:

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 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.

Some good stuff here, but let us be reminded that reviews do not always make it to law. Does anyone remember Gowers?