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?



Jane Lambert · May 18, 2011 at 3:17 am

I've just finished reading but not yet got round to writing about it.

I also like the idea of a digital copyright exchange though I do not see the need for the government to appoint yet another bureaucrat to set it up. It will need the industry (or rather many industries') co-operation to work. If they are prepared to co-operate with a government appointee they could set it up for themselves anyway.

I agree Hargreaves made all the right noises about patents. However, I do think the post industrial economy needs better protection for software implemented inventions. Other advanced economies provide such protection and I think we run the risk of being left behind.

The recommendations on enforcement and advice to SMEs in chapters 8 and 9 were of particular interest to me and I found those bits particularly disappointing.

As I have just tweeted, this report is better than Gowers but it will never shake the world.


    Andres · May 18, 2011 at 4:55 am

    Hi Jane,

    I agree with you, it does look quite interesting, hopefully the UK will transform some of the proposals as law.

    I do not share your enthusiasm for patents in computer implemented inventions. I am now working in a software SME in Costa Rica, and we are doing fine without patents. I would even say that innovation here is unencumbered by worrying about patents. It seems to me that the situation in the U.S. has reached a breaking point, and I am not surprised to hear talk of firms trying to find friendlier patent climate. Protecting your own innovation in software usually comes with a high price in paying prohibitive licence fees.

    More on that in the next couple of days.


AJ · May 20, 2011 at 2:32 am

Generally full of sensible comments but would have liked recomendations a bit more specific and pointed.

As for CIIs clarify the ambiguity; UK software SMEs i've spoken to are often confused about whether and what software is patentable. Often believing no software is patentable. DE and FR applicants file more software patents at the EPO than UK applicants (even though their software sectors are smaller).

For many software firms the US is a key market; distributing software there, regardless of where the software was developed, risks infringing the significant number of US software patents.

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[…] (BLOG@IP::JUR) (Michael Geist) (Laurence Kaye on Digital Media Law) (IPKat) (Ars Technica) (Techno Llama) (IP Whiteboard) (1709 Copyright Blog) (IAM) (IP Watch) (Class 99) (Out-Law) […]

IP Down Under » China Update 21 May 2011 from IP Think Tank / 中国知识产权动向,2011年5月21日来自IP Think Tank · May 21, 2011 at 1:04 am

[…] (BLOG@IP::JUR) (Michael Geist) (Laurence Kaye on Digital Media Law) (IPKat) (Ars Technica) (Techno Llama) (IP Whiteboard) (1709 Copyright Blog) (IAM) (IP Watch) (Class 99) (Out-Law) […]

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