Thursday, December 07, 2006

Gowers Review of Intellectual Property

The final report of the Gowers Review of Intellectual Property was published yesterday. It is a remarkably sound and rational analysis of the IP landscape which I hope the government pay attention to when dealing with hysterical demands from the music industry for copyright term extension. As James Boyle so rightly said recently, the whole idea of retrospective copyright term extension is very stupid:

"But if this is the stupid idea we wish to pursue, then simply increase the income tax proportionately and distribute the benefits to those record companies and musicians whose music is still commercially available after 50 years. Require them to put the money into developing new artists – something the current proposal does not. Let all the other recordings pass into the public domain.

Of course, no government commission would consider such an idea for a moment. Tax the public to give a monopoly windfall to those who already hit the jackpot, because they claim their industry cannot survive without retrospectively changing the terms of its deals? It is laughable."

From the Gowers review press release:

"The Report argues that in the modern world, the UK's economic competitiveness is increasingly driven by knowledge-based industries, innovation and creativity. Intellectual Property (IP) - protecting and promoting innovation - has never been more important.

Whilst the Review concludes that the UK has a fundamentally strong IP system, it sets out important targeted reforms. The reforms aim to:

  • strengthen enforcement of IP rights to protect the UK's creative industries from piracy and counterfeiting;
  • provide additional support for British businesses using IP in the UK and abroad; and
  • strike the right balance to encourage firms and individuals to innovate and invest in new ideas while ensuring that markets remain competitive and that future innovation is not impeded.

Andrew Gowers said:

"In today's global economy, knowledge capital, more than physical capital, will drive the success of the UK economy. Against this backdrop, IP rights, which protect the value of creative ideas, are more vital than ever.

"The ideal IP system creates incentives for innovation, without unduly limiting access for consumers and follow-on innovators. It must strike the right balance in a rapidly changing world so that innovators can see further by standing on the shoulders of giants. And it must take tough action against those who infringe IP rights at a cost to the UK's most creative industries.

"The Review provides sound recommendations on how the IP regime should respond to the challenges that it faces. Getting the balance right is vital to driving innovation, securing investment and stimulating competition."

The Review identified a number of areas where reform is necessary to improve the system for all its users.

With the music industry losing as much as 20 per cent of annual turnover to piracy and counterfeiting, the Review recommends strengthening enforcement of IP rights through:

  • new powers and duties for Trading Standards to take action against infringement of copyright law;
  • IP crime recognised as an area for police action in the National Community Safety Plan;
  • tougher penalties for online copyright infringement - with a maximum 10 years imprisonment;
  • lowering the costs of litigation - by using mediation and consulting on the fast-track limit. The Review acknowledges that prohibitive legal costs affect the ability of many to defend and challenge IP; and
  • consulting on the use of civil damages and ensuring an effective and dissuasive system of damages exists for civil IP infringement.

To provide support for businesses using the IP system the review recommends that:

  • UK Patent Office be restructured as the UK Intellectual Property Office, with recommendations for it to provide greater support and advice for businesses using IP domestically;
  • Business representatives sit on a new independent Strategic Advisory Board on IP Policy, advising the Government; and
  • Government improve support and advice internationally - including in India and China - to enable UK businesses to protect their investment around the world.

To ensure the correct balance in IP rights the review recommends:

  • ensuring the IP system only proscribes genuinely illegitimate activity. The Review recommends introducing a strictly limited 'private copying' exception to enable consumers to format-shift content they purchase for personal use. For example to legally transfer music from CD to their MP3 player;
  • enabling access to content for libraries and education establishments - to ensure that the UK's cultural heritage can be adequately stored for preservation and accessed for learning. The Review recommends clarifying exceptions to copyright to make them fit for the digital age; and
  • recommending that the European Commission does not change the status quo and retains the 50 year term of copyright protection for sound recordings and related performers' rights."
The music industry's response has been predictable - a PR campaign trying to marginalise the report, including an advert in today's FT apparently signed by 4500 artists saying they desparately need a copyright term extension on sound recordings. Sadly such tricks, as I explain in more detail in my book, often have the power to influence policymakers in ways that rational argument based on sound evidence does not. Let's hope that Gordon Brown favours rationality over rhetoric in this instance.

Update: Some of the signatures on the music industry FT advertisement are those of dead artists. So it seems that dead people are keen on copyright extension, which means the rational argument suggesting dead people cannot be encouraged to produce new creative works is now also dead?

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