Hargreaves Review into the UK’s Intellectual Property Framework

The Hargreaves Review is an independent report by Ian Hargreaves into the UK's intellectual property framework.

In November 2010 the Prime Minister David Cameron announced an independent review of how the Intellectual Property framework supports growth and innovation.

Chaired by Professor Ian Hargreaves from Cardiff University and assisted by a panel of experts, the review reported to Government in May 2011. The Review made 10 recommendations designed to ensure that the UK has an IP framework best suited to supporting innovation and promoting economic growth in the digital age.

UK Government Response

Pensioners, hargreaves review1. “Intellectual Property is important to growth”

The Government accepts the Review’s overall conclusion that IP is important to growth and that IP laws are, in some cases, obstructing growth. The Government is particularly concerned to reduce barriers to creating viable IP-using small firms, whether in existing industries or in new niches. IP is intensely valuable to the UK; that value can be increased if we act effectively now and will decrease if we do not.

2. “The IP framework is falling behind and must adapt”

The Government shares this concern. There is a constant need for the IP system to adapt to new forms of innovation, creativity and technology, but that need is now particularly marked in copyright because technology has made copying and communicating many works very easy and created opportunities for the widespread and efficient use of digital content. As the Review notes, the advent of 3D printing may herald a time where copying material objects becomes similarly straightforward. Cloud computing and the ‘internet of things’ are based on ever-increasing flows of data. There are implications here for privacy and security that go far beyond IP but have a bearing on future public policy, IP included.

3. “Evidence should drive policy”

Fundamentally, the Government agrees with not only the Review’s headline conclusion but also with its underlying critique: too many past decisions on IP have been supported by poor evidence, or indeed poorly supported by evidence1. This is true at an international level as well as domestically. Recommendation 1 of the Review calls on the Government to make decisions on IP policy on the basis of good evidence, balancing economic objectives and the needs of various groups.

4. “A digital copyright exchange will facilitate copyright licensing and realise the growth potential of creative industries”

The Government agrees it is right to help develop effective markets in copyright licensing where they are not emerging spontaneously. It believes a Digital Copyright Exchange (Recommendation 3) has the potential to offer a more efficient market-place for owners and purchasers of rights, as well as opening up new markets to creators who may not have previously been able to access them.

5. “Further steps to modernise copyright licensing…”

Cross-border licensing

The Government welcomes the Review’s identification of opportunities for UK licensing bodies in European moves to improve the operation of copyright licensing (Recommendation 3). An efficient and flexible cross-border licensing framework is essential to the creation of a single EU market for content that smaller firms can readily enter and succeed in. The Government welcomes the European Commission’s initiative in proposing a cross-border licensing framework and will work with UK interests and the Commission to develop proposals that are compatible with current effective licensing models in the diverse industries affected.

Orphan Works

There are opportunities too in respect of so-called orphan works (Recommendation 4). The Government agrees with the Review’s fundamental premise that it benefits no-one to have a wealth of copyright works be entirely unusable under any circumstances because the owner of one or more rights in the work cannot be contacted. This is not simply a cultural issue; it is a very real economic issue that potentially valuable intangible assets are simply going to waste. The Government will this autumn bring forward proposals for an orphan works scheme that allows for both commercial and cultural uses of orphan works, subject to satisfactory safeguards for the interests of both owners of ‘orphan rights’ and rights holders who could suffer from unfair competition from an orphan works scheme. These would include diligent search for rights owners, licensing at market rates for commercial use and respect for the rights of ‘revenant’ owners that come forward. The Government will look to the DCE and other searchable sources of information on copyright works to deal with problems of misattribution or loss of ownership data from works.

6. “Copying should be lawful where it is for private purposes, or does not damage the underlying aims of copyright…”

There is a fundamental role for copyright in providing appropriate incentives for the creation of valuable works. The Government has no intention of prejudicing this role, on which much value for the UK depends. We nonetheless believe the Review is right to identify activities that copyright currently over-regulates to the detriment of the UK, and to propose changes to tackle the problem (Recommendation 5).

7. “Building future-proofing into the legislative and regulatory framework…”

The Review recognises that the UK’s scope for action on copyright exceptions is limited. It makes the case for broader changes at the EU level in order to enhance economic growth now and – through building in adaptability to new technologies – in the future. In the Review’s judgement, and the Government’s, there is a need for a wider set of exceptions at EU level to achieve this, again without prejudice to the provision of appropriate incentives for creation of works (Recommendation 5).

8. “Adapting the patent and design frameworks to changing circumstances…”

Patents and innovation

The Review notes the value of patents and identifies concerns about the patent system, both from an operational point of view (backlogs and worries about patent quality) and in terms of its impact on innovation. In particular, it is concerned that patents in some business areas and concentrated ‘thickets’ of patents in some technologies are anti-competitive and hence anti-innovation (Recommendation 6).

Design and design rights

The Review also identified a lack of evidence concerning IP and the design industry (Recommendation 7). The Government recognises the very limited evidence available on the impact of design rights, and that there are divergent views as to whether IP is a positive or negative influence on particular design sectors: is the UK’s design sector large because of or in spite of what the Review called a “patchwork of intellectual property right provision”? Nonetheless, the Government has heard clearly the concerns that the design rights system in the UK may not be adequately geared to the needs of business.

9. “Effective enforcement requires education, effective markets, an appropriate enforcement regime and a modern legal framework…”

An effective IP enforcement regime – and the UK’s is one of the best in the world9 – is a necessity for any advanced economy. The Government shares the Review’s perspective that intellectual property rights (IPRs) cannot fulfil a useful function unless they are enforceable.

10. “Helping SMEs to realise the potential of IP…”

A key focus of both the Review and the Government’s response to it is the need to support the growth of SMEs, particularly innovative SMEs, in IP-using sectors. In addition to other issues noted around enforcement and market access for SMEs, the Review highlights smaller firms’ difficulties in finding reliable and cost-effective advice on IP (Recommendation 9).

11. “Creating an IP framework which adapts to changes in technology and markets requires changes to the IPO…”

The Government is committed to policies based on sound evidence and to the transparent operation of public bodies. The Review found past decisions on IP did not always live up to this standard, apparently influenced by strong lobbying from interested parties. The Government believes it is important to avoid not only the fact but also the appearance of bias and therefore believes there is a good case for change to the IPO that will support more evidence-based decisions in future (Recommendation 10).

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