03/11/10

By Claire West

David Cameron, the Prime Minister, has announced that an independent review of the UK intellectual property (IP) system would take place over the next six months. The final report will be produced in April 2011. He hopes that the review will initiate growth and innovation in the technology industry, especially among small and medium enterprises (SMEs), for whom IP can be a valuable asset.

The review will consider:

1.barriers to new Internet-based business models;

2.the cost and complexity of enforcing IP rights;

3.the interaction between IP and competition frameworks;

4.the cost and complexity to SMEs of protecting and exploiting their IP; and

5.a US-style “fair-use” rule to allow for the use of certain copyrighted material without the owner’s express permission.

The aim of the review is to make IP law “fit for the Internet age”, with the fair-use rule the primary example. In the US, this allows for re-use of Internet content without permission from the copyright holder. A Google Image search reproduces copyrighted and unlicensed images, despite being freely available on the Internet. This is prohibited in the UK, but not the US.

There are other practical problems with the current copyright regime, generally concerning the fact that the law was designed for pens and paper rather than the electronic age. For example, consumers cannot copy music from legally purchased CDs onto their MP3 players without technically breaking the law (so-called “format-shifting”).

Some Internet freedom campaigners argue that this review is a step in the right direction following the Digital Economy Act, which increased the powers of copyright holders to block access to websites hosting illegal content. The Digital Economy Act did not deal with personal copying and transfer situations and they would hope that the review would fill the gap.

But there are those who are nervous about the review, particularly big-name producers and publishers of material. They argue that people who generate and invest in creativity should receive the correct reward for their effort, which they believe would be compromised by a liberalisation in the law.

Others question the necessity of another review so soon after the expensive Gowers Review in 2006, whose recommendations remain largely unfulfilled. It is also true that much of the UK’s IP laws come from the European Union, limiting the scope of any possible change.

However, some question whether the review would even achieve its objectives if the law is actually changed. The aim is to make IP law more friendly to technology businesses, in the hope that they would base within the UK. They argue that, even if IP law were liberalised for companies such as Google and Facebook, the lack of a general technology investment culture means that the UK cannot compete with places like Silicon Valley.

The UK’s IP law does need change. It is patently ridiculous for users not to be able to re-use material that they have legitimately bought, for personal use. Many western countries have a personal use exception, with copyright holders being rewarded through appropriate levies. There also needs to be a more modern way to reward copyright holders rather than fighting against the tide of Internet copying. In general, the law must move into the modern age. Whether we need more public money spent on another review after the last one made recommendations which have not been implemented is open to doubt. At a time of budgetary restraint, would this be money well spent? If actions are needed, it is time to act; not to consult, debate, research, report and recommend again.

Paul Gershlick is a Partner and Simon Weinberg is a Solicitor within the Commercial/IP/IT team at Matthew Arnold & Baldwin LLP and are regular bloggers at www.mablaw.com.
12 November 2010