By Marcus Leach

The Federation Against Software Theft has cautiously welcomed the findings of the Hargreaves Review into Intellectual Property and Growth, but concerns remain over the uncertainty of what exactly will be taken forward and how quickly.

Key findings of the Report include the suggestion of a ‘Digital Copyright Exchange’, where the intention is to promote growth by having an efficient, open and effective digital market where rights can be can be speedily licensed and effectively protected.

“The intention is noble,” commented Julian. “However, it is yet to be seen how this could work in practice or whether it is intended or even desirable for the software industry to participate.”

He continued: “Software licensing is classically decentralised rather and a publisher secures the best terms it can, subject to law, in endeavouring to sell its product, where there is often stiff competition from others with competing software products doing the same job. It needs careful consideration as does the notion with the Exchange that, if a product is lodged, enhanced enforcement rights may be attributed plus access only to the anti piracy provisions of the Digital Economy Act 2010.”

On enforcement of IP rights in general, Julian commented that, “it was disappointing that consideration had not been given further to the implementation of Article 4 of the Enforcement Directive which would have promoted self help enforcement by industry.

Noting that the Government should pursue an integrated approach based upon enforcement, education and, crucially, measures to strengthen and grow legitimate markets, he added: “In 2006, Gowers recommended that the enforcement regime should be ‘effective and dissuasive’ and arguably it is not when simply a licence fee can be paid if an infringer is caught on the hop; the Gowers sentiment should not be forgotten.”

Julian Heathcote Hobbins added: “At the time of the launch of the Review process Professor Ian Hargreaves was particularly interested in the impact of the IP system on small and medium sized businesses given their importance to the UK economy. In our submission to the Review we discussed the vital role small software businesses here in the UK play.

“Whilst there was a lot of speculation that a so-called ‘fair use’ doctrine, as enshrined in US law, might be considered here in the UK in order to be an enabler of growth, we are pleased that this has not been recommended in the Review as small software businesses simply would not have the funds to test any new ‘fair use’ doctrine. Had it been recommended as a regime it would have been dependant on litigating expensive cases in order to test the boundaries. If anything, in our experience small software developers are looking to have stronger copyright laws to protect the nexus of their ideas as patenting is often seen as a time consuming and expensive headache.”

“For example, a micro software business creates a great new software product. Wanting a quick buck, a competitor looks at it without copying the source code and develops a product doing the same thing in no time and then the original software designer can be left helpless unless it has been clever with the patent law,” he added. “However we draw comfort from the Review’s acknowledgement that with smaller rights holders, the approach to rights enforcement must fully recognise the needs of such smaller companies.

“Implementation of the ‘fair use’ doctrine would be a difficult legal balancing act, given the need to shoehorn it into EU law. More importantly though, we in the software industry have the Software Directive which allows flexibility uniquely for computer programs. So if it ain’t broke, don’t fix it!” he concluded.