Thursday, 7 December 2006
Well, the final report of the Gowers Review of Intellectual Property has been released. The 140+ page report can be downloaded from here.
This is a big deal for the UK – a wholesale review of the efficiency and effectiveness of the whole UK IP system – albeit it has been easy to ignore the goings on, while we struggle locally with what is now, officially, the Australian Copyright Amendment Act 2006 (Cth). Below, a brief background, some links to the UK commentary, and some thoughts on how the recommendations stack up against/compare to what we’ve seen in the just-completed round of Australian copyright and other IP amendments.
The basic background to the Review can be found here. In December 2005, the Chancellor of the Exchequer – that is, the Treasury, not the IP Office in the UK – asked Andrew Gowers to conduct an independent [note that?] review into the UK Intellectual Property Framework. According to the terms of reference, the Review was to examine all elements of the IP system, to ensure that it delivers incentives while minimising inefficiency. Specifically:
- The way in which Government administers the awarding of IP and provides support to consumers and business. The award and observance of IP should be predictable and transparent, with minimal information costs and transaction costs for firms and citizens.
- The way in which businesses and other organisations use IP. The structure of the IP framework should reflect the impact of economic and technological change on the nature of intellectual assets and their importance to businesses across different sectors.
- How well businesses, other organisations and individuals are able to exchange and trade IP â€“ in particular negotiating the complexity and expense of the copyright and patent systems, including copyright and patent licensing arrangements. Exchange of IP should be facilitated by accurate valuation, with no barriers in access to finance, and liquid markets.
- How well businesses and others are able to challenge and enforce IP. Litigation and enforcement should be swift, efficient and judicious with the optimal mix of technical and legal measures. Businesses should be aware of the range of alternative methods to challenge and enforce IP such as mediation and alternative dispute resolution. These methods should be relatively inexpensive, swift, efficient and transparent.
The Final Report includes 54 recommendations, across a very broad range of matters. These are, of course, all just recommendations – the UK Government now has to decide what to do about them all. Some indications of its intentions can be found in its Pre-Budget Report, in which the the government said it endorsed the package of measures on IP enforcement recommended in the Gowers Review, and said it would:
- tighten penalties for copying and piracy, and provide enforcement agency Trading Standards with an additional Â£5 million next year to help officials implement new powers to tackle copyright infringement;
- give individuals new rights for personal use;
- introduce a new fast track scheme to help small companies to protect their trade marks;
- set up an independent Strategic Advisory Board for IP policy which will receive Â£500,000 from the Patent Office to commission research on emerging IP trends; and
- provide new tax reliefs for movies filmed in the UK.
The report is newly out, so there isn’t a lot of detailed commentary yet, but here’s some links to what I’ve found so far:
- The IPKat comments here
- The IP Geek comments here
- The Open Rights Group (UK) comments here
- Managing IP comments here
- Lessig comments here (generally, albeit briefly), here (briefly, on retrospectivity in IP) and here (in the Financial Times on term extension)
- Michael Geist comments here (I agree with Michael, the recommendations are a starting point for Canada – but it is definitely worth looking at the detail of the report, which has some interesting quirks and limitations to it).
The Report’s recommendations span the whole of IP – the law, the administration, the enforcement systems, budgetry items – and cross patent, copyright and trade mark. They will take some time to digest, although a quick read of the recommendations suggests (unsurprisingly) an incremental shifts and changes and adjustments, rather than any deeply radical agenda. As the foreword says,
I do not think the system is in need of radical overhaul. However, taking a holistic view of the system, I believe there is scope for reform to serve better the interests of consumers and industry alike.
On copyright, the Report recommends both better enforcement, and a series of new exceptions. Sound familiar? Yes, that’s what our government has been saying they want to do (that is, ‘treat consumers like consumers and pirates like pirates’). The detail, however, is quite different.
The new exceptions recommended are:
- Educational provisions to cover distance learning and ‘interactive whiteboards’ (designed to secure and allow the use of ‘virtual learning spaces)
- A limited private copying exception ‘for format shifting for works published after the date that the law comes into effect’
- Extension of the research exception to cover all forms of content (we have this already)
- A Library preservation exception to permit libraries to copy the master copy of all classes of work in permanent collection for archival purposes, and to allow further copies to be made from the archived copy to mitigate against subsequent wear and tear
- A library ‘format shifting’ exception for archival copies, to ensure records do not become obsolete;
- An exception for ‘caricature, parody or pastiche’
- An exception for ‘creative, transformative or derivative works’ (within the Berne 3 step test) (this appears to be based on a concern particularly about music sampling, and an argument that some sampling should be allowed to create new works); and
- A provision for orphan works along with guidelines on how much searching should be done before a work is declared ‘orphan’.
The last two require recommendation to the European Commission, since they are currently precluded by the Information Society Directive exclusive list of copyright exceptions.
The discussion of private copying is interesting: it explicitly discusses the issue of levies, and whether one is necessary for compliance with the three step test. Let me quote from the body of the report:
4.75 The Review believes it is possible to create a very limited private copying exception without a copyright levy. If rightholders know in advance of a sale of a particular work that limited copying of that work can take place, the economic cost of the right to copy can be included in the sale price. The â€œfair compensationâ€ required by the Directive can be included in the normal sale price. This means, however, that any private right to copy cannot be extended retrospectively as copies of works already sold would not include this â€œfair compensationâ€. Therefore, collecting societies may wish to consider making a single block licence available to allow consumers to format shift their back catalogues legitimately.
4.76 There should be some strict limits on the scope of any private copying exception. The Review recommends that the private copying should be limited to â€˜format shiftingâ€™ (i.e. transferring a work from CD to an MP3 player or from a video tape to DVD) rather than simply allowing any copies to be made for private purposes. The exception would only allow one copy per â€˜formatâ€™, but it would also have to recognise that transfer between formats may require intermediate steps (or formats) to be taken.
Wow. This looks like the original comments that the Australian government made – this copying should be legitimate, there should be no levy, one copy in any given format with intermediate copies. I suspect, if they try to do this, they will encounter the same problems our government has – it’s really hard to draw these limitations.
But is it just me, or does it not really make much sense to say that the sale price can include ‘fair compensation’, but then talk about making the change only for works created (not sold) after the change? (and yes, I get that earlier contracts at the point of creation might be relevant here, but so might the fact that, for example, this copying is already happening, and the record industry has said they won’t pursue people for private copies…).
Arguably, on sound recordings, here in Australia, what we ended up with was more generous than what is being proposed here (we can copy to all our devices, for example). Although, our exception for private copying is limited to certain formats, and has different conditions and limitations on each format (and hence is incomprehensible) – an approach not proposed by Gowers. I hope the UK government doesn’t catch the ‘complication infection’ from the Antipodes in their drafting.
The orphan works stuff is also interesting to us here in Oz – if only because this was one area the government has chosen not to do anything here in Australia despite this radical overhaul of copyright law and exceptions. In February 2006, they said there would be a review of the issue sometime this year. Obviously, they got busy with other things. Will they do anything? I can’t help but wonder whether some heat will go out of the issue because the main funded and focused proponents of such an exception – the cultural institutions and educational institutions – have their new ‘flexible exception’ which could cover many uses (the new s200AB). On the other hand, since that exception doesn’t allow any commercial activities, maybe that’s not enough.
The interesting thing about the Gowers approach to orphan works is:
- it effectively endorses a kind of ‘light touch’ approach, just like the US Copyright Office did earlier this year;
- it recommends some guidelines on when something can be considered orphan, and most interestingly…
- it suggests that one way to reduce any ‘negative effect’ of rights to use orphan works on creators is to establish a voluntary register of copyright – so that owners can use this to take care of their own interests.
You know what? About 6 years ago, when I was talking about copyright with Patrick Fair for no apparent reason, we got talking about orphan works. Way back then, he suggested the voluntary register idea might work to take care of orphan works through effectively what is a private solution. Anyone feeling like building a register…..?
This idea is eminently sensible and not particularly regulatory. It therefore won’t be on the list of ‘things to do in copyright’ for our government. But remember, it doesn’t have to be government that does something like this…
Also on copyright:
- a recommendation to retain the existing term for sound recordings and performers’ rights (50 years) (our term here is 70 years, by the way – and that’s a result of the FTA with the US). What’s nice here is to see a truly evidence-based approach, and an evaluation of the various arguments sometimes put forward for copyright term extension. Nice, short, to the point.
- a recommendation for a ‘market survey into the UK collecting societies to ensure the needs of all stakeholders are being met’. It appears that this recommendation is meant to feed into a current European Commission process considering ways to increase the transparency of collecting society operations, and introducing competition between existing European societies. This one will be worth watching. If the EU introduces competition between societies, and the US already has competition (their collecting societes take non-exclusive licenses), Australia may need to consider how to meet the needs of its stakeholders that have to use collecting societies.
On anti-circumvention law (TPM/DRM stuff) the recommendations are really pretty minimal. There are two recommendations:
- Make it easier for users to file notice of complaints procedures relating to DRM tools by providing an accessible web interface on the Patent Office website by 2008;
- DTI should investigate the possibility of providing consumer guidance on DRM systems through labelling convention without imposing unnecessary regulatory burdens.
Are you listening, Australian government? The interesting thing is that both of these recommendations would be consistent with our own new regime here in Australia and our FTA. That is:
- Since the government has introduced a new system of DRM protection, and the capacity for users to seek new exceptions for circumvention where legitimate uses are being prevented, maybe the Department should consider instituting a simple web interface for the making of complaints, so that information could be gathered. Alternatively, if anyone is interested (Choice? ADA? EFA? Someone? Maybe the ACCC???), this could be a useful step prior to making any application to AGD for an exception to allow circumvention. or the AGD, having received a complaint/request for exception, could set up a web interface for commentary/further evidence-gathering processes….
- The idea of labelling material with DRM on it should be explored. That has everything to do with consumer protection, and little to do with copyright. Regulatory burdens would also be reduced if the same systems were adopted in different countries, too, you know…
Copyright/IP and crime
There are quite a few recommendations on IP crime and enforcement of criminal provisions in IP law:
- matching penalties for online and physical copyright infringement;
- review issues on damages and seek further evidence to ensure that an effective and dissuasive system of damages exists for civil IP caes and that it is operating effectively
- Home Office should recognise IP crime as an area for Police action as a component of organised crime within the updated National Community Safety Plan;
- Give Trading Standards the power to enforce copyright infringement (giving them the power and duty to enforce, and the power to test purchases, enter premises, and inspect and seize goods and documents).
But look, no strict liability!! No infringement notices!!! And there’s some ‘balancing’ bits even here with a recommendation that the government
Monitor success of current measures to combat unfair competition in cases relating to IP, and if changes are found to be ineffective, government should consult on appropriate changes.
I like theirs better than ours.
There’s a whole lot of stuff on patent; the detail is beyond this post which is already too long. Here’s a list of the patent-related recommendations and context from IP Geek:
- Recommendation 1: Amend section 60(5) of the Patents Act 1977 to clarify the research exception to facilitate experimentation, innovation and education. (page 51)
- Recommendation 22: Maintain a high quality of patents awarded by increasing the use of “section 21” observations: streamlining procedures and raising awareness. (page 88)
- Recommendation 25a: Introduce accelerated grant process for patents to complement the accelerated examination and combined patent search and examination procedures. (page 90)
- Recommendation 30a: The Patent Office should publish and maintain an open standards web database, linked to the EPOâ€™s esp@cenet web database, containing all patents issued under licence of right. (page 94)
- Recommendation 30b: The Patent Office should publish and maintain an open standards web database, linked to esp@cenet containing all expired patents. (page 95)
- Recommendation 23: The Patent Office should conduct a pilot of Beth Noveckâ€™s Community Patent Review in 2007 in the UK to determine whether this would have a positive impact on the quality of the patent stock. (page 90). Such a review is is intended to harness the collective knowledge of experts through the internet in order to help patent examiners find the right citations. The public is invited to submit prior art via a webpage, which can then be rated by the community. The aim is to ensure that bad patent applications are not granted and to narrow claims in applications in order to narrow the scope of protection.
- Recommendation 25a: Introduce accelerated grant process for patents to complement the accelerated examination and combined patent search and examination procedures. (page 90)
- Recommendation 17: Maintain policy of not extending patent rights beyond their present limits within the areas of software, business methods and genes. (page 80)
- Other Recommendation refer to support for the establishment of a single Community Patent, the EPLA and the London Agreement (as an interim step towards COMPAT, and as an improvement in its own right).
One thing I think is interesting here is the set of recommendations aimed at finding ways – harnessing ‘outside knowledge’ – to improve patent quality. Fascinating.
Some concluding thoughts
Speaking as an Australian who has had some involvement in the recent processes of IP review and reform here in Australia, a number of things are striking about the report. These are:
- The evidence-based approach: independent economic reports on particular issues were commissioned (and not commissioned by interested parties, for example). This evidence-based approach also comes across throughout the whole writing of the report too.
- The holistic approach: the review has had a look at the whole IP system. It forms an amazing contrast with what has been going on in copyright here in Australia, with a series of apparently unconnected reviews conducted piecemeal by a completely unrelated set of bodies (CLRC, now disbanded, Phillips Fox the law firm, ACIP, several government departments including Industry, Attorney-General’s, and DFAT…) over a period of years with little attempt at a ‘strategic overview’ on IP.
- The transparency: there were hearings; submissions were published online (compare the ‘Fair Use Inquiry’ here, where only an extended period of complaint and nagging led to publication of submissions, or the publication of submissions on the TPM Exposure Draft only via ‘supplementary submission’ to the Senate Inquiry into the Bill). Or compare the at times almost secretive approach our own government took to reviewing IP law. I’m thinking here of the review of the criminal provisions that was never made public; the review of trade mark law which went on with little fanfare and known only to the cognoscenti of trade mark, the Fair Use Inquiry which never led to any kind of report or publication of the government’s views except via final drafted legislation (leading to repeated comments by people from every interested group that they don’t understand what the provisions are trying to achieve).
Obviously, I’ve not been involved in the UK process so maybe I’m just getting a rose-coloured view of what’s going on over there. But you know what? I’m jealous. People in the UK may not all get what they want. But at least – unlike people here – they look like they can feel they’ve been listened to and heard on all the important issues.
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