The Gowers review
In 2005, the Chancellor of the Exchequer commissioned a top-to-bottom review of the intellectual property (IP) system in the UK. It was undertaken by Andrew Gowers, a former editor of the Financial Times, with a wide-ranging brief: to examine all elements of the IP system, in particular in the light of globalisation and technological advance, in order to ensure that it delivers incentives while minimising inefficiency. The Gowers consultation went on into 2006, and received some 500 submissions from stakeholders. The final report was released on 6 December 2006.
The Gowers review has been broadly welcomed by IP practitioners, but it does not exactly set the world on fire.
The review finds that the UK IP system is performing broadly satisfactorily, and makes 54 recommendations for improvement. Many of these - such as recommendations that the current law remain unchanged, or about general government policy, or improvements in disseminating information about IP rights -
are of low interest for most practitioners. But some do point up anomalies in UK IP law and/or could make a real impact if implemented.
Damages for IP infringement
At present, the most common method of calculating damages for IP infringement is by a notional arms-length royalty for the period of the infringement. Many rights-holders complain that this does not give sufficient disincentive to infringers, because the infringer generally pays no more than a commercial rate for its infringement. The US, by contrast, often awards multiples of damages. The review recommends that 'a more effective and dissuasive system of damages for IP infringement' should be put in place and considered by the Department for Constitutional Affairs in its forthcoming consultation paper on damages.
The review recommends that fast-track litigation should be used in IP cases, with capped fees, limited disclosure and time limits. Fast-track litigation is already available in IP cases, in as much as the courts can set the scope and timetable at the case management conference in the same way as for other litigation, while the patent rules contain their own streamlined procedure for appropriate cases. Perhaps, though, the Gowers recommendation could be used to promote more aggressive or standardised use of these tools.
Exception for private copying
Possibly the most high-profile recommendation is the introduction of a limited private copying exception, which will allow consumers to format-shift legitimately purchased content. Format-shifting is, strictly speaking, a breach of copyright law, although there can hardly be a reader who has not transferred a record onto tape, or a CD onto an MP3 player. Whether it would make any practical difference to repair this fracture between public law and private practice is a matter of debate.
Copyright exception for parody
Parody, caricature or pastiche
can also, strictly speaking, be a breach of copyright. By its nature, parody takes heavily from a copyright work and so, freedom of expression arguments aside, the parodist stands at risk of an infringement claim. The BBC, in particular, felt that permitting parody, caricature or pastiche of
a copyright work would facilitate the wider broadcast and sale of programmes.
Trading standards and copyright
Trading standards officers have the power and duty to prevent the sale of trade mark-protected goods, but no power to act where the infringement relates
to copyright alone. The review recommends extending their powers to copyright, allowing them to prevent the sale of, for example, counterfeit CDs or software. This could be a cheap way for copyright holders to enforce their rights. However, is
it common in practice for counterfeits to infringe copyright without also infringing trade marks (fake Microsoft packages, for example)? Whether rights-holders will be able to interest over-stretched trading standards departments is also debatable.
Digital IP infringement
Criminal sanctions for copyright infringement in the digital world can be softer than those for infringement in the physical world. Communicating a copyright work to the public in the course of an online business can lead to a sentence on indictment of up to two years, compared to ten years for making infringing copies for sale or hire. The review recommends harmonising these periods, particularly given the prevalence of digital infringement.
'Orphan works' are copyright works where the owner of the copyright cannot be established. A person wanting to reproduce a work might take reasonable steps to establish the copyright owner's identity but fail to do so; if he then reproduces it, the work's true owner can pop up later and claim damages for infringement. The review says this stifles legitimate creative use of orphan works, and calls on the European Commission to create an exception to allow creative artists to re-use orphan works. It also recommends that the Patent Office issue guidance on what will constitute a 'reasonable search' before a work is considered to be an orphan.
Clarify the research exception
Section 60(5) of the Patents Act 1977 says an act 'done for experimental purposes relating
to the subject matter of the invention' will not constitute a patent infringement. This 'research exception' is intended so that researchers can conduct research on patented inventions for the purpose of understanding and improving existing products and processes without the need for the patent holder's permission.
However, Gowers found that many researchers find its scope unclear. For example, uses relating to the subject-matter of a patented product are clearly covered, but what about where research using a patented product may give results about a different subject-matter? This uncertainty stifles research, and the review recommends that the position should be clarified. It should be pointed out, though, that a 2004 Department of Trade & Industry (DTI) report highlighted the difficulties in changing the law in this area. It would need to ensure that a 'clarified' exception is not used to justify using patented research tools without permission.
Model IP licences
The review recommends that the Patent Office should develop 'business-to-business' model IP licences. These might be similar to the 'university-to-business' model IP licences recommended in the 2003 Lambert review of university/industry collaboration.
Model IP reports
Since intangible assets such as IP rights figure so large in company accounts, the DTI is asked to consider improving the guidance for firms on reporting intangible assets, including the provision of model IP reports.
There is a lot of valuable stuff in Andrew Gowers' review. In particular, the review is good at addressing the fuzzy edges of the IP system, where uncertainty or legal anomaly may be stifling creativity or research. But you cannot help feeling that the recommendations are just a bit bland. That may be because so much of the UK IP regime is governed by international treaties and European directives, so that there is only so much that the UK can achieve on its own. But you cannot see the review as it stands greatly impacting on the complaints that IP rights are difficult for non-specialists to understand, maintain and enforce. Let's hope the government puts more radical flesh on its bones.