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Government broadly backs Hargreaves recommendations to change IP frameworks


The UK's intellectual property (IP) laws sometimes hamper business growth, the Government has said.

In a response to an independent review of IP laws published earlier this year, the Government said it is "broadly in agreement" with the principles behind 10 recommendations made in the review and that it aims to make changes to the IP frameworks by the end of Parliament in 2015

Legalising 'format shifting' of copyright-protected works for private use and introducing a new 'digital copyright exchange' were among the recommendations backed by the Government.

"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 Response to the Hargreaves Review of Intellectual Property and Growth report (24-page / 411KB PDF) said.

"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. ... The challenges of today are around digital copying. That is where most adaptation is currently needed." the report said.

In May university professor Ian Hargreaves announced ten recommendations for altering the framework of IP laws in the UK.

Plans to create new exceptions to copyright laws, including a "limited" right to copy legitimately purchased copyrighted material for private use were announced in the Government report. The Hargreaves review had recommended that individuals should be allowed to change the medium on which they play music they have bought. They should, for example, be able to save music from CDs to computers or music players, the review had said.

Under EU law countries can legalise 'format shifting' within national copyright law.

"The public will welcome the changes to private copying regime," Iain Connor, a copyright law expert with Pinsent Masons, the law firm behind OUT-LAW said. "Most would have already assumed that shifting copyrighted material between different mediums for private use was legal.”

The Government will also "widen the exception for library archiving; and ... introduce an exception for parody" into UK copyright laws.

Currently the UK has limited exemption for 'fair dealing' in copyright-protected material, which permits the use of content in news reporting or for criticism or review, amongst other things.

A report into the development of a 'digital copyright exchange' will be published by the end of the year, the Government said.

The Hargreaves review had suggested establishing an online mechanism for owners of copyrighted material to make licenses to their material available in a standardised way. The report had said that it would make it easier for users of copyrighted material to obtain the right licences and encourage legal use of copyrighted content.

State-owned copyright materials will be made available through the new exchange and the Government "will encourage public bodies to do likewise", it said.

The scope of incentives needed to make a new copyright licensing hub attractive to businesses will be investigated by the end of 2011, the Government said.

"We believe a digital copyright exchange 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," the Government report said.

"The Government has not yet announced exactly how the new digital copyright exchange will be paid for," copyright law expert Iain Connor said. "Conducting a study into how the new system could work without that detail will make it very difficult for it to gain enough support for it to be introduced in 2012, which is when Professor Hargreaves had recommended the system be established by."

EU proposals to establish a cross-border copyright licensing system are also welcome, the Government report said. The European Commission said in May that it would announce plans for the new system later this year.

The right to use 'orphan works' will also be established, the Government said. Orphan works are copyrighted material that cannot be used because its creator is unknown.

"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 report said.

Collecting societies will be subject to more stringent rules on the way they charge for use of copyrighted works. The societies will have to comply with minimum standards for voluntary best-practice codes that the Government will set out. Societies that do not meet the minimum standards voluntarily will be forced to comply with new laws the Government proposes to create.

The Intellectual Property Office (IPO) is reviewing whether protections given to designs are linked to innovation, the report said. Currently, designers are protected by design rights, which are different to copyright. The Hargreaves report had said IP needs of designers "had been neglected".

The Government said that design rights "may not be adequately geared to the needs of business". Proposals to include rights-protected designs in the new digital copyright exchange or a similar framework will be explored, it said.

Inventors will not be able to gain patent protection in sectors where protection rights are currently excluded, the Government said. Patent protection is prohibited under UK and EU laws for the invention of new business methods or computer programs, for example.

The Government said it was concerned that "patent thickets" in some sectors had made industries anti-competitive and anti-innovative and has tasked the IPO with exploring options to tackle the problem "which could include coordinated international changes to patent fee structures if the issues prove to be international in scope", the report said.

"The Government is focused on boosting growth and the Hargreaves review highlighted the potential to grow the UK economy," Business Secretary Vince Cable said in an IPO statement.

"By creating a more open intellectual property system it will allow innovative businesses to develop new products and services which will be able to compete fairly in the UK's thriving markets for consumer equipment. We are accepting the recommendations and will now set about reforming the UK's intellectual property systems. Opening up intellectual property laws can deliver real value to the UK economy as well as the creators and consumers," Cable said.

Digital rights lobbyists the Open Rights Group said the Government “should be applauded for wanting to modernise our copyright laws”.

A spokesman for the film industry said movie bodies “welcome the assurances regarding better enforcement at home and abroad and the measures to assist in rights clearance where there is market failure” but expressed unease with some aspects of the Government’s report.

“We remain concerned about a number of recommendations which could have a negative impact on the film industry including format shifting for film and how the Digital Copyright Exchange would work in practice,” Chris Marcich, President and Managing Director (EMEA), Motion Picture Association, said. “We hope that the Government will work with us to ensure that any negative commercial consequences are minimised”.

Technology law news is also available from Bootlaw, a free resource for technology start-ups, with regular events hosted by Pinsent Masons.

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