Gowers Review Published

by Robin Pilgrim, LawAndTax-News.com, London

08 December 2006

The Gowers Review of Intellectual Property was on Wednesday presented to the UK Chancellor of the Exchequer, and the Secretaries of State for Trade and Industry and Culture, Media and Sport.

The report, compiled by former Financial Times editor, Andrew Gowers, argues that: "In the modern world, the UK's economic competitiveness is increasingly driven by knowledge-based industries, innovation and creativity. Intellectual Property (IP) - protecting and promoting innovation - has never been more important."

Whilst the Review concludes that the UK has a fundamentally strong IP system, it sets out important targeted reforms. The reforms aim to:

• Strengthen enforcement of IP rights to protect the UK's creative industries from piracy and counterfeiting;
• Provide additional support for British businesses using IP in the UK and abroad; and
• Strike the right balance to encourage firms and individuals to innovate and invest in new ideas while ensuring that markets remain competitive and that future innovation is not impeded.

Andrew Gowers explained that:

"In today's global economy, knowledge capital, more than physical capital, will drive the success of the UK economy. Against this backdrop, IP rights, which protect the value of creative ideas, are more vital than ever."

"The ideal IP system creates incentives for innovation, without unduly limiting access for consumers and follow-on innovators. It must strike the right balance in a rapidly changing world so that innovators can see further by standing on the shoulders of giants. And it must take tough action against those who infringe IP rights at a cost to the UK's most creative industries."

"The Review provides sound recommendations on how the IP regime should respond to the challenges that it faces. Getting the balance right is vital to driving innovation, securing investment and stimulating competition."

With the music industry losing an estimated 20% of annual turnover to piracy and counterfeiting, the Review recommends strengthening enforcement of IP rights through:

• New powers and duties for Trading Standards to take action against infringement of copyright law;
• IP crime bring recognised as an area for police action in the National Community Safety Plan;
• Tougher penalties for online copyright infringement - with a maximum 10 years imprisonment;
• Lowering the costs of litigation - by using mediation and consulting on the fast-track limit. The Review acknowledges that prohibitive legal costs affect the ability of many to defend and challenge IP; and
• Consulting on the use of civil damages and ensuring an effective and dissuasive system of damages exists for civil IP infringement.

To provide support for businesses using the IP system the review recommends that:

• The UK Patent Office be restructured as the UK Intellectual Property Office, with recommendations for it to provide greater support and advice for businesses using IP domestically;
• Business representatives sit on a new independent Strategic Advisory Board on IP Policy, advising the Government; and
• Government improve support and advice internationally - including in India and China - to enable UK businesses to protect their investment around the world.

Finally, to ensure the correct balance in IP rights, the review recommends:

• Ensuring the IP system only proscribes genuinely illegitimate activity. The Review recommends introducing a strictly limited 'private copying' exception to enable consumers to format-shift content they purchase for personal use. For example to legally transfer music from CD to their MP3 player;
• Enabling access to content for libraries and education establishments - to ensure that the UK's cultural heritage can be adequately stored for preservation and accessed for learning. The Review recommends clarifying exceptions to copyright to make them fit for the digital age; and
• That the European Commission does not change the status quo and retains the 50 year term of copyright protection for sound recordings and related performers' rights.

This last recommendation has caused some controversy in the UK music industry, with recording artists such as Paul McCartney, Cliff Richard and Robbie Williams fronting a "fair play for musicians" campaign, which is calling for the extension of the copyright period on recordings and performers' rights beyond the current term.

In a humourous reading of the situation, KPMG Advisory Partner, David Eastwood observed in the firm's response to the publication of the Gowers review that:

“The music industry...will certainly be disappointed that protection of sound recordings has not been extended beyond 50 years – and at the continuing disparity with the US in particular, where protection lasts for 95 years. Buddy Holly will be turning in his grave!”

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