On 2nd March, the Open Rights Group was invited to attend a seminar on the Gowers Review. The review, lead by Andrew Gowers and commissioned by the Treasury, is an extensive examination of intellectual property in the UK. We have been asked to submit written evidence and the seminar was the first step in that process.

I was there along with Rufus Pollock and we took as detailed a set of notes as possible. The text of Andrew Gowers speech has been provided by the Review office.

Overall, I think we heard pretty much what we expected to hear, particularly from the Patents panel. Industry was represented very well, alternative voices less so, but it was heartening to see Jill Johnstone from the National Consumer Council on the Copyright panel, putting forward the view of everyday people, and also Anthony Lilley from Magic Lantern who definitely has his head screwed on right.

Introduction and opening address from Andrew Gowers
Firstly, thank you to the SMF and to Microsoft for organizing this morning’s event. It is wonderful to see such a range of intellectual property experts. I’m not going to talk for too long as we have two excellent panels of speakers who I’m as keen as you are to hear speak. I want to briefly outline why I am standing here; what it is that the Review will be looking at and what we hope to achieve, and finally to discuss our call for evidence.

As you will know, the Chancellor has asked me to lead an independent review of the intellectual property framework and to assess how this framework operates amidst the challenges of globalisation and technological change.

To most audiences, at this point one might have to make a preamble explaining what IP is and why it matters. But that is hardly necessary today - for many of you, your businesses rely on IP. And indeed, our economy is increasingly driven by your knowledge-based industries. The creative industries alone accounted for 7.8 per cent of Gross Value Added in the UK in 2003 and grew by an average of 6 per cent per annum between 1997 and 2003 - twice as fast as the rest of the economy. IP has been in the news almost constantly, whether it be for Peer to Peer file sharing, RIM’s Blackberry, or most recently, whether Dan Brown plagiarised parts of the Da Vinci Code from an older best selling book. The sheer size of the economic contribution that IP makes, together with the complexity of these legal arguments demonstrates not only the intricacy of the IP system, but also the economic importance of knowledge and creativity. In short, an effective system of intellectual property rights is vital to UK competitiveness and productivity.

The UK can be proud of the successes of the knowledge economy; from the discovery of the double helix, or the invention of radar to the Beatles records, or even the Arctic Monkeys, the UK has a history of cutting edge innovation and creativity.

This knowledge does not simply create value for our economy. Knowledge has unusual properties that distinguish it from traditional goods - from physical property. To use economists’ terminology it is a ‘public good’. IP not only provides the private incentive to create new works, but because the award of IP requires creators to disclose the full nature of the creation or innovation, IP facilitates the public accumulation of knowledge. Books written now enrich our public domain decades, even centuries ahead.

Our intellectual property regime must be fit for the 21st Century; it must balance the needs of industries and artists to innovate and create, and the needs of rights holders to protect their inventions. It is was not the intended role for IPRs to prevent access to materials that are of no commercial value or to deprive inventors of information that will enable them to create commercial products. Instead, IP policy must protect the value of the knowledge that resides within goods and services whilst also recognising the value of the public domain.

The state plays a vital role in awarding IPRs, and consequently has a responsibility to enable businesses and consumers to use, license and exchange IP efficiently and proportionately. And the state is well aware of this responsibility. It has set up the Creative Industries Forum and the National IP Crime Strategy, and has asked me to take an independent look at the IP system.

I believe that this Review will be a unique opportunity to go back to the intellectual roots of intellectual property, but not as an academic exercise. We have an opportunity to rigorously analyse the operations of the UK system; an opportunity to provide practical recommendations that enable consumers and businesses to make the most of intellectual property.

I recognise that there are a number of issues which are of particular interest to many of you grappling with the complex IP system. Incremental reform has created an overlapping patchwork of legislation, making it difficult to navigate the system. Some of this complexity is necessary and inevitable, but some may not be. Survey after survey suggests that the knowledge among many businesses, and particularly among SME’s, of how to use the IP system to their advantage is low. The Review will consider the IP system in the round, to try to ensure that complexity, is minimised wherever possible.

Two enormous trends in particular have raised tensions in the current IP system - globalisation, and digitisation. Your businesses have greater opportunities to maximise the value of their IP abroad, yet are simultaneously subject to foreign competition in domestic markets.

Digitisation has radically lowered the cost of duplication, but also of distribution. Moreover, the increasing ease of copying text, music and video across digital networks has threatened traditional business models in several of the most successful sectors of British industry.

Part of the response has been the development of technical methods to make unauthorised copying more difficult, such as ‘Digital Rights Management’ tools. Clearly the way these tools are used is in its infancy, but when used judiciously they have a valid and significant role to play in the distribution of digital content.

These trends of digitisation and globalisation have ultimately changed the way that knowledge is created and transacted. The process of innovation has become ever more ‘networked’, particularly in high-tech sectors: a new invention typically involves more IP, and more firms collaborating to produce the end product, than 30 years ago. Indeed, as Charlie Leadbetter has observed, it is no longer just firms who are responsible for innovation - consumers themselves increasingly play a part in developing innovative goods and services.

In the creative industries, whilst there has always been a rich vein of works that have been inspired by previous artists - for example, Shakespeare took his best plots from Holinshed, now we perhaps live in what has been termed the age of “cut and paste”; for example, Madonna’s recent number one hit “Hung up” sampled an Abba song - “Gimme, Gimme, Gimme” - and indeed the whole genre of hip-hop is indebted to sampling.

Whilst there is truth in Newton’s dictum that we benefit from standing on the shoulders of giants, the intellectual property system must acknowledge the integrity of creative endeavour and enable artists and inventors to profit from the works that they create. The length of copyright is one element of that balancing act, and the review shall be examining whether 50 years is the appropriate term for copyright in sound recordings.

It has been suggested that there has been a rise in the number of companies that sit ‘defensively’ on patents with no intention of productively utilising the knowledge, waiting to litigate against infringers. The recent RIM/Blackberry action is a case in point. The phenomenon known as ‘patent thickets’; (whereby new entrants in the market find it impossible to research without infringing a complex matrix of patents) has also been a recent innovation in the way that IP is used. Whilst there may be an element of subjectivity in individual cases, both phenomena are perhaps bad news for firms that find themselves at the end of a costly lawsuit, but more also broadly, it may impact on innovation more widely, as other firms and individuals avoid potentially valuable research avenues in order to insure against the threat of litigation.

This brings me on to the issue of the costs of holding and challenging intellectual property rights. Securing patent protection in the UK, US and across key European countries typically costs £75,000 over the first 7 years once you have taken into account filing fees, legal fees and renewal fees. This does not include the potentially massive costs of enforcing or challenging infringement through litigation. This is a real problem that damages the balance in the system - everyone, including small and medium enterprises, must be equipped to enforce their intellectual property.

With the increasing pace of technological change in the global market, the Review will seek to provide a solid strategic foundation for the Government’s long-term IP policy, based on sound economic principles.

Whilst the review will principally focus on domestic concerns, we are of course operating in a system that has many important international dimensions. Indeed, the European Commission has begun to look at several aspects of IP. Therefore as well as looking to make recommendations for the UK system of intellectual property, including the operations of the Patent Office, we will also look to provide some direction at the international level.

As you know, the Review published the call for evidence last week. I invite you all to respond on the key issues of how IP is awarded, used, transacted and challenged, and to respond to specific issues, some of which I have mentioned today, on which I am aware there are strong opinions. The evidence submitted will shape our analysis and will enable me to make targeted and practical recommendations to the Chancellor in the autumn.

Please take a copy of it today. I am aware of its fairly hefty size and scope, but your contributions will be invaluable. If there are issues I have missed, please submit evidence on them. And if you have queries, or require transportation to get it home, please get in touch with the Review team. This is your chance to tell us about the copyrights and wrongs of the system.

Conferences such as this one are the perfect stage for constructive debate and discussion on the issues of IP. I would like to thank the SMF and Microsoft for bringing you all here today, and to hand over to our first panel of experts.

Panel One: Issues Around Patents
Chris Parker, Microsoft Ltd
David Rosenberg, GlaxoSmithKline
Sam Funnell, ARM
Professor Danny Quah, London School of Economics

Chris Parker, Microsoft
Looking forward to a lively discussion. Important opportunity to check that what we are doing is all we can do, and need to ensure that IP evolves to include new innovation and technology. When Edison found electricity, there was a debate about whether anything involving it should be allowed to be patented.

Patents encourage innovation. The system is not perfect, reform is needed esp. in the US. Number of improvements MS has made to improve the US patent law, e.g. improving quality of patents, ensuring better navigation worldwide, encourage more businesses to see IP as key to their competitiveness. In the EU, we believe that the system works relatively well, but no political will to harmonise. Want to focus on more small businesses to take up patents, as they are a key driver of the UK economy. Need to confront the myth that patents are there for big business. But they are an equaliser, let SMEs compete on the same feild of the big biz. Makes patents more attractive to VCs. Need to establish regime that makes patents attractive to SMEs. Want to see cost reduced, and educate smaller businesses about IP and patents. Patent Office does great work but more needed.

In UK, is there opp for small firms to take more patents by paying costs via a tax credit.

David Rosenberg, GlaxoSmithKline
Not going to disagree with Chris. Four propositions that are incontravertible

- more advances in tech than any other field, more since ind revolution. mind boggling advances.
- at not time since industrial revolution has restructuring of economic so great
- societal benefits of innovation are not equitably shared
- in EU we are falling behind other economies. why? that is vital to know but outside the review.

Quote from a summit last year

EU must breat out of the structures and expectations created by post war ear. Must change, to keep up with the rest of the world. Gap between rhetoric and reality of knowledge society.

Tinkering with IP system is tempting way to show we’re doing something, but it won’t make a huge difference, compared to the other policy issues that need to happen.

Few responsible people question the basis of the patent system but those who do do so loudly.

What are the purposes of patent? They are to facilitate innovation, and the system works pretty well. It feeds the goose of innovation, but it is not the goose that lays the golden egg. We need to think very carefully before we make substantive changes.

The IP system is used in differnet ways by different processes. Huge range of actors, so must be flexible enough to help wide range of actors, but certain enough to support business.

Need to adopt the p roblem and solution approach - need to know the problems before we come up with solution. Must be evidence based, not based on ideology, rhetoric, opinion. Have seen too little too little evidence based arguments.

Protests and death threats do not make for good policy.

- define the problem
- how pervasive is the problem
- what’s its impact in the real world

References to defensive patents must be discussed carefully, because what is defensive for one is essential for another.

Diverse responses, but care will be needed - because those who are happy will say nothing. Those who agree with the status quo are less vocal than those who are anti.

Weight of the post bag is not the same as the weight of the argument.

What is the impact? What are the benefits of the solutions we try to devise. If there are problems with the system, we need to know if there is a solution within the system or outside of it. Where the solutions do lie within the system, need to be aware of the law of unintended consequences. If we upset the balance somewhere, where are the rammification.

Considerations irrelevant to the system should not be accepted, e.g. political ones. Community patent, for e.g., couldn’t progress not because it was bad, but because of political issues.

Key to policy making in this area is fact-based analysis and consultation. Need joined-up thinking at EU level, need consultation, Patent Office works good, except where industry has problems with the outcomes.

Purpose of patent system is to facilitate innovation, but if we’re falling behind that’s not the patent system it’s structural. IP system should not be made a scapegoat for structural problems in EU.

Samantha Funnell, Chief Patent Counsel, ARM
Established in 1990, started by Apple and Acorn. ARM has a big IP portfolio of 700 patents, 175 in UK. Global presence. Global IP.

First company to license IP rather than manufacture and sell. Their IP is in lots of common products from 320 companies, e.g. chips.

UK patent system ok, not fundamentally broken.
Good
- first to file; no grace period; annual renewal fees’ discovery limited; no wilfulness; costs awarded; specialist patent judges
- absence of patent trolls

bad
- cost, esp at EPO; international inconsistency; economic impact; ‘a program for a computer’

Ugly
- standards and open source software (business abhors uncertainty, e.g. open source)

Suggestions
- comptroller to refer for clarificiation
- international co-operation on standards, patent pools and open source
- grants for SMEs for advice and international protection

Need to think of patents as an asset not a cost.

Professor Danny Quah, Economics Dept, LSE
Academic. Wants to give you two ideas, and a piece of evidence.

Ideas stem from recognising that IP involves striking a balance. In few other realms of economic policy discussion does balance come out so starkly. No one has any idea if we have the right balance. What are the two ideas that bring out this balance?

IP brings an incentive to create, when we are inside an IP rights system we are one of the players, and if we are at the creative innovative end, this is the part with thing about as well.

Standing outside the system, we need to think about the other side. Wanting to use or disseminate the products of the creative process efficiently for society’s use.

- support and enchance, aggretate innovation, growth and productivity
- needs of the few vs needs of the many; IPRs vs ordinary property rightrs; who are the stakeholders

Intellectual property rights are very different to ordinary property rights. IPR fit in some of the discussion of property, but not all of it, because knowledge are like a public good. Ordinary property rightrs are good for things that are not a public good, IPR protects things that look like public goods. Need this balance.

- Has the UK struck the right balance?

Not trying to be an advocate for one system or the other. One side says IP is critical for economic growth, that we wouldn’t have the progress we’ve had over last 200 years.

Danger is in the abuse of the rights system.

Empiracle evidence, case studies of Indian economy for over, 25 years 72 - 03. Was a right in processes not end products. Allowed the indian mfrs to compete in coming up with new processes that could end up with the same pharma product. If you protected the product then biz couldn’t do that. induced competition for creating new process. product is good, need them.

India experimented with this idea, and went from 0 to being the largest producer of some drugs. Competition with a well designed IP system resulted in immense growth. Would work out what the right balance should have been. This sort of competition resulted in gain to the consumer and producer and all parties involved in producing pharmacuetic als. Increase in economoy.

Compared to a system that protects products, not process. Produced more gains than the protecting products. (I think - not clear.)

Need to look at empirical evidence that illustrates proper trade off.

Questions from the floor
Chair: Stakes are high. Review gives us a rare chance to think of the review from first principles.

Gervase Markham (Mozilla Foundation): Several things that were said have an unstated underlying assumption that all patents are the same, that a patent system that applies equally to a number of different fields. It seems to me that there are very great differences to applying patents to pharmaceuticals, to manufacturing an automobile, and that at the end of the scale is software. The patent part of the Gower Review needs to take into account that anyone who talks about the patent system in general is not being specific enough and needs to think about what sort of system is required in different industries.

Jonathan Cornthwaite: Given the time it takes to get a patent, does the panel consider that the duration of patents is long enough?

Answer: MS guy. Mr Markham’s point is an interesting issues and in an nutshell he’s saying we need ’sui generis’, things of their own type, to deal with different things, like database rights, semiconductor rights. Should not have sui generis protection, or different standards for getting a patent for software or pharma. High hurdle you have to leap over in order to show that the real merits of your point but it’s an interesting one.

Regarding patent protection, this is the balance that has to be struck, and this is at the root of the Gower’s review. For most people most of the time, the patent period of 20 years sounds reasonable. Issues in health and pharma sector where you have to go through very complex regulatory safety regime, and that eats into the protection period. Although can get extentions to take account of that.

Sam: re Markham.
It’s not necessary to have different types of protection. Was quite involved in lobbying on the CII directive, and the arguments were against software were against the patent system more generally, and I would not be able to earn a living without patents so not going nto get me to change my mind. Software should be tested the same way as others - so much software would not be ‘inventive’ .

??London South Bank Uni.: Surprised and pleased that MS are championing cause of SMEs, and involved in spin-out companies. 75% of the costs of patenting arise in first 24 - 36 months, 66% of SMEs fail within first 36 months. Clearly important decision that has to be made, and Mr Gower could address this, in smoothing out that spike in the cashflow that lead many of them to go to the wall in the effort of protecting their IP.

Rufus Pollock, OKF: One speaker said that care must be taken not to go from the weight of the post bag to the weight of the arguments — and this is an excellent point. For what should always matter to us is the truth of an argument not the weight of lobbying for it. This is especially important because the real imbalance in the political economy of IP policy has always been that the interests of the general public, and interests of future innovators, have always been poorly represented compared to those of existing rightsholders. I would like to ask how the panellists think it best to organize the process of setting policy in relation to IP to address this. For example, the Adelphi Charter has put forward a set of principles specifically for this purpose and perhaps it would make sense to adopt them.

Isabel Davis, Law Soc.: Conscious of point that’s raising of cost. Enforcement cost in UK is more expensive than in EU, although steps have been taken, it still is a more expensive system. Does the panel have thoughts on this, particularly regards SMEs. Law Soc. wants to ensure system not damaged, whilst also trying to streamline it and make it more cost efficient.

Chair: want a system which works well, but which is cheap.

Rosenberg: Cost issues is balance between cost and quality. Concerns that the costs are too high, and concerned that the answer is to reduce cost, but that will reduce quality. Might be along lines of tax credits, legal aid. For a company like ours to spend a lot is justified because we have the money, but there must be a way of mitigating (??) the system. Legal aid or tax credits are important. Cost might be high in terms of and SME, but patents aren’t more expensive than anything else. This is an access to justice system issue that is wider than patents.

Yes, I think there should be some form of legal aid or tax credits, to help with cost of acquisition. Issue has to be addressed.

Don’t have an answer about taking the public interest into account - no such thing as ‘the public interest’ as there is a range of stakeholders. Social welfare costs and benefits to the economy, but if there hadn’t been a patent system there, what would have been the social cost to the system? I am in favour of Ipac, which didn’t work as well as it should have, but there should be full consultation structures in place, including the public, although I don’t know how you represent the public.

Sam: Experience in private practise is that quite often people are strapped for cash. There is no real balance, but go back to grants. They work in Finland, Spain. Question for Danny. I understood that the Indian drug industry was based on generics, do you know how much the R&D cost?

Danny: R&D has changed dramatically over last 30 years. Big pharma cos in India now cost as much on litigation as on R&D. It is true that what they were doing was playing off IP that had been put goether in other parts of the world, but had we known ahead of time, could have gone back and compensated other companies to the tune of what they could have gotten anyway, so there would have been no change.

Gavin: FFII. We campaigned against CCII, software patents. Have two patents, US software patent, and the EU patent, and the text is identical which gives some indication of the way in which Europe is moving towards the US. Currently we don’t have a harmonized European but this is on the cards now with the Community Patent. So long as contested patents are brought to national courts there is at least something preserving a reasonably high standard — the gate is high enough to keep a full blown software patent system from developing.

The fundamental problem is that the EU patent office doesn’t conform to separation of powers. There is also a lack of accountability in terms of how it sets innovation policy. Judge Robin Jacobs stated publicly that ‘the system stinks’, and was not kind to the EU community patent proposal.

On the software patents directive we campaigned in order to represent UK companies whose original work was found to be patented by larger players, who could not bid on contracts, and to represent the OS and proprietary software companies who feared the impact of software patents on their businesses and innovation.

Finally in reference to one of the panel members who mentioned Edison, it is worth remembering that Hollywood is in Hollywood because the film industry had to get away from Edison.

MS: Not sure there was a question although you had a lot to say. On a couple of points. you made the comparison between the US granted patent and EPO patent. One answer to that is that maybe it’s a very good patent? Doesn’t mean that there’s anything inherently wrong with it.

Your point of view is that you and your organisation, feel the balance has been incorrectly struck. The fact that we’ve had a system in place for 250 years has worked reasonably well. Prof. Quah talks about the patents sparking enormous growth after the industrial revolution.

Sam: Firstly on CII was that the best thing happened, in that it went away. The Open Source community should try to challenge stupid patents, rather than take the patents on. But we live in an heterogeneous world, so don’t just want OS software, or MS. So we want OS to work unfettered, and I believe compulsory licensing is the way to go.

Becky Hogge: Small point, about the mix of the panel. Three reps form major companies, yet we’re talking about SMEs and their access, so if we’re at this early stage talking about grants, then I think despite the reps happiness with patents, we need to be looking at the patents system at a deeper level.

???: When Jacobs said that the system stinks, he meant that some bad patents get granted. So it’s the certainty of the validity of the right that’s important. That’s at the heart of how you manage investment.

Chair: Lot of the presentations show that the international environment is important. How much should the review think about how the UK can influent the international patent environment.

Rosenberg: I think that the international ip system as represented by Trips is pretty good. It has a lot of flexibilities that many countries ues. To address these issues at an international level we need to get to really detailed analysis of what is the problem, what is the solution, and what are the rammifications.

Sam: US patent system is the most important to ARM, so everything is patented there. Only sue in N California and E Texas. Would love to see the UK influence the US to perusade them that certain aspects of the patent system needs to change. An awful lot of our efforts are sucked up by the US, even though we are mostley a UK company. Cannot ignore international aspect.

MS: Obviously MS is US based, and are always on the other end of patent infringement suits. MS is very much in favour of reform of the US system. Our General Counsel gave a speech calling for reform last year, to bring it up to international spec, e.g. to bring in first to file.

Panel Two: Issues around copyright
Jill Johnstone, National Consumer Council
Anthony Lilley, Magic Lantern
Emma Pike, British Music Rights
Jonathan Cornthwaite, Wedlake Bell Solictors

Jill Johnstone, National Consumer Council
Mission to help everyone get a better deal by making the consumer’s voice heard, through research, analysis, campaigning. Remit: to represent the interests of disadvantaged consumeres.

IP is there to achieve balance. Consumers achieve an interest in seeing innovation encourage. Also have interest in competitive markets. IP has monopoly rights which will lead to costs.

Balance is not being achieved, consumer rights being eroded by rights holders.

Three issues we’d like to see the review address

1. Apporpriate balance between private rights and public access
2. Clarification fo consumer of fair uses rights

Go back to the rational of IP rights. Not just protecting investors but expanding knowledge and innovations available to society. Makers have always put in place limits, however over the year. Scope has been increased, e.g. to database. Evidence for this has been weak. Need more evidence so we can move forward to the next developments on copyright law. Need independed assessment of costs and benefits to society as a whole.

We are against extension unless it’s in the public interest to do so. Believe default should be no change unless clear evidence for it. Copyright terms need to be reduced rather than extended.

Digital revolution has changed the wider understanding of what constitutes ‘fair use’, the rise of P2P and legal action against individuals and DRM has lead to a lost of trust. Need to enshrine fair use rights in law.

At EU level, working with BEUC on various campaigns, but also issues around UK legislation. Haven’t implemented all the options that are available in EU directive.

3. proportionality. Number of problems for consumers, ranging from unreasonable constraints, adverse impacts on use of computers, ridden roughshod over consumer and data protection law

We feel we need some sort of regulatory underpinning for the role of DRM, and anti-circumvention protection should be restricted.

Rise of legal actions against individual consumers is worrying. Concerned about the huge pressure to try and increase criminal sanctions in this area. Want revew to look closely at the justification for use of criminal sanctions, and the use of civil actions.

Anthony Lilley, Magic Lantern Productions (Vice Chair of PACT)
Start with a plee for popsitivity. I find it dibilitating that we use the word ‘protect’. Head of an SME, we innovate. Work with new digital media, am a copyright creator and run a company full of copyright creators, and we work with peopel like Channel 4 to understand how they can use their IP.

We could usefully learn is that part of the purpose of property is that you can enjoy them, not just build a fence around them. IP can be made to work for benefit of both creators and consumers.

Context. Creative industries have gone through three phases

1. Patronage
2. Craft phase, you create something and sold it as a retail model.
3. Professionalized model (mass production). need new model for financing.
4. phase is neetworked with the people formerly called the audience. people contributing, using content in different ways. 4th or 5th estate if you wish

World is trying to manage ubiquitous content, not just pretect scares content. My thing is, if I want some content I can find it, but is it legitimate, authentic, legal, any good?

The world of ubiquity is different to that of scarcity. Copyright has most of the tools we need legally. Copyright has been a bit of a gentleman’s club, if you can cope with the cost of clearing, have the skills, know where to ask, it’s a stable system.

In a networked wworld where the audience is active it doesn’t work so well. This is nothing to do with piracy. The shadow hanging over the copyright debate is that to solve piracy we work on a war footing. Most societies do not operate on a war footing all the time even if they are at war some of time.

On the board of Createive Commons, but these ideas don’t conflict - trying to find a balance. Not about if something damages profits of a large company that that’s good for consumers.

Rhetoric only goes so far. Believe the RSA Adelphi Charter - burdon of proof is on the advocates for change. Just because profits might be damaged, doesn’t mean that there’s a need for change. Mustn’t get there through idiolocial posturing.

A few specifics before I close: Major issue with copyright is not structure it’s the cost of running it. Designed for professional world. MySpace.com bought by News Corp. 76 Million users, mostly under 25, with personal pages of videos, pictures etc. People express their identity. In one way, it’s expression, in another it’s mass breach of copyright.

Can we make the model flex.

DRM is not necessarily a bad thing, but some DRM seems to circumvent the policy made by public institution by way of private contract law and that’s a democratic issue. The French are looking at that as an issue. How far does public and private life overlap? What happens when public funding is used? That’s a euphamism for the BBC. How do we get maximum public benefit back and how do the rights of the private producers balance with the public’s

Will know when we’re getting this right or wrong because the system will show us.

The problem with piracy is that the industry hasn’t provided an alternative. We need to keep an eye on what’s happening as an indicator as to whether we are getting the balance right.

Emma Pike, British Music Rights
We’ve moved on from 12 months ago. IP is the currency of the knowledge economy and should look at how we respond to digital and global pressures. Welcome terms of reference of the Gowers Review show that the debate has moved on.

Want to tackle Anthony. Do not agree that copyright is some sort of blunt instrument. Copyright at its most basic gives rights to individuals, and the current system works very flexibly.

Arctics Monkeys came up with an innovative way to promote themselves: release material online free, tour, get very popular. And it’s all possible under the current copyright framework.

Three areas to touch on today.

1. Question of whether the law is still in line with what consumers are actually doing with their music. Short answer is no. The law is not in line with waht consumers are doing. Has it ever been in line? I think that a lot of peopel have mentioned recently that it’s absurd that it’s technically illegal for consumers to copy their CDs on to their iPod. But it’s the same issues as making a tape for the car. It’s always been illegal because there is no private copying exception. There is quite a strong desire amongst lawyers (I’m one of them) to tidy up the law so it reflects what people are doing. But we have to be careful. In most countries private copying right is accompanied by a levy. They are currently extremely unpopular in Europe, and not sure consumers like them. Need a close look at what consumers are doing with their music, how they access it, and how we can update the law and more likely how the industry should update their business model. Not sure how this area is changing and need to find this out.

Changing the law is not the answer. The main thing that upsets consumers is not that it’s illegal, but that in some very limited examples copy protection is stopping consumers from copying anything. It is not article 2.3 subsection blah that is preventing this it is copycontrol. Perhaps we shouldn’t be changing the law but put together a voluntary code of practice.

Rather than refering to consumers as a vulnerable, they are in the driving seat.

DRM has become synonymous with copy control, and it’s not the same, and it’s only a tiny part of DRM. DRM is about making systems operate. DRM is in a cash machhine. It’s about tracking music usage so that the correct songwriters and artists get their royalties. Need to seperate that out from copy control.

Lastly, I think most importantly, it would be great if this review could give added impetus to the copyright education and awareness that the government is already doing.

Education is going to drive the partnerships between different sectors that will drive the knowledge economy in the future. There is already a huge amount of work being done. For example I know Anthony was part of the IP Forum which produced the CREATE principles, and the Patent Office. James Parnell and Andrew Davis are organising a seminar for getting awareness of copyright into the curriculum, and this is more important than anything that the Gowers Review can do.

Jonathan Cornthwaite, Wedlake Bell Solicitors, IP Lawyers Association, SCL
American have an expression - if it ain’t broke, don’t fix it. I don’t think that UK copyright law is broken, it’s a sophisticated and well drafted instrument but it’s not perfect.

Numbers of areas where it could be improved.

1. Copyright and database right. Law is in a muddle. Two tier protection, copyright is the upper level, database is lower level for a shorter period where there are databased that have had substantial investment. problem is that judgements in ECJ showd that the scope of database right was narrower than thoughts. Risk is that databases can now fall between the two stools, Can’t qualify for copyright or dtabase rights. EU Commission evaluated it and admitted it’s not right. Discouraging database production in the EU as oppsed to America. Currently consultiung.

2. Enforcement of anti-piracy legislation. It’s been 11 months since report on IP crime. When is the government going to include new criminal offences, e.g. camcording a film in a cinema. Need a co-ordinated response by national and regional agencies involved. IP Rights Enforcement Directive of 2003, but it’s only civil — somehow criminal remedies fell overboard. Government should lend support to rights enforcement, outlining national criminal laws across the union.

3. Electronic rights management information (RMI). Info which identifies the work. Civil rememdies for people who interfere with this. Need criminal sanctions for deliberate misuse of RMI.

4. Liability for on-line copyright infringement. ISPs exempted from liabilities. Other intermediaries who want this exemption. Some members states have extended these exemtpions. DTI has been consulting. Not convinced that these exemptions should be extended.

5. Copyright and television programme formats. Enormous commercial importance. Problem is legal protection is uncertain. Copyright protects the expression of the idea, not the idea. High profile litigation regarding programmes like Who Wants To Be A Millionnaire. Need a sui generis right. Law commission looked a while back but perhaps need a new look. In the last month alone there have been two brand new IP rights, e.g. artist resale rights and moral rights.

Questions from the flooor
Chair: is extension to 95 years justified.

Emma Pike: is a 45 year discrepency between the US and the EU. We need to look at the evidence as to the implications of that descrepancy actually are. Case for looking for this, because performers are living longer and it seems a little odd that after fifty years they no longer recieve royalties on their sound recordings. So if you create a recording at 16, then at 66 exactly when you need your pension, the royalties stop. Needs to be evidence based, and it needs to be good for consumers, the industry, the artists.

Jon C: Generally a bad idea when there are big discrepancies. This one really disadvantages creative performers rights holders in EU than in US. A big disincentive for creativity in the europe. I would be in favour of increasing the duration of copyright term.

Antony: there is some evidence that the terms are all too long. The argument should not be ‘ it’s longer there so it should be longer here’. I find it hard to have sympathy with the 66 year old guy - if he he’s making money over 50 years, hasn’t he made enough? It is hard to feel sympathy for Ringo Starr.

Jill: Agrees with Anthony.

Tom Rivers: ACT (Association of Commercial Television) Author’s widow was the last person to benefit from the extension of terms of copyright, because the rights would have been transfered to the exploiter, i.e. the publisher. So different between rights and interest of those who exploit material, and those who create. The rights of performing artists are transferred to the recoreding industry who exploits the recordings. There is no reason why in the contractual arrangements made between the record industry in the one hand and the artist on the other, that the lables shouldn’t be not allowed to pay royalties for any period they like. It has nothing to do with the rights given to the artists as legal provision.

In terms of the discrepancy between terms, it’s important that there should be convergence at an international level, and that is what hte WIPO process aims to provide. Historically there is little evidence that differences bretween provisions betwen differen countries has littel effect.

UK didn’t incorporate moral rights til 1988, US didn’t join Berne til 90s. Could panelists epxlain why there should be a difference on this.

Will Davies IPPR: Wanted to raise points that the reason we need a robust IP regime is because it provides a framework for innovation, applies for copyright as much for patents. Campaign mobilised by the music industry has no economic basis and does the rest of the copyright industry a disservice. We don’t need new rights for stuff one 50 years ago.

Is copyright an incentive to innovate and nothing else? If there is anything else then what is it?

Jonanthan C.: yes, it is an incentive to innovate and for talen to be encourage and disseminated to as wide a public as possible. Without a safeguard for those rights the encouragement for those rights those incentives would wither away. Need IP so as much information as possible can be dissemintated to the public as possible.

Emma: Yes, it’s an incentive to innovate, and it’s about remuneration of creators. Royalty income is all about individuals who spend their days writing songs get paid. All I’m saying on term extension is that it needs to be evidence based.

?? Comment on the idea that everyone earns as much as Ringo Starr. It is true to say that 90% of the muscians in this country are on a very low wage, so you can’t necessarioly say that 50 years is long enough. Some opinions are fashionable but entirely misleading.

Someone also said about contractual law that you could just extend royalties without copyright extension. But that doesn’t work because competition would punish anyone who did so.

Misleading information - there is an aboslute right that is unassailable to earn 50% of public performance and broadcast, and is not in anyone’s hands other than the performer so they can earn from the fruits of their labours til the end of their life.

Creative individuals are not necessarily teh best manager of their own finances. Looking after pensioners is not number 1.

Sarah John from EMI: would echo all the points Alison has just made on behalf of all here independent members. When you have a company of any size in the music industry, your job is to use those sound recordings as vigorously as possible and the point of investing is to enable them to be used and to generate revenue. We will proide evidence of how money we make on our catalogue is used to invest in the artise of the futre. there is a complete links between artists of the past and the artists of the future.

Met with an MP with Ian Anderson of Jethro Tull. “I’ve made 40 albums, some owned by EMI, some by me, and if those 40 albums make enough to money to pay for the teas and coffees then that’s good because it means that the artists of the present don’t have to pay.

Anthony Lilley: that’s the really hard challenge. it’s how systemic innovation works here. There’s an evidence problem again. Sure there are lots of people who aren’t earning much money from music, but will term extension earn them any more.

BPI: there are musicians that would benefit from term extension. There are thousands, not just Ringo Starr but also sessions musicians who produced the sounds of the 50s and 60s, and we are still paying them broadcast royalties, so yes, there are people who would benefit straight off from that.

Laurie ? European Publishers Council: It’s terribly good that it gives the opportunity for all stakeholders to talk together. Important that the law, copyright in particular, doesn’t become the scapegoat for the frustrations we’ve had in developing business models that consumers want. It’s actually te time taken to develop business models. when we talk about fair use/dealing, and exceptions, we must differentiate between different sectors. all of this comes under Berne (the 3 step test). Exceptions shouldn’t conflict between normal commersical expectations. So different issues for different industries. Wrong to take a one

Suw Charman: Creative Commons point. 50 million CC works. Don’t always need copyright to produce creativity. Example of Cory Doctorow demonstrates that you can also make money.

Becky Hogge: CC has been mentioned. IP is the currency of the knowledge economy but are we creating new models that have a lot to offer such as open source and creative commons. Are we considering them in this review? Would the collecting society work together with these other models to make them more economically feasible.

We talk about term, but can we also talk about scope especially in relation to derivative works.

Andrew Gates: Problem that will be differnet from copyright and patents, and it concerns education, and it’s the value of knowledge that resides within goods and services. How do we persuade people that they need to respect the nuances within copyright. Performers from authors, broadcasters from musicians etc …

Jill Johnstone: Scope. Need to look carefully at it too. Consumer education: difficult to explain the copyright regime to consumers. Use iPod example and consumers think you’ve gone mad. Need a simpler law and a law that makes sense. Law is there to serve society, and it’s very hard to perusade people to respect something if it looks mad. You also have to start with valuing creativity. IP is not an end in and of itself.

Emma Pike: Start teaching IP as a business skill. That’s how you disseminate a better undersatnindg. If you have a classroom of pupils, look at all the things that go into, say, a film, then you’re teaching them about bundles of rights and how you exploit them within something nad I thinkt hey find that more interesting and relevant.

Ted Shapiro, motion picture association: Creative Commons is copyright. What’s great about the UK copyyright act is high level of flexibility. If you’re like Cory and want to give away you work for a pittance that is up to you but if you are already selling tshirts you don’t. Keep hearing a reference to fair use rights. That is a test applied by courts to see if there is a fair use. Mixing differnet ideas, that’s strange. Are UK consumers ready to pay levies.

Rufus Pollock: Mary Beth-Peters, the register of the copyrights in the US, has said that Congress made a mistake by extending the length of copyright in America, calling the term “too long”. If we are so concerned about harmonisation should we not persuade the US to reduce term rather than seeking to increase ours?

Jaime Stapleton (Arts Council): Balance. The way that balance is that is discussed is always public/private, but another issue with is not addressed. Push and pull factors - copyright is a push, but the pull facotrs are competition. Innovate or die.

On the one one hand that copyrights and patents are deliberate impediments to competition, to allow return on investment. No need for governments to protect innovation or die, becuase ths’at’s a natural part of the marketplace. Policy dosn’t seem to address the pull factors.

Marice Cumber, OwnIt: Interested in education. Motivation for education for small businesses, not just school children. Also education for lawyers.

Barbara Stratton (CILIP): Access to information. We support copyright. Fair dealing. Ecceptions for libraries. But lots of unintended consequences. Huge costs: 98% of current available archives will go back into copyright if you extend the copyright. will make more works orphaned. Has effects on conserving national memory. this all has to be considered too.

Antony Anderson (Naxos): most recordings aren’t actually available. Extending to 95 years will make a lot more content unavailable.

Gavin Hill: Rather than IP lessons in schools, i would like to see lessons in economics. I would rather see policy made by economists than by lawyers and rightsholders. We need evidence based policy not faith-based policy. Otherwise we will have creationism rather than creativity, scientology rather than science.

??: Is copyright a sledgehammer, a crowbar, or a manicure set.

Becky Hogge: CC comment is about collective society. Societies won’t collect for CC licence works. This is a big problem.

Emma Pike: Mentions orphan works stuff in the US.

[At which point, laptop batteries die and we miss a last couple of short comments by the panel.]