March 14, 2006 | Suw Charman Anderson

Gowers Review Seminar notes

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