Select Committee on Culture, Media and Sport Written Evidence

Memorandum submitted by The Royal Society for the Encouragement of Arts, Manufacturers and Commerce (RSA)


    —  When assessing the impact on the creative industries of new technology, there should be an acceptance that economic and social benefits of creativity and innovation are best served by shifting the balance of intellectual property (IP) protection away from rights holders towards consumers.

    —  The use of Digital Rights Management (DRM) technology acts against the public interest by unnecessarily restricting access to creative output.

    —  The principle behind the Creative Archive is very much to be welcomed—people and organisations should only need to pay once to access material produced at public expense. But the full benefits of this approach in promoting economic activity will be lost if DRM technology is deployed too widely and if the prohibition against commercial exploitation of the content remains in place.


  I am delighted to make this submission to your timely inquiry on behalf of The Royal Society for the encouragement of Arts, Manufactures and Commerce (the RSA). The RSA is an independent, non-aligned, multi-disciplinary registered charity with over 22,000 Fellows.

  The encouragement of learning and creativity has been the fundamental aim of the RSA since its inception in 1754. The creation, protection and utilisation of bright ideas is critical to this, as the RSA recognised when it drew attention to the parlous state of the country's Patent laws in the 19th Century and continues to do so with its various projects today.

  One such project, the Adelphi Charter on Creativity, Innovation and Intellectual Property responds to a profound challenge of the 21st Century: how to ensure that everyone has access to ideas and knowledge, and that intellectual property laws do not become too restrictive.

  The Government's appointment of Andrew Gowers to review the UK's IP framework is a unique opportunity to examine the fitness for purpose of this country's complex IP protections. Spurred by the challenges presented by new media and new methods of content distribution, this should be a root and branch review from which some basic principles of IP management and reform are established. Such principles would provide a coherent basis for the further development of IP laws, in which the balance between rewarding and encouraging creativity and protecting the public interest is properly maintained.


  Managing the ownership of ideas is crucial to any country's economic and creative success—it shows that speculative effort can be rewarded and encourages innovation. The contention of the RSA Adelphi Charter is that today's intellectual property laws often fail to serve the public interest, and regularly work against it.

  In the case of the availability of pharmaceutical drugs in the developing world, for example, the interests of large corporations are in potential conflict with a clear public health emergency. And yet this is only the most high-profile example of the public interest being done a disservice—in music, for example, access to the creative genius of generations is increasingly restricted to serve the interests of large recorded music corporations, not the young artists of today.

  Drawn up by an international commission comprising distinguished scientists, artists and legal experts, the RSA Adelphi Charter, launched in October 2005, sets out new principles for copyrights and patents, and calls on governments to apply a new public interest test to any systemic change. The charter calls upon national governments and the international community to adopt the following fundamental principles:

    —  The purpose of intellectual property laws should be to enhance creativity and innovation.

    —  Governments should ensure their IP laws serve as a means of achieving creative, social and economic ends and these laws must not take priority over basic rights to health and education.

    —  The public interest requires a balance to be struck between the monopoly rights implicit in intellectual property laws and the free competition that is essential for economic and creative vitality.


  The Charter is predicated upon a public interest test, which requires that:

    —  Intellectual property protection must not be extended to abstract ideas, facts or data.

    —  Patents must not be extended over mathematical models, scientific theories, computer code, methods for teaching, business processes, methods of medical diagnosis, therapy or surgery.

    —  Copyright and patents must be limited in time and their terms must not extend beyond what is proportionate and necessary.

    —  Government must facilitate a wide range of policies to stimulate access and innovation, including non-proprietary intellectual property models such as open source software licensing and open access to scientific literature.

    —  Intellectual property laws must take account of developing countries' social and economic circumstances.

    —  There should be an automatic presumption against extending intellectual property laws. The advocates of change must demonstrate why their proposals are in the public interest.


  There are two aspects within the Committee's terms of reference that are of particular interest to the RSA, which I shall address in turn: the impact of Digital Rights Management technology and the matter of the BBC Creative Archive project.


  You specifically ask "what steps can or should be taken—using new technology, statutory protection or other means—to protect creators" in respect of the dissemination of their creative content.

  The relevant protective measure here is the increasingly widespread use of what have become known as DRM technologies. Their growing prevalence is a concern for the RSA not simply because of what such technologies are capable of in the abstract, but because that prevalence risks becoming self-continuing—the more a company becomes dependent on the restrictive power of software to ring fence access to content, the more it will invest in ever more sophisticated mechanisms for doing so. Given the Adelphi Charter and the RSA's presumption that there is an economic upside if systems of access to knowledge are as free as possible, this proliferation is clearly a negative development.

  This is also the view of the National Consumer Council (NCC), which believes proliferation would undermine consumers' existing rights under consumer protection and data protection laws.

  The NCC, which has campaigned against the proliferation of DRM use by copyright owners in the recorded music sector, goes so far as to challenge the traditional view of consumers as being at the end of a value chain merely being supplied a range of products. The NCC makes the point that this view ignores the range of ways in which value is created in a modern knowledge-based economy—"and the role consumers can, and do, play in innovation and the co-creation of products and services".


  The second specific point within your terms of reference on which we hold strong views is the issue of the BBC-led Creative Archive project and the extent to which the balance of rights holders and consumers is out of kilter. Our view is that a lot more needs to be done to ensure that in the rush to update the IP legal framework for the digital age, the interests of consumers and citizens are adequately represented.

  The Creative Archive is a project whose rationale strikes the RSA as hugely worthwhile; it registers the fact that publicly funded creative output has already been paid for by consumers/taxpayers once and should not therefore be charged for again through copyright licensing arrangements. It also, regularly throughout its publicity materials, states as its aim the promotion of new forms of creative endeavour.

  For both these reasons, the RSA consider the Creative Archive licensing arrangements to be very much a step in the right direction—and a model we would like to see replicated across other forms of publicly funded information.

  We have two concerns on this matter, however, reflecting the view that, at least in its implementation, the Creative Archive concept does not go far enough. The first relates to DRM technology, which—as we have indicated above—was used extensively in the Creative Archive pilot; to ensure that the terms of the licensing agreement through with the Creative Archive is accessed are complied with.

  Our second concern is based on the prohibition of the commercial exploitation of material within the Archive, which seems to us to undermine one of the central benefits of any liberalisation of the IP legal framework—that it would promote new forms of economic activity that would comfortably outweigh the initial cost. The RSA is in the process of commissioning research that will quantify this opportunity cost and I will revert with additional information when it becomes available.


  Despite these caveats, the concept of publicly funded material not needing to be paid for twice is immensely important and is one that should be replicated across different forms of public sector information.

  A clear example of this is the use made of weather data, which the United States Government makes available to anyone at the cost of reproduction. The information may be provided for free, but a thriving private weather industry has sprung up that takes the publicly funded data and then adds value to it. In the UK, such data is sold on at a premium under Crown Copyright.

  One study estimates that whereas Europe invests €9.5 billion in weather data and gets approximately €68 billion back in economic value—a seven-fold multiplier—the US invests twice as much (€19 billion) but gets a return of €750 billion, a 39-fold multiplier.

  I attach a briefing note covering RSA's views on this subject in more detail that I trust you will find of interest. I also attach a full copy of the Charter itself for your review. (not printed here)

28 February 2006

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