Written evidence submitted by the CBI

SUMMARY

1. We welcome this BIS Committee inquiry into the Hargreaves Review, and the subsequent Government response. In addition to our original response, which was formally submitted in March, we would like to set out our priorities for taking the report forward in light of the Government’s recent announcement.

2. The CBI supports the emphasis on IP and growth, in both the Hargreaves Review and the Government’s response to it. We believe that the approach on intellectual property should be to support growth in IP-rich businesses and create open and competitive market access to promote innovation. We are pleased that the Government has acknowledged this in its longer term IP strategy.

3. The Government’s acceptance of each of the key principles set out in the Hargreaves Review is an important milestone towards establishing a modern, robust IP regime in the UK.

DIGITAL COPYRIGHT EXCHANGE

4. We welcome the recommendation to create a Digital Copyright Exchange in the UK and the Government’s intention to conduct a feasibility study into the possibilities of this. We believe that this is a positive step which would help reduce transaction costs for large organisations whilst helping smaller firms gain legitimate access to content. Many of our members already have sophisticated digital platforms that could help build an exchange.

5. But this support comes with a number of caveats. It is critical that the shape of a Digital Copyright Exchange is led by industry and should be genuinely voluntary to participate in. Key issues to get right include:

· The system must not be governed by price controls; rights holders must retain the ability for differential pricing in different markets, including exports for example.

· Rights holders must retain the right to refuse permission for commercial re-use of content.

· The system must avoid "compulsion by the back door", where in the US for example rights registration is "voluntary" but it is a prerequisite of challenging breaches in the courts. So we are concerned, for example, that Digital Economy Act powers could only be available to those on the Exchange.

Fundamentally, the proposals must uphold the principle of rights-holders retaining control over their own content.

COPYRIGHT EXCEPTIONS

6. We are concerned about some specific measures in the Hargreaves proposal for copyright exceptions for both data mining and future proofing. Many of our members have experience of adapting their own copyright policies to take account of new digital technologies with great success. We are pleased that the Government has announced its intention to consult widely with industry on this, as this will ascertain whether new copyright exceptions are in fact needed or whether alternative solutions such as licensing can be found.

PATENT THICKETS

7. We also remain concerned about Hargreaves’ proposal to address patent thickets. Whilst we are in favour of action that would reduce congestion in patent offices and provide a clearer landscape for potential new entrants, we would urge caution on immediate action to address patent thickets and recommend that the Government engage further with industry to better understand the problem. We welcome the IPO’s intention to publish findings on the scale and prevalence of patent thickets by November 2011.

8. The CBI looks forward to working with you on these important issues to ensure that the IP rich industries can continue to play their part in the growth agenda.

September 2011