The Hargreaves Review of Intellectual Propert: Where next? - Business, Innovation and Skills Committee Contents

1  Introduction


1.  The Hargreaves Review of Intellectual Property was commissioned by the Prime Minister in November 2010 to consider whether the UK's intellectual property framework was up to the task of supporting innovation and growth. Its findings were contained in a report entitled Digital Opportunity, published in May 2011.[1] Many of these findings recommended further investigation before determination of policy ; first, because the inquiry panel had had only six months in which to produce its report; and secondly because one of the most significant findings of the Review was the need for more evidence to support policy making in the field of intellectual property.

2.  Following the Review, the Government published a response in August 2011[2] which largely endorsed Professor Hargreaves' recommendations and set out a programme of consultation and policy development to take place over the following year. The programme contained an impressively detailed set of timescales for developing individual strands of policy, and it is commendable that those timescales have been adhered to.

3.  Witnesses to our inquiry were invited to submit evidence on the recommendations of the Hargreaves Review and the resulting Government response, with particular reference to the overall strategic direction taken by the Hargreaves Review and the practicability of its proposals. We held evidence sessions on the proposals made in the Review in the latter months of 2011, following which, in late December 2011, the Government produced a Consultation on Copyright with a large number of greatly more detailed proposals.[3] Responses to the Consultation were received in March 2012, and the Government is at the present time considering how to finalise policies in light of those responses. As they are current, we have taken the options presented in the Consultation as the main starting point for discussion of copyright matters in this Report.

4.  Also in the period since our oral evidence sessions, the European Scrutiny Committee held its own set of evidence sessions on the proposed Unified Patents Court. As this was one of the topics we addressed, we have taken that Committee's more recent evidence into account in reaching our conclusions on the Unified Patents Court.

5.  As well as inviting written evidence to our inquiry, we held four oral evidence sessions: with Professor Hargreaves; with Professor Sir Robin Jacob, former Court of Appeal judge and Queen's Counsel at the intellectual property bar; with representatives of industry bodies and interested organisations; and with the Minister and representatives of the Intellectual Property Office. The Intellectual Property Office also very helpfully briefed us on the background to the subject matter in a preliminary private session. We are grateful to all those who gave their time to contribute to the inquiry.

6.  In line with the Hargreaves Review's recommendation of more evidence-based policy, we have confined this Report to areas on which we believe we can usefully comment based on the evidence available to us. In particular, we looked at the Review's proposals for opening up copyright exceptions as a means to stimulate growth, for new modes of copyright licensing, and at the position on matters relating to patents, enforcement and small and medium sized enterprises. In some instances it has not been appropriate for us to anticipate a detailed policy process based on full consultation and economic data. That is not to say, however, that we might not wish to scrutinise such policies at a later stage of their development.

Evidence-based policy

7.  The Hargreaves Review acknowledged that there were obstacles to greater use of evidence in the formation of intellectual property policy, identifying three main problems:

  • there are areas of intellectual property rights on which data is simply difficult to assemble; while patents are well documented, and traceable to their owners, unregistered design rights and copyright use are not;
  • the most controversial policy questions usually arise in areas (such as computer programs, digital communication and biosciences) which are new and inherently uncertain because they involve new technologies or new markets whose characteristics are not well understood or measured;
  • much of the data needed to develop empirical evidence on copyright and designs is privately held; it enters the public domain chiefly in the form of "evidence" supporting the arguments of lobbyists ("lobbynomics") rather than as independently verified research conclusions.[4]

The Review went on to refer to

The need for any machinery in this area of policy and public administration to be robust. This matters because there are strong and divergent interests in play and with some of the most skilful and influential lobbyists on the UK political scene.[5]

8.  We put this point about so-called lobbynomics to our witnesses. Sir Robin Jacob agreed that there were strong influencing bodies in the sector:

Nadhim Zahawi: Professor Hargreaves described IP as containing "some of the most skilful and influential lobbyists in the UK political scene and referred to 'lobbynomics'. From what I hear you are agreeing with that?

Sir Robin Jacob: Yes.[6]

However, John McVay of Creative Coalition Campaign disagreed that lobbyists had too much influence, and argued that lobbyists in the sector played an important role in informing "Government policy and, indeed, regulators' policy on various issues. We do that in good faith; we do it with a rigorous and transparent methodology."[7]

PRS for Music believed that an answer lay with more peer review:

One of the things we welcome in Hargreaves' suggestions was that […] evidence should be peer­reviewable. We work pretty hard ourselves to try to do objective research. There is no such thing as an objective choice of words; humans always come from a point of view. If it is peer­reviewable, then at least it can stand scrutiny.[8]

9.  Adrian Brazier, Head of Digital Economy Act implementation at the Department for Culture, Media and Sport acknowledged that there had been problems with the availability of evidence in connection with that Act:

It was somewhat opaque; the impact assessment was not based upon new evidence or new research that had been commissioned by us; we had no independent source of information. I think it would also probably be fair to say of the evidence that we had been offered by rights holders that they were unwilling, essentially, to lift the bonnet and let us see the engine: their workings and methodology.[9]

He added that "this was not a comfortable position for us necessarily to be in and if we essentially had to commission proper evidence first, we probably should have done so."[10]

10.  The Head of the Intellectual Property Office, John Alty, made the point that much of the evidential work on developing further policy was yet to come:

Inevitably the estimates that the Hargreaves Review produced were broad-brush. Where we are now taking forward the recommendations, we are in any case required to produce much more detailed impact assessments. That is what we have been working on over the last few months and so our plan, for instance, in the copyright area will be to publish a consultation with much more detailed costs and benefits. Obviously, part of the point of that is to consult people on the policy, but it will also be to get people's opinion on the strength of the analysis and of the cost benefit.[11]

11.  The Hargreaves Review has itself been criticised for lack of robust data to support some of its economic forecasts, notably in relation to the proposed Digital Copyright Exchange. UK Music was one of several bodies questioning the methodology of the predicted £2.2bn benefit to the UK economy from the Exchange, and it would appear from the lack of corroborative data that there was indeed an element of optimism in such estimates.[12] However, it should be noted that Professor Hargreaves' panel had only a short time in which to produce its conclusions. As acknowledged by the Intellectual Property Office, it will be an important task of those taking the work forward to provide that more extensive analysis. From that point of view, we welcome the Intellectual Property Office's confirmation that, "All the regulations and all the policy proposals for legal changes are going through the Regulatory Policy Committee."[13]

12.  We welcome the Hargreaves Review's recommendation of a more evidence-based approach to intellectual property policy development. Although we agree that certain estimates used to support recommendations in the Hargreaves Review might be criticised as optimistic, the Review itself acknowledged that further economic analysis would be necessary. We welcome the Intellectual Property Office's reassurances that more detailed analysis is on-going and trust that it will pursue that work and act on external criticism of data and methodologies. We also agree that the involvement of the Regulatory Policy Committee as an independent auditor of economic analysis is a sensible policy development.

1 Back

2 Back

3 Back

4   Review, paragraph 2.13 Back

5   Review, paragraph 10.9 Back

6   Q 87 Back

7   Q 203 [McVay] Back

8   Q 203 [Ashcroft] Back

9   Q 224 [Brazier] Back

10   Q 225 Back

11   Q 227 Back

12   Ev w165 Back

13   Q 230 Back

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© Parliamentary copyright 2012
Prepared 27 June 2012