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

Conclusions and recommendations

Evidence-based policy

1.  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. (Paragraph 12)

Format shifting

2.  We endorse the approach taken in the Consultation on Copyright to the issue of format shifting. We expect this issue to be an early opportunity for a greater degree of evidence-based policy-making in the intellectual property area. Without wishing to anticipate the outcome of that process, we suspect that a copyright exception based on personal use or use within the private sphere might prove most practicable and justifiable. (Paragraph 36)


3.  Given the consensus that policy in the area of intellectual property should move forward on the basis of a better evidence base, we believe that before proceeding with a potential policy exception for parody there should be a closer examination of certain economic issues including, possibly: (i) the actual transactional costs involved in negotiating licences; (ii) the comparison between those costs and the anticipated benefits; (iii) how much creative activity is actually stifled by the current legal situation; and (iv) what proportion of parody cases might lead to an allegation of moral rights infraction, and what the costs of resulting disputes would be. (Paragraph 42)

4.  In its review of responses to the Consultation on Copyright, we recommend that the Government give due weight to economic data on the potential benefits and disadvantages of implementing a parody exception and take such data into account in its eventual decision. (Paragraph 43)

5.  On a possible exemption for parody, we are inclined to agree with the Government's proposal for a fair dealing exception, but with disapplication of the exception where there is reputational damage and subject to a robust assessment of the economic benefits. We recommend that the definition of unfair reputational damage should make provision to protect (within the exemption) genuine political and satirical comment supportive of free speech. (Paragraph 47)

Content mining

6.  We believe that policy on content mining should have regard to potential risks. Revenue might not provide the necessary investment to support data access and the successful UK scientific publishing business might be disadvantaged. However, policy should also recognise the potential benefits of content mining, the core contribution of researchers and the need for ready access. We believe that publishers should seek rapidly to offer models in which licences are readily available at realistic rates to all bona fide licensees and we encourage the Department to promote early development of such models. (Paragraph 65)

Orphan works

7.  We did not hear any arguments in favour of retaining the UK's copyright statute in its current form. This legislation was enacted before computers became commonplace, and needs rewriting. We recommend that the Government put measures in place for bringing up to date and consolidating the UK's principal copyright statute and related legislation at the earliest opportunity notwithstanding the likely need for earlier measures to reflect the recommendations of the Hargreaves Review. (Paragraph 77)

8.  The Enterprise and Regulatory Reform Bill paves the way for certain reforms to copyright including through secondary legislation. We understand that there is also a possibility of further measures requiring primary legislation being introduced in this parliamentary session, but that others might be delayed. We urge the Government to press ahead as soon as possible with measures to reform copyright where the case is made out for urgent change to support growth in the economy. We recommend that the Government set out a clear timetable for all such measures covering both primary and secondary legislation. (Paragraph 78)

9.  We support the development of an orphan works scheme provided that appropriate protection for rights holders is included. We agree that the Copyright Tribunal should have jurisdiction over licensing but we recommend that it, or an alternative body with appropriate powers, be given authority to block usage in instances of particular potential harm to rights holders or where monetary compensation might not suffice. (Paragraph 86)

10.  We recommend that evaluation of a potential orphan works registry include consideration of the need for author's rights of identification to persist over and against any waiver that has previously been made contractually. This might take the form of a presumed right of identification on the registry (notwithstanding any previous waiver) unless other factors apply such as the scope of the waiver itself. (Paragraph 89)

The proposed Digital Copyright Exchange

11.  We can see many potential benefits in principle to a digital copyright exchange provided that it makes best use of technology to avoid bureaucracy and the replication of existing systems. We conclude that Richard Hooper's review of copyright licensing options and a possible digital copyright exchange is an important stage in policy development and it is critical for that review to examine the costs and benefits of the possible models fully so that policy proposals are credible. (Paragraph 108)

Collecting societies

12.  We agree that statutory regulation of collecting societies should be a last resort. The collecting societies have accepted the need for change. We support the proposal to introduce regulation by way of a voluntary code backed up by the establishment of an ombudsman. (Paragraph 114)


13.  We welcome the review of UK design law being undertaken by the Intellectual Property Office. The present complexity of the design protection system in the UK might be acting as a disincentive to use and hence as a brake on innovation. If a revision of the law is called for by the industry, the Government should press forward with proposals for implementing a new and simplified structure of design rights following that review. (Paragraph 119)

Patent thickets

14.  Patent thickets are clearly an area that requires in-depth analysis. We therefore applaud the level of detail as well as the alacrity with which the IPO approached its initial study. Further work needs to be done to establish whether a proportion of increased patent filings has derived from the wish to support negotiating strategies. We look forward to hearing more on this from the further studies being conducted on behalf of the IPO. (Paragraph 127)

The proposed unified patent and patent court system

15.  It is clear to us and the European Scrutiny Committee that the Government's current negotiation strategy for a Unified Patents Court is not fit for purpose. As a matter of urgency the Government needs to take a firmer stand for UK interests in the UPC negotiations than was manifested in the recent evidence session held by the European Scrutiny Committee. In particular, it needs to set out clearly defined options for outcomes acceptable to the UK and a robust strategy on how to translate those options to an acceptable overall solution. Such a strategy has to clearly state the Government's position on avoiding European Court of Justice jurisdiction, avoiding the risk of remote and costly litigation for UK business, and neutralising or mitigating the effects of any bifurcation regime. Furthermore, that strategy should include a cogent argument for locating the central court in London and not one that relies upon hope and aspiration. Anything less runs the risk of undermining the competitiveness of British industry. (Paragraph 148)


16.  We applaud the work that is being done by way of informal approaches to intermediaries to discourage pirated content. Furthermore, the recent April 2012 decision of the High Court to insist that internet service providers block file-sharing by pirated content sharing sites is to be welcomed. We encourage the Government to press forward with bringing sections 3 to 16 of the Digital Economy Act fully into force, subject to proper review after implementation. (Paragraph 160)

Advice for SMEs

17.  We are impressed with the range of solutions that the Intellectual Property Office has developed to address SME needs in the area of intellectual property. This is an important area to address to support growth in the economy and we recommend that in its Response to this Report the Government set out in detail its commitment to this service in terms of money and resources. (Paragraph 167)


18.  A considerable amount of high-quality work on policy development has been undertaken in the year since the Hargreaves Review. It will be important to maintain that momentum alongside the more rigorous approach to policy formation that Hargreaves recommended. Conclusions are near to formation in many areas, and the Government should press ahead with measures to implement new policy in those areas as soon as possible. We recommend that the Department act swiftly to bring in legislation to that effect. (Paragraph 168)

19.  While we recognise that the Government is undertaking a major reform in a complex area, changes are both necessary and urgent. We therefore will expect the Government to set out its road-map for implementation, including a timetable for legislative action, in its Response to our Report. (Paragraph 169)

20.  We have major concerns about the proposed Unified Patents Court treaty. The treaty has the potential to offer great benefits to the UK but only if UK interests are protected. The Government's current approach does not provide a robust defence of those interests. We believe that the Government needs to reconsider its strategy and the capability of the negotiation team as a matter of urgency. (Paragraph 170)

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© Parliamentary copyright 2012
Prepared 27 June 2012