Gowers Review of Intellectual Property

At the Enterprise Conference on 2 December 2005, the Chancellor of the Exchequer announced that, as part of the Pre-Budget Report 2005 package, he was asking Andrew Gowers to lead an Independent Review to examine the UK's intellectual property framework.

The Open Rights Group has been formally invited to participate. We are currently drafting our submission and wish to include your thoughts and opinions. We have reproduced the Call for Evidence below and invite you to contribute - just hit 'respond' next to the paragraph you wish to comment on.

Many of the questions asked by Andrew Gowers in this review are very focused, but you should feel free to comment on the issues and the wider implications rather than feel obliged to provide specific answers. If you want to talk about issues not raised by this call for evidence, please do - just leave your comments on the Introduction.

this site was built by
Open Rights Group
based on a template by
mySociety.org

Introduction

The UK’s Intellectual Property framework, both in legal provisions, and in the operations of Government, is a critical component of our present and future success in the global knowledge economy. Our economic competitiveness is increasingly driven by knowledge- based industries, especially in manufacturing, science, and the creative industries. The creative industries alone accounted for 7.8 per cent of Gross Value Added (GVA) in the UK in 2003 and grew by an average of 6 per cent per annum between 1997 and 2003. (DCMS Creative Industries Economic Estimates, DCMS (2005))

Intellectual Property protects the value of the knowledge that resides within goods and services. IP is one way of giving incentives to people and firms to invest resources in creative or inventive activities ranging from Pharmaceutical R&D to television documentaries. The IP system is made up of a small number of flexible instruments (copyrights, patents etc.) that are broadly adapted for creations, inventions, designs and product identifications. Whilst these statutory monopolies provide the incentive to invest, they are strictly limited to balance their costs: principally limited competition, high prices, and limited ’spill-over’ benefits of that knowledge. The state must ensure that this balance is appropriate. Equally important is the state’s role to award IP efficiently, and enable the market to use, licence and exchange that intellectual capital. Finally, it must ensure that IP owners can enforce their rights through both technical and legal means.

Globalisation & technological change have both raised tensions in the existing IP system. UK firms have greater opportunities to maximise the value of their IP abroad, and are simultaneously subject to foreign competition in domestic markets. Digitisation has radically lowered the cost of duplication as well as distribution, and 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, than 30 years ago. Indeed, in many areas it is no longer just firms who are responsible for innovation – consumers themselves increasingly play a part in developing innovative goods and services.

While it has been suggested that the present UK system strikes broadly the right balance between consumers and rights-holders, it also appears that there are a variety of practical issues with the existing framework. For example:

Some responses:

  • I'm very skeptical of idea of people protecting their copyright by "technical" means. If this is referring to them ...
  • Call me cynical but put simply: "Developing" countries are "catching up" with "The West" technologically. "The West" responds by creating "IP" ...
Leave a response and read 2 »
  • Past legislative reform has resulted in a highly complex IP system. While a degree of complexity is inevitable in a system covering a wide range of products and innovations, aspects of the system appear to have become increasingly opaque. There may be options to improve the transparency of the system and increase business awareness of IP, making the system easier to navigate.

Some responses:

  • It is not just business awareness that is an issue. In the digital terrain, ordinary consumers (both adults and children), ...
  • The principle and operation of most of the patent system is fairly straightforward. Yes, the syntax rules in the claims ...
  • It would help if all sides could agree not to use the term "IP" (or derivatives thereof) and to realise ...
Leave a response and read 3 »
  • Obtaining IP rights can impose significant costs on businesses and innovators. For example, evidence suggests that securing patent protection in a selection of European countries and in the USA typically costs around £75,000 over the first seven years, including legal fees and renewal fees. (The Financial Realities of Patent Protection, Frank B. Dehn and Co., Patent and Trade Mark Attorneys (2003)) Moreover, it appears to be considerably more expensive to obtain patent protection across Europe than it is in the US, largely due to translation fees and other costs at the national level. These figures do not include the costs of enforcing IP and challenging infringement through litigation, which also appear to be very high, often prohibitively so, especially for small and medium enterprises. This may be acting as a barrier to efficient enforcement of IP rights and equally as a deterrent to innocent parties being able to challenge dubious rights. Efforts to agree a European Community Patent, aimed in part at reducing these costs, have repeatedly foundered.

Some responses:

  • Pricing is very restrictive when it comes to patents. Copyright is free, trademarks are relatively cheap but patents are incredibly ...
  • I have filed patents in the UK for several companies. We had to file for the UK patent. The next ...
  • I have no experience of litigation, but some of being threatened with patent litigation. A large company in recession may ...
  • The irony is that the damage to the market economy incurred by patent wars (at least in IT) often far ...
  • 1. I believe as the UKPO gives the Patent. The UKPO should be held liable in the first instance for ...
Leave a response and read 5 »
  • While patents provide a vital incentive for innovation, the granting of overly broad patent protection, together with restrictive or restricted licensing of IP, can impede the development of the next generation of products and reduce competition. The practice of obtaining patents defensively also appears to be widespread in some industries, where rights holders have no intention to develop marketable products or to license the IP to others, but wish to prevent others from undertaking research and development in similar areas. Others may hold defensive patents and seek to generate revenue not by commercialising them, but by seeking out potential infringers and proposing licensing agreements to them under threat of litigation. While such practices are legal, they may hinder innovation if the original patent was dubious or too broad in scope, and impose barriers to market entry for those who have legitimate innovations but are unable to risk litigation. Use of a patent in a way that places a burden on innovation rather than stimulating it will not be achieving the objective of the patent system.

Some responses:

  • Whilst defensive patents are a legitimate business strategy, I believe they should not be allowed. If a patent is not ...
  • I worked for Canon, and went on their patent course in Tokyo. At the time, Canon was second in the ...
  • At the point of inception I would suggest it is very difficult to differentiate between a 'defensive' and 'innovative' patent. ...
  • Well spotted! Patent "trolls" must be (somehow) cut out of the system - though, unfortunately, the way things are heading ...
Leave a response and read 4 »
  • The increasing complexity of high-tech products and of scientific research may also be leading to problems. Firms often need to use large numbers of existing patents to develop a new product. They may find themselves having to negotiate complex licensing agreements, often with multiple rights-holders holding overlapping patents, in order to emerge from so-called “patent thickets”. Delays in patents being granted can also lead to new products inadvertently infringing on patents issued after these products were brought to market. These problems are at their most extreme in high-tech industries such as computing and telecoms because of the complex and fast moving nature of the innovations concerned and the need to set formal technological standards and ensure interoperability.

Some responses:

  • Can IP law ever keep up with technological changes. Should it even try?
  • The increasing complexity of high-tech products and of scientific research may also be leading to problems. Firms often need to ...
  • With embedded software, items are comeing onto the market which if patents are given will severely restrict others from using ...
Leave a response and read 3 »