Gowers Review of Intellectual Property

• Increasingly firms appear to be innovating collaboratively, and using cross- licensing agreements and “patent pools” to share their IP with other firms and reduce the need for costly and time consuming negotiations. However, while this may enable innovation among the firms involved, it may also increase barriers to market entry for others.

• The widespread use of the Internet and the advent of high-speed digital networks has made it increasingly easy to copy and share digital information quickly, easily and without appreciable loss of quality. This has enabled widespread copyright infringement, most notably the use of file sharing technologies to download unlicensed music. It has been suggested that copyright exceptions lack clarity and are ill equipped to deal with these technological challenges. Furthermore public awareness of the boundaries of lawful use is low, and legal sanctions on infringement appear to lack clarity and consistency across different forms of IP.

• There may also be a number of barriers to efficient markets for copyright licensing. A significant proportion of copyrighted works are presently unavailable because they have little private value to the existing rightsholder — they do not merit the cost of being re-issued. Such works are therefore inaccessible to consumers and to other firms wishing to license or purchase the rights, and it often becomes difficult to trace the authors and rightsholders of such works.

The Review will provide an analysis of these issues, seek to identify others, and report with targeted and practical policy recommendations as appropriate. The Review will also fulfil the Government’s existing commitment to examine whether the current term of protection on sound recordings and performers’ rights in sound recordings is appropriate.

In many cases the Review’s recommendations will focus on how the Government might address these issues domestically. However, much of IP policy is agreed in an international context, and is often subject to EU legislation or international treaties and conventions. The Review may therefore also make policy recommendations at the international level, considering how best the Government can continue to take a lead internationally. It will bear in mind the need to balance the Government’s aims of promoting innovation, openness to trade and investment, and international development concerns. It will also consider how best to influence the European Commission’s agenda on intellectual property policy in the EU, including its review of legislation on copyright and related rights.

Moreover, with the increasing pace of technological change, in particular the spread of digital technology and growing use of the Internet, the Review will seek to provide a solid foundation for the Government’s long term strategic vision for IP policy, based on sound economic principles. Its key aim is to ensure IP systems remain appropriate in the face of global economic and technological change and the increased importance of the knowledge economy worldwide.

Scope of the Review

The Review will examine all elements of the IP system, to ensure that it delivers incentives while minimising inefficiency. Specifically:

1. The way in which Government administers the awarding of IP and provides support to consumers and business. The award and observance of IP should be predictable, and transparent, with minimal information costs and transaction costs for firms and citizens.
2. The way in which businesses and other organisations use IP. The structure of the IP framework should reflect the impact of economic and technological change on the nature of intellectual assets and their importance to businesses across different sectors.
3. How well businesses, other organisations and individuals are able to exchange and trade IP — in particular negotiating the complexity and expense of the copyright and patent systems, including copyright and patent licensing arrangements. Exchange of IP should be facilitated by accurate valuation, with no barriers in access to finance, and liquid markets.
4. How well businesses and others are able to challenge and enforce IP. Litigation and enforcement should be swift, efficient and judicious with the optimal mix of technical and legal measures. Businesses should be aware of the range of alternative methods to challenge and enforce IP such as mediation and alternative dispute resolution. These methods should be relatively inexpensive, swift, efficient and transparent.