Gowers: IP should be faster, fairer, clearerJames Nurton and Emma Barraclough, London
Fast-track patent and trade mark filing, clarification of the private use copyright exception and heavier penalties for piracy and counterfeiting were three key recommendations from the Gowers Review of IP in the UK, which was published today (Wednesday).
The
Review makes 54 recommendations over 141 pages and covers balance, coherence, flexibility, operations, use, enforcement and governance of intellectual property in the UK. The Review was
endorsed by the Chancellor of the Exchequer in his Pre-Budget Report, and the government has said it will implement all those recommendations for which it has responsibility.
In his foreword, Gowers said: "I do not think the [UK IP] system is in need of radical overhaul. However, taking a holistic view of the system I believe there is scope for reform to serve better the interests of consumers and industry alike." He added that the recommendations are concentrated on the areas of strengthening enforcement, reducing costs of registering and litigating and improving the balance and flexibility of IP rights in the digital age.
Initiatives for SMEsGowers identifies "speed to market" as the single biggest issue for successful, innovative companies and says that "timely protection for patents and trade marks" is crucial. He therefore recommends improving the Patent Office's fast-track patent application system to allow for an "accelerated grant process" as well as a fast track registration for trade marks (recommendation 25) that would allow publication of trade marks within 10 days for a higher fee. This sounds similar to fast-track systems available in registries such as the Benelux.
However, the Review also recommends that patent fees should be increased "as domestic patents operations do not cover their costs" (recommendation 50). The Patent Office now only covers the cost of registering patents through renewal fees, and then only if a patent is held for 14 years – which most are not. Income from renewal of European patents is unpredictable and should not be relied on, says the Review. It does not recommend how much fees should be increased by
The Review suggests tweaking a number of areas where UK law is not meeting the needs of users. For example, Gowers notes (in recommendation 1) that "it is not entirely clear what uses fall within the scope of the experimental use exception". The Review recommends that "the experimental use exception should be clarified to enable researchers to examine, learn from and improve upon inventions" and cites the recently changed Swiss research exemption as a model.
EnforcementAnyone who infringes IP online on a commercial scale should face the same penalties as traditional infringers, says Gowers. He recommends that the government change the law so that online infringers face up to 10 years in jail, rather than two, to bring penalties for the offence in line with those for physical infringement (recommendation 36). The penalty for online infringement by consumers "to an extent that prejudicially affects the rights holder" should also be extended to 10 years.
Businesses that struggle to use British laws to tackle rivals who adopt copycat packaging have won support from Gowers. He says that the common law of passing off "does not go far enough" to protect many brands and designs from misappropriation and recommends the government monitor how well the new European directive on unfair commercial practices, now being transposed into UK law, helps brand owners. Gowers says that if the new measures do not address the problem adequately, the government should consult on further changes to the law.
He also recommends that police action against organized crime should consider IP crime (recommendation 41) and that the enforcement agency, Trading Standards, be given the power to tackle copyright infringement (recommendation 42).
One of the main concerns of many rights owners in the UK is the cost of enforcement in the courts. Gowers notes that attempts to reduce litigation costs in the UK have had a limited impact in IP cases, as most involve disputes worth more than £15,000. "Many of the benefits of the fast track system, such as capped costs, limited trial lengths and limited discolsure, do not apply to IP cases," says Gowers, and this has reduced the cost-effectiveness of the Patents County Court. Although he stops short of concrete recommendations, he does speculate that the £15,000 limit could be raised for IP cases and legal fees could be capped. Gowers suggests that the relevant government department should consider the issues and make proposals by the end of 2007.
He also encourages arbitration and mediation in general terms: "The costs of dispute resolution should be reduced by greater availability and use of alternative dispute resolution."
Patent Office overhaulWhen implemented, the Review will lead to major changes at the Patent Office, which reflects the shift towards a body focusing on policy, training and education rather than one that just registers rights. Gowers proposes that the Patent Office should be renamed the UK Intellectual Property Office, to reflect its wider role, and makes specific recommendations on how it can work with SMEs to provide information and advice to small companies.
This includes providing information to new firms registering at Companies House, establishing formal collaboration between the Office and Business Link, providing advice to UK firms working overseas, developing model IP licences and publishing an open standards web database (recommendations 26 to 34). The Department for Trade and Industry should also consider providing model IP reports.
Gowers says that the Patent Office's financial reporting should be more transparent and there should be a clear separation of responsibility for granting rights and settling disputes (recommendations 51 and 52).
The Patent Office should also provide an "annual IP strategic analysis fund" of £500,000 ($950,000) and divide up its delivery and policy directorates (recommendations 47 and 48). Gowers recommends a pilot study of the
Community Patent Review, which is being led by New York Law School's Beth Noveck, and the development of stronger links with universities (recommendations 23 and 24). Policy staff should go on industry placements (recommendation 49).
In more wide-ranging policy recommendations, Gowers suggests that a new Strategic Advisory Board for IP policy, reporting to the government, should be created by 2007 (recommendation 46). This should be funded by the Patent Office, but should include representatives from government, academia, consumer groups and industry.
Copyright and the internetMany of Gowers's recommendations focus on adapting copyright to the internet age. Recommendations 8 and 9 propose the introduction of limited private copying exceptions, such as exist in Germany and France, to enable users to, for example, copy music from a CD on to an MP3 player. Gowers recommends that "a limited private copying exception ... for format shifting" be introduced from 2008 and also that the law should "allow private copying for research to cover all forms of content". But the Review comes down against a copyright levy (the UK is one of only three European countries that does not have a levy).
Gowers also recommends that the UK seek to amend the EU enforcement directive to allow an exception for "creative, transformative or derivative works" (recommendation 11). This would clarify, for example, the rights of hip hop musicians who sample others' music as is allowed in the US. A similar exception for caricature, parody and pastiche should be introduced into UK law by 2008 (recommendation 12). This would comply with EU law, says Gowers.
As expected, Gowers resisted pressure from musicians such as Cliff Richard to push for the 50-year term of copyright protection for recorded works to be extended in Europe (recommendation 3). He also says that the term of protection for IP rights should not be changed retrospectively.
As part of the review of the copyright term for recorded works, Gowers commissioned a
report from the Centre for IP and Information Law at Cambridge University. This found that the case for extending the copyright term in sound recordings is "weak" and "will likely result in a net loss to UK society as a whole", in particular by having a negative effect on the balance of trade. "The case for an extension would have to be especially compelling to make it preferable to keeping terms at its current length" and it would be "inadvisable" to extend the term, says the report.
Gowers also addressed the problem of orphan copyright works. To deal with this, he recommends that the UK propose that the EU draft a provision on orphan works (recommendation 13) and the Patent Office should introduce a voluntary copyright register (recommendation 14).
International implicationsThough the Review focuses on UK policy, it highlights a number of areas where the UK can act to address overseas issues. Gowers says that the UK should work internationally to promote IP and development. In particular, the UK should help to develop IP rights in Africa, to give least-developed countries more time to comply with the TRIPs Agreement and to promote the TRIPs amendments on drugs importation (recommendations 5, 6 and 7).
He also recommends that the Patent Office promote harmonization and work sharing between IP offices in Europe and between the trilateral patent offices (recommendations 18 and 19) and supports the UK position in favour of the Community Patent, London Agreement and European Patent Litigation Agreement, which should lead to cost savings for patent applicants in Europe.
The Review was commissioned by Chancellor of the Exchequer Gordon Brown in December last year. Its remit was to review all aspects of the IP system in the UK and make recommendations for changes to policies. A call for evidence in February prompted some 500 written comments from interested parties. Gowers was asked to examine instruments (IP rights), operation (how IP is awarded, licensed and enforced) and the governance structure related to IP.
