DLA Piper on Hargreaves’ Review of UK’s IP Policy


Back in November 2010, the Prime Minister commissioned a review of Britain’s intellectual property laws and their effect on economic growth.  Ian Hargreaves’ Review of UK’s IP policy,released last month, makes 10 recommendations covering patent, copyright and policy-making process.  Our friends at DLA Piper sent in this article discussing Hargreaves’ findings.

There was an audible buzz in the IP community [when] the findings of the latest UK IP policy review, led by Ian Hargreaves, were published in the report: ‘Digital Opportunity: A Review of Intellectual Property and Growth‘.

The exam question

The review was first announced by the UK government on 11 November 2010 (see our previous alert), following a speech made by the Prime Minister in which he set out his ‘vision’ for London’s East End to become a pre-eminent ‘Silicon Valley’-style technology centre. Interpreting Mr Cameron’s ‘exam question’ as being: ‘Could it be true that laws designed more than three centuries ago with the express purpose of creating economic incentives for innovation by protecting creators’ rights are today obstructing innovation and economic growth?’, Hargreaves’ answer is a firm yes.

The recommendations

The report sets out recommendations for an overhaul of the UK IP regime, in order to render it fit for the digital era and thus give the UK a competitive edge: although they are more in the nature of evolution not revolution. The recommendations include the following:

Evidence: As we reported in December (see our previous report) Hargreaves’ team issued a Call for Evidence in which to ground their review, the responses to which are littered throughout the report. Hargreaves’ appeal to the government takes a similar, evidence-based approach to legislative reform.

Looking overseas: Recognising that in the modern age IP rights niftily transcend national borders, the report endorses the unified EU patent court and Patent Cooperation Treaty, and recommends that the UK pursue its international IP interests, particularly in emerging economies such as China and India.

Copyright in the limelight: The report responds to the turbulence which technology has created for copyright law, by advocating a system which serves the market opportunities made possible by the digital revolution. Hargreaves recommends the appointment of a senior figure to oversee the design and implementation of a cross-sectoral Digital Copyright Exchange – a ‘one-stop-shop’ for digital rights clearance. To reinforce the exchange, the report advises that the UK supports moves by the European Commission to establish a framework for cross-border copyright licensing. Continuing the theme of commercialising copyright, the report recommends that the Government establishes collective licensing for mass licensing of orphan works, and a clearance procedure for use of individual works.

Copyright exceptions: In one of the most eagerly-anticipated sections of the report, Hargreaves rejects the adoption of a US-style ‘fair-use’ exception to copyright infringement (recognising that the UK’s obligations under EU law would have prevented such a radical departure). However, Hargreaves encourages the Government to make full use of the EU copyright exceptions, such as format shifting, parody, non-commercial research and library archiving. The report also calls on the UK to lead on a further exception which can be adapted to new technologies. Hargreaves justifies such extensions to copyright defences on the basis that they do not threaten to prejudice what he described as copyright’s central objective, namely providing incentives to creators.

Patents – Although testimonials submitted to the review team from contributors such as Qualcomm and the Chartered Institute of Patent Attorneys were largely in favour of the status quo, the review did make a number of key recommendations. First, the report urges the UK government to take a leading role in promoting international efforts to cut the backlogs caused by burgeoning numbers of patent applications, through ‘work sharing measures’. Second, in order to combat the problem of patent ‘thickets’ (i.e. overlapping claims), Hargreaves cautions against the extension of patent protection into new areas (e.g. software and business methods) without clear evidence of benefit, and suggests strategically adjusting fees for patent application and renewal fees.

Designs – Echoing the sentiments of many attendees of the seminar ‘Understanding IP: Design & Economic Growth’, which took place at the House of Commons on 11 May, the report argues that this branch of IP protection has been neglected. Criticising the ‘patchwork’ framework of design law, Hargreaves recommends that an evidence based review is carried out within the next 12 months, with a view to evaluating policy at a UK and EU level.

Enforcement – Responses to the Call for Evidence identified enforcement as the most serious weakness in the UK’s IP framework (particularly in the online world). Calling for ‘action on all fronts’, Hargreaves advises the Government to pursue an integrated approach based upon ‘enforcement, education and, crucially, measures to strengthen and grow legitimate markets’. Recommendations include carefully monitoring and benchmarking the enforcement regime in the Digital Economy Act (due to come into force next year) and a small claims track for low value IP claims in the new Patents County Court.


First reactions to the report have been mixed. Many rights-holders and lobby groups including the BPI and Creative Coalition Campaign breathed a sigh of relief on seeing the wholesale rejection of Cameron’s suggested ‘fair-use’ exception; although other users felt this omission was disappointingly conservative. The proposed extension of the ‘format shifting’ defence is similarly controversial: whilst the movie industry has expressed concern, many others have welcomed the move towards legitimising a practice which, in reality, is carried out by millions of consumers.

The Digital Copyright Exchange, an idea which was raised in Lord Carter’s final Digital Britain consultation (but later dropped), is likely to be warmly welcomed by digital content companies such as Spotify, but faces distrust from content owners such as record labels. It is far from clear what form such an exchange would take, and quite how it would be brought about. Hargreaves expressly ruled out a government-created exchange, instead suggesting that the government should bring the various interests together and incentivise them to create such an exchange. Given the divergent interests of these rightsholders, this may prove difficult in practice.

The legal community has noted another flaw in the plan: the UK cannot simply change its IP laws in a vacuum, rather it is constrained by a raft of international and European law. As Simon Levine commented in Legal Week “if we are to see the true economic benefits of change to IP and copyright, we need to be working more closely with other governments”. This is more difficult than it sounds: whilst the UK traditionally takes an economic approach towards copyright law, civil law droit d’auteur systems are far more protectionist of their rights-holders.

The future

As Hargreaves himself admits, the UK has conducted four reviews of the IP regime in the last six years. Perhaps the most famous of these, the Gowers Review (2006), saw only 25 of its 54 recommendations implemented. It remains to be seen whether Hargreaves’ report will leave any lasting legacy. However, from the number of business who responded to the Call for Evidence, it is unlikely that the IP world will be content to let this report turn into just another white elephant.

Click here for the full DLA Piper publication.


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