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Digital Opportunity: A Review of Intellectual Property and Growth - UK Intellectual Property review

In November 2010 it was announced that Professor Ian Hargreaves would lead an independent review of the UK Intellectual Property system, focusing on encouraging growth and innovation in the rapidly developing digital economy.

The review, entitled Digital Opportunity: A Review of Intellectual Property and Growth, has now been released. Talking on the Today Show on Radio 4, Hargreaves spoke of the importance of ensuring that IP rights, particularly copyright, do not unintentionally get in the way of industry arising out of the internet. This is reflected in the review which, though considering all forms of IP, singles out copyright for the most extensive consideration. The main features of the review are as follows:

Access to Orphan Works

Copyright arises automatically whenever an original work is created, and the right does not have to be registered or actively maintained by the owner. Copyright lasts until 70 years from the end of the calendar year in which the last remaining author of the work dies.

An orphan work is a copyrighted work for which the copyright owner cannot be contacted (either because the owner is not known, or because the name but no other information is known). This can particularly present problems for creators seeking to produce derivative works (such as a translation or a podcast of a written article) as permission to use the original work cannot be obtained from the rights holder.

Currently, in the UK such a work can be used if it can be shown that “reasonable efforts” have been made to trace the copyright owner, but in practice this defence is unlikely to succeed unless the work is anonymous. In the review, it is proposed that the government legislate to allow access to orphan works where the copyright owner cannot be traced.

‘Fair Use’ Provision

There had been some discussion of introducing a provision analogous to the US ‘Fair Use’ provision in the UK. This provision allows limited use of copyrighted material without the permission of the copyright holder, for example in news reporting, teaching or research.

However, in his report Ian Hargreaves has counselled away from such a move in the belief it is unlikely to be legally feasible. Instead, he recommends that the UK fully take up copyright exceptions already allowed under EU law; these will take into account technological advances where they do not threaten copyright owners. Among other things, this would allow the public to upload their own CDs to their own MP3 players without infringing copyright.

Digital Copyright Exchange

Particular issues are faced by digital music services. Each piece of music has two copyrights associated with it, which may or may not be commonly owned: one for the sound recording and one for the composition. Both of these rights must be licensed in order to use the work. In addition, it is common for major rights holders to be unwilling to offer unlimited licences for their back catalogues, making it difficult for new services to enter the market.

With the aim of driving digital innovation by making it easier for users to obtain licences for digital exploitation, the review proposes setting up a Digital Copyright Exchange with an associated dispute resolution body. This would provide a central exchange through which copyright could be licensed.

Rights holders would have to opt in to the exchange. Its central nature means that the rights holders would lose some choice over who licences are offered to, and the same terms would have to be offered to all licensees. However, opting in would enable them to gain the benefit of the Digital Economy Act’s anti-piracy sanctions.

Patents in the Digital Economy

The review also contains a discussion of patent issues in a digital economy. This discussion arises particularly out of concerns relating to patent thickets in the telecoms industry (a web of overlapping IP rights), and the uncertainty surrounding software and business method patents.

In the review, Hargreaves recommends that the government help to ease the situation by extending work-sharing with foreign patent offices in order to reduce the patent backlog at the UKIPO. Further, he recommends ensuring that patents are not extended into sectors which they do not currently cover without clear evidence of benefit, and investigating ways of limiting the adverse consequences of patent thickets, for example through reviewing the structure of patent renewal fees so as to encourage patentees to carefully assess whether it is worth maintaining low value patents.


This being the fourth review of intellectual property in the past six years, it remains to be seen how far any of the proposals made will be implemented. However, with the focus on improving copyright licensing opportunities, it has been welcomed in a number of quarters for its potential to help develop and promote creative businesses in Britain.



24 May 2011

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