[A2k] MIP on Gowers Review

[Manon Ress]

Gowers: IP should be faster, fairer, clearer

James Nurton and Emma Barraclough, London
http://www.managingip.com/?Page=3D9&PUBID=3D198&ISS=3D23067&SID=3D666465&LS=
=3D452

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.

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 SMEs
Gowers 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 =96 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.

Enforcement
Anyone 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 =A315,000. "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 =A315,000 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 overhaul
When 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 =A3500,000 ($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 internet
Many 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 implications
Though 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.

The submissions from individuals and organizations can be accessed on
the Review's homepage.

Reaction to the Review will be published on www.managingip.com shortly.

MIP will host a discussion on the recommendations in the Gowers
Review, in which Andrew Gowers will take part, on January 30 2007.
More details will be available soon.

MIP Week welcomes your feedback on this or any other story. Please
email the author with your comments. Letters may be published online.

************************************************
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

Consumer Project on Technology
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