Intellectual property (IP) and copyright laws in the UK should be overhauled and brought into line with today's digital era, according to recommendations in the Hargreaves Report published today (18 May).

The report, complied by Professor Ian Hargreaves of Cardiff University, outlines 10 proposals intended to update the UK's outdated laws and promote innovation, with the report suggesting that modernised IP systems could add up to £7.9bn to the UK's economy.

Key ideas include the launch of a Digital Copyright Exchange, to be implemented by the end of 2012, which will act as a central hub to make it easier to obtain clearance for the use of copyrighted material. The report also proposes that the Government should legislate to permit access to orphan works, where the owner cannot be traced – allowing the use of significant numbers of currently unusable works.

Hargreaves also recommends legalising format-shifting (copying CDs or DVDs digitally), for personal use, which has already been implemented across much of Europe; and relaxing the laws on parody. This would allow broadcasters more scope for showing material such as the Newport State of Mind YouTube clip, which parodied a song by Jay-Z and was removed from the internet following a copyright claim by music producer EMI.

Hargreaves (pictured) said: "In recent years the UK has failed to make the changes needed to modernise copyright law, for which we will pay an increasing economic price as we make our way into the third decade of the commercial internet. My recommendations are designed to enhance the economic potential of the UK's creative industries and ensure that the emergence of high technology businesses, especially smaller businesses, in other sectors is not impeded by our IP laws."

Other recommendations include the suggestion that the UK must take a lead in efforts to establish the long-awaited EU patent court and single patent system.

Hargreaves' report was commissioned by Prime Minister David Cameron in November last year.

Business Secretary Vince Cable said: "The report highlights real scope for changes to copyright laws which could add enormous value to the UK economy. IP affects what we can and can't do in business, education and in our daily lives. Technological innovation, successful creative businesses and strong international brands need to thrive."

However, some have criticised the report for not going far enough, for example by not supporting the US concept of fair use, which allows significant portions of work to be used without permission.

Mark Owen, head of the IP practice at media and entertainment law firm Harbottle & Lewis, said: "The review seems to be careful and balanced. It is also determinedly non-radical, which will disappoint some who expected big immediate changes.

"But it is important to remember that this is a prospectus, which lays out the scope of what should be looked at, but with plenty of scope still for detailed policy consideration and argument. And the report's approach recognises that simplistic broad strokes are difficult to make in the complex, and interconnected world of IP."

Reaction to the proposals

"I thought it was a sensible report regarding its focus on copyright. There has been a lot of speculation about the death of copyright, but the recommendations given provide a good start to boosting the links between businesses operating in the digital world and those creating content, while still recognising the need to preserve the rights of the creative industries. Hargreaves has also addressed some dated legislation that is in desperate need of change, which though fairly mandatory, is a positive move.

"The area that I think the report has fallen down is that it only focuses on the UK, and 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."
Simon Levine, global co-head of IP and technology, DLA Piper

"A large aspect of the review is focused on private copying and copyright. The clear rejection of a levies regime comes as no surprise as it affirms a long-held UK Government position. However, it contains a fresh danger for both content holders and equipment manufacturers since it may open the door to permitting home copying of content subject to digital rights management (DRM). Some important lobbying may be needed to ensure that the implementation of the report does not accidentally remove protection from DRM content or platforms."
Justin Watts, IP partner, Freshfields Bruckhaus Deringer

"The aims of review are laudable and it rightly identifies some of the pressing problems with our current IP regime. However, the implementation of many of its proposed solutions may prove extremely challenging given our position. Britain's IP laws are so dependent on myriad international and European treaties that unilateral reform of our copyright and patent systems is impossible to achieve. Real reform will need to be pursued at a European or international level, and many of the proposed solutions will need significant attention to detail in order to become viable."

"The abolition of so-called 'patent thickets' will be a Herculean task. The involved nature of patents which cover not only free-standing inventions, but also developments of previous inventions will ensure the thinning out of the current stock of patents is a prolonged and intricate process."
Simon Mounteney, partner, Marks & Clerk

"The report has been thoughtfully put together and centres largely on copyright, which is the main area considered to be in need of modernisation. I think it is a good thing that we have not gone as far as the US 'fair use' approach because that would lead to a torrent of litigation. I know that the branding community was concerned about the report possibly being anti-IP in tone, but it looks like their concerns and feedback has been heard and the report is more balanced."
Vanessa Marsland, IP partner, Clifford Chance

"It is of course encouraging that the report emphasises the importance of IP to the economy, but this is hardly surprising given this government's and the last government's references to the knowledge economy. Also, given the fact that the manufacturing assets are in the main not in the UK clearly we must support and protect the intellectual efforts of those who innovate. On the patent side no real radical thinking but nice to hear that we will give the highest priority to EU patents court and single patent and all should be done to promote this – however, no solution is given as to how we can have an EU patent court within the constraints laid down by the ECJ earlier this year."
Huw Evans, IP partner, Allen & Overy

"The big idea is the Digital Copyright Exchange or 'copyright shop' which would facilitate digital licensing. Hargreaves wants the Government to take the lead on this, although not to take the task on itself, with an ambitious implementation target of the end of 2012. The aims of the review as a whole are good, but how far they will actually be implemented is still up for debate, many of the conclusions of the Gowers report which are echoed here were not followed up with suitable legislation."
Rachel Montagnon, IP professional support consultant, Herbert Smith

For more analysis, see Hargreaves recommendations: impact on cultural and education sectors, and The Hargreaves Review – an initial overview.

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