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Gowers Reforms to strengthen IP enforcement

Andrew Gowers has published the long-awaited Gowers Review of Intellectual Property (IP).

AOP welcomes the Report's recognition that the IP system, on which the digital publishing industry relies for its economic development, is not in need of radical reform. AOP supports the way that the Review has considered ways in which the system can better serve the interests of consumers and industry.

AOP also welcomes that many of the recommendations for reform put forward by the publishing industry appear to have been adopted in the Gowers recommendations. Of particular importance to the members of AOP is the recommendation that section 107 of the Copyright Design and Patents Act should be amended to provide for the penalties for online and physical copyright infringement to be brought into line with a maximum penalty of 10 years imprisonment applying.

The recommendations to reduce the costs of litigating IP rights for businesses large and small are also encouraging.

In AOP's view the framework established for the scope of permitted copyright exceptions and limitation covered by the Berne 3 step test, as included in Article 5.5 of the EC Copyright Directive, remains flexible enough to ensure developments genuinely opened up by technological advances. It is vital that all three elements of the test are remembered and considered when looking to develop any of the recommendations over new "flexibility" following publication of the Gowers Report.

The three step test provides that exceptions and limitation should:

1. only be applied in certain special cases
2. which do not conflict with the normal exploitation of the work or other subject matter
3. do not unreasonably prejudice the legitimate interests of the rights holder.

In this context AOP will want to consider carefully the recommendations related to allowing private copying for research to cover all forms of content, permitting libraries to make copies for archival and preservation (as opposed to access).

The Report argues that in the modern world, the UK's economic competitiveness is increasingly driven by knowledge-based industries, innovation and creativity, and says that intellectual property (IP) - protecting and promoting innovation - has never been more important.

Whilst the Review concludes that the UK has a fundamentally strong IP system, it sets out important targeted reforms. The reforms aim to:

* strengthen enforcement of IP rights to protect the UK's creative industries from piracy and counterfeiting;
* provide additional support for British businesses using IP in the UK and abroad;
* strike the right balance to encourage firms and individuals to innovate and invest in new ideas while ensuring that markets remain competitive and that future innovation is not impeded.

Andrew Gowers said: "In today's global economy, knowledge capital, more than physical capital, will drive the success of the UK economy. Against this backdrop, IP rights, which protect the value of creative ideas, are more vital than ever.

"The ideal IP system creates incentives for innovation, without unduly limiting access for consumers and follow-on innovators. It must strike the right balance in a rapidly changing world so that innovators can see further by standing on the shoulders of giants. And it must take tough action against those who infringe IP rights at a cost to the UK's most creative industries.

"The Review provides sound recommendations on how the IP regime should respond to the challenges that it faces. Getting the balance right is vital to driving innovation, securing investment and stimulating competition."

The Review identified a number of areas where reform is necessary to improve the system for all its users.

With the music industry losing as much as 20 per cent of annual turnover to piracy and counterfeiting, the Review recommends strengthening enforcement of IP rights through:

* new powers and duties for Trading Standards to take action against infringement of copyright law;
* IP crime recognised as an area for police action in the National Community Safety Plan;
* tougher penalties for online copyright infringement - with a maximum 10 years imprisonment;
* lowering the costs of litigation - by using mediation and consulting on the fast-track limit. The Review acknowledges that prohibitive legal costs affect the ability of many to defend and challenge IP; and
* consulting on the use of civil damages and ensuring an effective and dissuasive system of damages exists for civil IP infringement.

To provide support for businesses using the IP system the review recommends that:

* UK Patent Office be restructured as the UK Intellectual Property Office, with recommendations for it to provide greater support and advice for businesses using IP domestically;
* Business representatives sit on a new independent Strategic Advisory Board on IP Policy, advising the Government; and
* Government improve support and advice internationally - including in India and China - to enable UK businesses to protect their investment around the world.

To ensure the correct balance in IP rights the review recommends:

* ensuring the IP system only proscribes genuinely illegitimate activity. The Review recommends introducing a strictly limited 'private copying' exception to enable consumers to format-shift content they purchase for personal use. For example to legally transfer music from CD to their MP3 player;
* enabling access to content for libraries and education establishments - to ensure that the UK's cultural heritage can be adequately stored for preservation and accessed for learning. The Review recommends clarifying exceptions to copyright to make them fit for the digital age; and
* recommending that the European Commission does not change the status quo and retains the 50 year term of copyright protection for sound recordings and related performers' rights.

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