The themes of adaptation and natural selection are recognised by us all nowadays as being the basic building blocks to evolutionary theory. However, it is not just living organisms who must adapt and evolve – the law is a social entity which must also keep up with the ever changing fabric of society. No statement stands as true as this – especially with intellectual property law.
In November 2010 British Prime Minister David Cameron had commissioned Prof. Ian Hargreaves to review the state of intellectual property and the legal framework surrounding it in the UK. He felt that the review was needed “because of the risk that the current intellectual property framework might not be sufficiently well designed to promote innovation and growth in the UK economy.” The resultant Hargreaves Review has just been published and met with great anticipation by intellectual property jurists the world over.
According to research conducted by the review, global trade in IP licences alone is worth more than £600 billion a year – which amounts to five per cent of world trade. And the figure is rising.
The review asks: “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?” And the answer it came to was: “Yes”. The intellectual property laws are seriously lagging behind technological investments and growth which have spurred industry forward. And the right which is most at risk is copyright.
One of the most memorable quotes from the review in support of the evolutionary cause for IP legislation is: “We are in danger of trying to run a modern highways system with a Highway Code last revised in Edwardian England”. Evolution is therefore necessary, nay, crucial.
We are living in an era where digital communications technology involves routine copying of text, images and data. It has just been reported that in the US in March alone, online film rental site Netflix accounted for 29.7 per cent of downstream traffic at peak times. The figure is greater than those for web browsing and peer-to-peer file sharing .To Hargreaves this means that copyright law has started to act as a regulatory barrier to the creation of new, internet based businesses.
Business models are therefore changing. Emerging businesses on the internet require laws which are technology neutral, but how possible is this? The Hargreaves report warns that a balance must be found: protecting the work produced by the ever-growing creative industries, while allowing others to participate in a more open, efficient and cost-effective market, making the enforcement of copyright plausible once again.
The answer, says the review, is to create a Digital Copyright Exchange. This will make it easier for rights owners, small and large, to sell licences in their work and for others to buy them, and make market transactions faster, more automated and cheaper. This would result in a market in digital copyright which is better informed and more readily capable of resolving disputes without costly litigation.
The review also urged the UK to adopt the more understandable copyright exemptions the EU allows. Thus the UK would join countries like Malta where copying for private use is allowed, as is copying for the purposes of making a parody of the original work. The UK had chosen not to implement these exceptions, something the review deems unacceptable in today’s age, since the result is that millions of citizens are everyday infringing copyright for example when moving content from one device to another. Thankfully this is not a problem in Malta where copying for private use and for parody are legal exceptions, sanctioned by the EU.
Apart from copyright, one of the biggest challenges, as identified by the Review, is with the design right. Design is a booming industry contributing to the economy, however, new developments in the market are not being catered for, resulting in legal uncertainty for designers who wish to exploit their work.
After reading this insight into the UK system, we shift our attention homewards, and ask ourselves whether our IP laws too are ready to embrace the creative economy, especially the digital creative economy. As we have seen, we are better placed in some instances, however the need to evolve is desperate in the high-tech world we live in. The focal point always being that in an advanced economy innovation is crucial to competitive edge.
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(This bulletin is not intended to offer professional advice and you should not act upon the matters referred to in it without seeking specific advice.)
Dr Rizzo specialises in intellectual property law at Fenech & Fenech Advocates.