Profession blows hot and cold over plan for digital copyright exchange

Proposals to introduce a digital copyright exchange may be wishful thinking and could create a two-tier ­system of IP protection, according to sector experts.

The suggestion to introduce the exchange comes in a major review of the UK’s IP laws by Professor Ian Hargreaves, who makes 10 key recommendations intended to promote ­business growth.

The Cardiff University professor addresses some important issues for the media industry, including the establishment of a ­digital copyright exchange and access to legal ­representation for small companies.

The wide-ranging report has been broadly welcomed by the legal community, with experts saying it includes important proposals. That said, lawyers and business leaders have raised questions about some of its recommendations.

Crucially, the report calls on the UK to establish a copyright exchange, with carrots and sticks to ­encourage rights holders and other parties to participate.

Baker & McKenzie IP partner Ben Allgrove says the exchange would ­streamline business ­operations, but adds that its success would rely on ­companies playing ball.

“Anything that helps to reduce the transactional cost of licensing is to be ­welcomed, but is there enough will? That remains to be seen,” he warns. “The other question mark is that the new business models tend to be cross-border – if only the UK does it, does it matter?”

Others are cautious about whether the idea will take off.

Nick Kounoupias, a ­copyright partner at DMH Stallard, says: “I won’t believe this one until I see it. This is something that wants to happen, but ­politics will make it difficult. Such an idea requires ­goodwill from all sectors.”

Chris Johnstone, who heads the legal team at ­digital music broadcasting company Music Choice, says his employer has been ­pushing for a one-stop shop for copyright licensing for years.

“It would be fantastic if [Hargreaves] can get this to happen, but it’s like putting 20 starving cats in a bag and asking them to make friends,” he says.

Emma Wild, head of knowledge, economy and markets at the Confederation of British Industry (CBI), says: “[The digital copyright exchange] would be a world first that would put the UK in a good ­position. It’s obviously in the interest of content creators.

“The only caveat is that it has to be led by industry. Businesses need to be in the driving seat, and I think they’re up for it.”

Katja Hall, chief policy director at the CBI, believes IP protection could risk becoming the preserve of those who put content on the exchange, effectively ­creating two tiers of ­protection.

Hall adds that “robust copyright protection should be available to all, and ­preferential enforcement action for material ­registered on the digital copyright exchange must be avoided”.

The report is encouraging news for small rights holders. It calls on the ­Intellectual Property Office (IPO) to improve access to legal and commercial advice for small-scale companies.

It also makes positive reading for the design industry, admitting that the role of IP in this sector has been neglected and calling on the IPO to carry out an assessment of the link between design rights and innovation.

The report proposes ­looking into whether access to the digital copyright exchange would help ­creators market their designs.

Wild says: “It would ­resonate with a lot of our members – it’s not an area that gets a lot of attention.”

Prime Minister David Cameron announced the review last year after the founders of Google told him the search engine could not have launched in the UK due to restrictive IP laws.

But Hargreaves gives ­support to copyright ­exceptions that provide incentives to creators, and advises that the UK should promote exceptions to ­support text mining and data analytics.

“This is potentially pretty profound,” states Allgrove.

But the UK might have its hands tied when it comes to internet law.

Allgrove adds: “Within its own law the UK can do this for non-commercial ­purposes, but the report says that EU law prevents ­legislation to make it legal for commercial purposes. I query whether that’s true, given the exceptions that exist in some member states.”

“Perhaps the most ­important idea,” says Mark Owen, head of IP at ­Harbottle & Lewis, “is that the UK should introduce the same exceptions to ­copyright as the rest of the EU.

“Bringing our law more into line internationally is worth considering.”

The report further calls for the limitation of the effects of patent thickets (webs of overlapping IP rights) on innovation, a move considered unrealistic in some quarters.

Wild comments: “I don’t think people really know enough about the issue [of patent thickets]. We need more evidence. With ­smartphones, for example, patenting arrangements are bound to be complex and difficult to legislate on.”

Kounoupias takes issue with the report’s claim that the IP system should be “driven as far as possible by objective evidence”.

“This assumes people will give in to lobbyists,” He ­contends. “It’s a needless comment.”

The UK is ranked in the top tier of ­Taylor Wessing’s latest Global Intellectual Property Index, which ranks jurisdictions’ IP regimes.

It is joined by Australia, ­Canada, Germany, the Netherlands and the US in the top band.