Reviewing the UK Government Response to the Hargreaves Review

I've written a number of columns about the Hargreaves Review, and its generally sensible ideas. But, ultimately, those proposals mean nothing if they are not accepted by the UK government and implemented. That makes today's official response particularly important.

You can measure the scale of Hargreaves's success from the opening paragraph on that page:

The response accepts all ten of Professor Hargreaves' recommendations. The Government's goal is to have measures in place by the end of this Parliament that will realise the Review's vision and deliver real value to the UK economy, and to the creators and users of Intellectual Property (IP).

That's a pretty amazing achievement, given the way that previous reports were ignored to a greater or lesser degree. But of course the devil is in the details, and what follows is a quick run-through of the key proposals.

As I noted a couple of months ago, perhaps the key proposal of the report was one that might be overlooked as being "obvious": that policy should be based on evidence. But the importance of that truly profound idea can be seen from the number of times that it is invoked by the UK government in its reponse. For example:

the Government will in future give limited weight in IP policy-making to evidence that is not sufficiently open and transparent in its approach and methodology, and we will make it clear where we are taking this view. IPO will set out guidance in Autumn 2011 on what constitutes open and transparent evidence, in line with professional practice. The Government is conscious that smaller businesses and organisations face particular challenges in assembling evidence and will assess their contributions sympathetically, with the same emphasis on transparency and openness.

The fact that the Government has accepted this point and intends to act on it is fantastic: I really think this will have a dramatic effect on policy, which, as Hargreaves pointed out, has hitherto been largely the result of lobbying. For example, as readers of this blog will know, there is considerable evidence that sharing digital files actually increases the sales of goods – something that the copyright industries of course refuse even to countenance. But if we get good, independent research data confirming this, then they will have to accept it.

However, it is slightly disappointing that in the above paragraph the Government talks about "smaller business and organisations" facing "particular challenges in assembling evidence" and that is will "assess their contributions sympathetically." What is true about those smaller businesses and organisations is even more the case for members of the public, whose views have never really been seriously considered when it comes to policy-making in this area. And yet it is precisely the public that is the other crucial partner in the agreements represented by copyright and patents. One of the reasons that there is such widespread contempt for the current law on digital sharing is that ordinary people have never been asked what they think might be fair.

One potentially big win for everyone is dealing with the huge waste of orphan works:

The Government will this autumn bring forward proposals for an orphan works scheme that allows for both commercial and cultural uses of orphan works, subject to satisfactory safeguards for the interests of both owners of ‘orphan rights' and rights holders who could suffer from unfair competition from an orphan works scheme. These would include diligent search for rights owners, licensing at market rates for commercial use and respect for the rights of ‘revenant' owners that come forward.

There is also an acceptance of proposals to add wide exceptions to copyright:

the Government agrees with the Review's central thesis that the widest possible exceptions to copyright within the existing EU framework are likely to be beneficial to the UK, subject to three important factors:

That the amount of harm to rights holders that would result in "fair compensation" under EU law is minimal, and hence the amount of fair compensation provided would be zero. This avoids market distortion and the need for a copyright levy system, which the Government opposes on the basis that it is likely to have adverse impacts on growth and inconsistent with its wider policy on tax.

Adherence with EU law and international treaties.

That unnecessary restrictions removed by copyright exceptions are not re-imposed by other means, such as contractual terms, in such a way as to undermine the benefits of the exception.

That last point is critical: it means that contracts cannot by used to pull back these new exceptions.

Here's another big win:

The Government will therefore bring forward proposals in autumn 2011 for a substantial opening up of the UK's copyright exceptions regime on this basis. This will include proposals for a limited private copying exception; to widen the exception for non- commercial research, which should also cover both text- and data-mining to the extent permissible under EU law; to widen the exception for library archiving; and to introduce an exception for parody.

As I noted previously, the Hargreaves Report showed a good understanding of the dangers posed by formally permitting software patents beyond the "computer-implemented invention" trick currently being used. Happily, the Government has implicitly supported this view:

The Government will resist extensions of patents into sectors which are currently excluded unless there is clear evidence of a benefit to innovation and growth from such extension.

Note again the clear reference to "evidence". That comes up again in the section on enforcement:

The Government is therefore committed to an effective IP enforcement regime both in the UK and globally. A key factor in achieving this is reliable evidence, which is particularly challenging in respect of IP infringement because much infringing activity takes place away from the eyes of rights owners and enforcement bodies. Strong evidence is a necessity for the UK's capability for proportionate and effective enforcement. We acknowledge that not all the evidence put forward in this area is up to the standards of the best, and that many studies have more to do to show their methods and conclusions are sound.

In pursuit of good data to inform enforcement of copyright online, the Government agrees that it would be desirable for Ofcom to begin establishing benchmarks and data on trends in online infringement of copyright as soon as possible. Government will work with Ofcom to agree how this might best be achieved.

It's also good to see the following sensible comment in this context:

The finite public sector resources available should be allocated to meet the most serious problems, including but not limited to organised criminal activities.

This is really important, since the huge amount of effort being expended in a vain attempt to stop file sharing between members of the public that causes no damage (and may even boost sales) could be far better spent tackling criminal counterfeiting that causes actual economic damage, and may be a threat to public health too.

The response also has the following comments on crucial aspects of the benighted Digital Economy Act:

Following the judicial review ruling, the Government is removing the obligation on internet service providers (ISPs) to contribute towards the costs of Ofcom and the independent appeals body in setting up and administering the regime. We do not intend to revisit the sharing of other costs between ISPs and copyright owners.

The Government has received further advice from Ofcom on the potential costs of the DEA appeals system, which we are publishing today. In order to minimise the risk of the system being disrupted by vexatious or non bona fide appeals, we are introducing a £20 fee for subscribers to appeal. The fee will be refunded if the appeal is successful.

Following advice from Ofcom – which the Government is publishing today – site blocking will not be brought forward at this time. However, the Government is keen to explore the issues raised by Ofcom's report and will do more work on what other measures can be pursued to tackle online copyright infringement.

Site blocking is a complete waste of time, since there are multiple ways to circumvent it – as the Ofcom report released today (complete with blacked-out portions that aren't so hard to read) admits But worse than that, it is an assault on the fabric of the Internet, and on fundamental liberties, that is completely unjustified by any evidence – that key element of the Hargreaves Report. [Update: looks like they've already pulled that report...can't imagine why. Glad I downloaded a copy first.... Copy now available on Scribd.]

The UK Government released a couple of related documents, available on the same page as its main response, that provide interesting further insights into its thinking in this whole area.

For example, here's a short comment from its "International Strategy" paper:

Push for international copyright rules that protect broadcasters' rights to be updated

I presume this refers to the WIPO Broadcasting Treaty, which seeks to give even more protection to content. Here's what the EFF has to say:

If adopted, the WIPO treaty will give broadcasters 50 years of copyright-like control over the content of their broadcasts, even when they have no copyright in what they show. A TV channel broadcasting your Creative Commons-licensed movie could legally demand that no one record or redistribute it—and sue anyone who does. And TV companies could use their new rights to go after TiVo or MythTV for daring to let you skip advertisements or record programs in DRM-free formats.

The UK support for this really bad idea here is regrettable.

There's another very interesting nod to the need for evidence in this document:

International debate on IP has become increasingly polarised around this issue. Developed countries (including the UK) argue that the IP system can help stimulate economic growth and incentivise private sector investment in innovation. But many developing and emerging economies, and NGOs, argue that IPRs do little to stimulate innovation in developing countries where the prerequisite human and technical capacity is absent. They argue the IP system prevents developing countries from getting access to the essential medicines, technologies, educational materials and agricultural products that they need, at prices they can afford, creating additional barriers to economic development. These debates have spilled over into global discussions on topics as diverse as public health, climate change and food security. One of the difficulties in these debates is the lack of clear evidence around the relationship between IP and economic development, although there is evidence to show that the role of IP does change as countries develop. The IPO is already engaged in a work programme to understand this relationship, collaborating with other IP offices. The Government accepts the emphasis placed by Digital Opportunity on better evidence in policy- making on intellectual property, and will promote this view at EU level, and internationally.

There's also a reference in the third of the documents released today, on "IP Crime Strategy":

Developing cost-effective, evidence-led and credible measurements of IP crime and its impact

Unfortunately, it then contradicts itself by quoting, without any evidence to back it up, the following:

Available data suggests a strong link between IP crime and other forms of criminal behaviour, with offenders convicted of counterfeiting and piracy offences also found to be engaged in illegal money-lending as well as benefit frauds and anti-social behaviour. There is also evidence of the involvement of some engaged in IP crime in drugs, human trafficking, serious fiscal and non-fiscal fraud and associated money laundering offences.

On the contrary, as the recent report "Media Piracy in Emerging Economies" discovered:

The study finds no systematic links between media piracy and organized crime or terrorism in any of the countries examined. Today, commercial pirates and transnational smugglers face the same dilemma as the legal industry: how to compete with free.

The release of this response to the Hargreaves Report is just the beginning of a final process of drawing up relevant legislation:

The Government will consult on the detail of how it will proceed over the next few months and will set out our plans in a White Paper in Spring 2012 with a view to legislating in this Parliament where necessary.

That means that there will be massive lobbying (again) from the copyright industries to get some of these proposals removed or watered down. As a result, we will need to write to our MPs supporting the measures if we want them to be implemented fully – I'll be discussing this in due course.

However, to summarise an over-long post, the UK Government's response to the Hargreaves Report is much better than I expected. It has largely accepted Hargreaves's main points, including the crucial one about the need for evidence before policy is formulated, or action is taken. Of course, there remain problems – the £20 fee for appeals is hugely discriminatory – and the UK Government did not address the underlying problems with copyright and patents, but that is not surprising – neither did Hargreaves and his team.

By setting himself a more modest goal of pointing out the most flagrant absurdities of the system in our digital world, and offering plausible fixes, Hargreaves seems to have managed to convince the UK Government of the wisdom of accepting more or less all of them. That's no mean achievement, and both parties deserve kudos for arriving at this starting point, even if the real legislative journey has only just begun.

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