6 December 2006

“For many citizens, Intellectual Property (IP) is an obscure and distant domain - its laws shrouded in jargon and technical mystery, its applications relevant only to a specialist audience. And yet IP is everywhere.” Andrew Gowers

The Gowers Review of Intellectual Property was published on 6 December 2006 after being announced in Gordon Brown's Pre-Budget Report speech.

The Review was commissioned in December 2005 by the Chancellor of the Exchequer. The Chancellor recognises that IP is a critical component for the present and future success of the UK in the global economy and wanted to establish whether the current IP system in the UK was fit for purpose “in an era of globalisation, digitisation and increasing economic specialization”. Andrew Gowers, former editor of the Financial Times, was asked to conduct an independent review into the UK Intellectual Property Framework.

Gowers' overall conclusion is that the current system is sufficient and is not in need of a major overhaul. However, the review suggests a number of recommendations to improve the UK framework for innovation which fall into the following three areas:

• strengthening enforcement of IP rights, whether through clamping down on piracy or trade in counterfeit goods;

• reducing costs of registering and litigating IP rights for businesses large and small;

• improving the balance and flexibility of IP rights to allow individuals, businesses and institutions to use content in ways consistent with the digital age.

The review puts forward 54 recommendations including:

Patents

[1] Amend Section 60(5) of the Patents Act 1977 (exemption from infringement) so as to clarify the research exception in order to facilitate experimentation, innovation and education.

Comment:

Gowers bases part of his case for change on an assumption that research must be “private” to be exempt from infringement under UK law, but Section 60(5) of the Patents Act does not include any such requirement. That said, any clarification in the area of experimental use would be welcome. However, the Swiss research exemption, offered as an example in the report, would not appear to achieve this objective and, if anything, would probably introduce more uncertainty.

Tim Jump, Partner, Venner Shipley LLP

[17] Maintain policy of not extending patent rights beyond their present limits within the areas of software, business methods and genes.

Comment:

Much has been said on the subject of software and business method patents, and there are good arguments for softening the law in this area and there are good arguments for tightening the law. It is not surprising that Gowers has suggested maintaining the status quo, even if most interested parties would like to see the law change.

Paul Derry, Partner, Venner Shipley LLP

[19] The UK patent office should pursue work sharing arrangements with EPC member states and with the USA and Japan to reduce cross national duplication of effort in searching and examination of patent applications.

Comment:

For the patent system to be effective, it is important for there to be a high quality of examination of patent applications. Unfortunately, this recommendation necessarily would reduce examination quality if implemented and thus would increase the numbers of granted patents which are not fully valid. Although the reliance by a patent office on the work products of other patent offices would reduce the costs of obtaining patent protection to some degree, the costs savings would likely be a lot less that the additional costs of dealing with the increased numbers of patents which are undeserving of patent protection. The cost implications are likely to be more significant for smaller companies, thereby giving larger companies an advantage.

Paul Derry, Partner, Venner Shipley LLP

[20] Continue to support and expedite the establishment of a single Community patent in Europe.

[21] Support the London Agreement for reduced translation costs of a European patent.

[23] Conduct a pilot scheme for community review for patent applications (along the lines of Beth Noveck's Community Patent Review scheme in which experts help patent examiners find the right citations).

[45] Support the establishment of a single EU court for cross-border IP disputes by promoting the European Patent Litigation Agreement.

Trade marks

[25b] Provide fast track registration of trade marks.

Copyright

[3] No proposal to extend the term of copyright protection for sound recordings from its existing term of 50 years

[9] Private copying should be permitted

[13] Provision should be made for orphan works, i.e. those whose authors and/or copyright owners have become untraceable

[42] Give Trading Standards the power to act on digital copyright infringement.

Miscellaneous

[26 to 29] Improve information and advice to UK firms on how to use IP rights.

[46] A strategic policy advisory board should be formed, to sit beside the Patent Office and report to the Department of Trade and Industry.

[53] The name of the Patent Office should be changed to the United Kingdom Intellectual Property Office.

The recommendations are, for now, just that and it remains to be seen whether and how these will be brought into force by the government.

The 146 page review is available at:

http://www.hm-treasury.gov.uk/media/53F/C8/pbr06_gowers_report_755.pdf

Isla Furlong, Venner Shipley LLP