GOWERS REVIEW OF INTELLECTUAL PROPERTY

Job Well Done

Introduction
The long-awaited Gowers Review (“Review”) on Intellectual Property was published on December 7 th 2006 and
brought welcome attention to the UK‟s knowledge-based and creative industries.
One of the main goals of the Review was to evaluate the current UK IP system and determine whether laws
drafted in the 19th century were fit for the digital economy. The Review concluded that the current system was
capable of managing IP rights in the digital age, but this was a qualified endorsement. Although the Review
found the system to be “broadly performing satisfactorily”, it proposed 58 recommendations which identified
areas of necessary reform.
This article considers the impact of this Review from the perspective of UK copyright. Many of the
recommendations can be welcomed without reservation, especially in the areas of education, enforcement of
rights, a more strategic role for the Patent Office, cheaper and more efficient IP litigation procedures and the
promotion of mediation as a dispute resolution mechanism.
However, there are other proposals which, if implemented – or implemented wrongly – could damage our
knowledge-based and creative industries. In addition, there are a number of recommendations which probably
meet the „fair enough‟ test.
A Job Well Done!
On the whole, it has been a job well done and the Gowers Review Team should be commended on the scope of
the Review which considers all aspects of the IP system. This is even more laudable given that it was delivered in
just one year.
Counterfeiting and piracy are huge concerns for the knowledge-based and creative industries, therefore
strengthening enforcements rights is sensible and necessary. The Review calls for adequate sanctions to prevent
would-be infringers from violating IP rights. In particular, addressing the current inconsistency between
infringement penalties in the online and physical world is an important proposal.
The Review also highlights the pursuit of infringers by relevant authorities as an important element in preventing
infringement. In the digital age, IP crime is a growing concern and as such should be recognised as policing
priority. The Review seeks to widen the enforcement powers given to Trading Standards by enacting section
107A Copyright, Designs and Patents Act 1988 (“CDPA”). This would correct the current inconsistency in the way
the law considers privacy and counterfeiting.
The Controversial Issues
Private consumer copying – future legislation for a declining problem?
The Review seeks to introduce a limited private copying exception for format shifting for works published after
the date the law comes into effect.
The recommended exception is limited in scope, only applying to „format shifting‟, an example of which is
“transferring a work from CD to an MP3 player”. It would only allow one copy per format. Also, it would not be
retrospective and would, therefore, not enable consumers to overcome the „legacy‟ issue of shifting their existing
CD and DVD collections.
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15 December 2006

The Review suggests it is possible to introduce this limited private copying exception without an accompanying
copyright levy. It is highly doubtful whether this can be accomplished, particularly in light of the EC Directive
2001/29/EC (“Copyright Directive”).
Although we are moving to an age where format shifting of this type will decline as online purchase and use
grows, it still remains a problem which needs addressing. The solution lies in either a statutory exception or in a
„voluntary licence‟ from the rights owners. Given the limited scope and application of the proposed exception,
perhaps licensing will prove more appropriate.
An exception for creative, transformative or derivative works, within the parameters of the Berne
Three-Step Test
This calls for an amendment to the Copyright Directive, in response to those in the creative community who
argue that copyright is an obstacle to the creation of new work which depends on borrowing or sampling existing
work.
This new exception would amount to importing part of the US „fair use‟ exception to copyright. It would require
precise construction and presents a difficult challenge to legislative draftsmen. Moreover, the UK courts continue
to demonstrate that they are capable of maintaining the balance in copyright so that the creation of new works is
not restricted.
No extension of sound recording term
Performers and record companies, from the major players to independent labels, have greeted the Review‟s
recommendation not to extend the 50 year term of protection for sound recordings with dismay.
The campaign to extend the term had received significant industry support. However, Gowers does not accept
the argument that term extension acts as an incentive for new works. It is unlikely that the industry will give up
on this issue and the debate will continue, perhaps as part of the wider discussion concerning the term of
copyright protection.
Fair Enough
The Review also proposes new extensions to the exceptions for education, libraries and non-commercial research
which seek to balance legitimate commercial with public interest considerations. On that basis, these proposals
will be less hotly contested.
These extensions include:
 Amending sections 35 and 36 CDPA to cover distance learning and interactive whiteboards within non-
commercial educational institutions and will only apply in the absence of any licensing arrangement.
 Extending the scope of fair dealing for the purposes of non-commercial research and private study to
cover all forms of content.
 Amending section 42 of CDPA by 2008 to permit libraries to copy the master copy of all classes of work
in a permanent collection for archival purposes.
 Allowing further copies to be made from the archived copy to mitigate against subsequent wear and tear.
 Enabling libraries to format shift archival copies by 2008 to ensure records do not become obsolete.
Next Steps
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15 December 2006

The Review‟s recommendations are just that. There is a long way to go from the Review to enacted legislation,
particularly as some of the recommendations would have to be implemented at an international level. So the
Review is going to kick start a period of intense debate in the UK, running alongside the review of European
copyright law now underway in Brussels. So this will truly be part of an international debate.
Laurence Kaye
Laurence Kaye Solicitors
© Laurence Kaye 2006
T: 01923 352 117
E: laurie@laurencekaye.com
www.laurencekaye.com
http://laurencekaye.typepad.com/

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