Giving IPO reporting requirements would help establish evidence-driven IP policies, Government says

The reporting requirement would increase transparency and help ensure that the Government's policy making on IP issues is well grounded, it said. The IPO is an agency body which forms part of the Department for Business Innovation and Skills.

"The Government recognises that the IPO has statutory duties connected with its rights granting activities, but lacks underpinning duties or functions directed towards the objective of promoting innovation and growth," the Government's proposals on the role of the IPO (12-page / 796KB PDF) said. "It is, however, important to note that, although growth is the Government’s top priority, there are other issues that sometimes come into play when developing policy on IP."

"While IP makes a substantial contribution to the UK economy, it also has an impact on society as a whole – on culture, education and the dissemination of knowledge and information. The Government therefore considers that the most effective way of strengthening the IPO’s focus on innovation and growth would be to require it to report annually on the extent to which its activities had promoted those two ends," it said.

"This increased transparency would act as a powerful incentive to develop policy based on the best available evidence, and to be clear about the respective weightings given to economic and social impacts on individual policy issues. Where the data are not as robust as we might like, a requirement to report will act as a spur to improve the quality of evidence," the proposals said.

The Government said that it recognised that obtaining "perfect evidence" was an "ideal" and that it must be prepared to make "reasonable" decisions on IP policy direction "based on the current state of knowledge, even if [the evidence] is incomplete."

Under the plans the IPO would also be required to publish a summary of the impact assessments the body conducts when developing IP policy in order to detail "the impact that its analysis indicates the policy will have on innovation and growth." The summary should be signed by the IPO's chief executive and chief economist, the proposals said.

The IPO has faced criticism for its role in IP policy making. Earlier this year Richard Mollet, chief executive of the UK's Publishers Association, said it was "a cause of amazement" that the IPO had "so enthusiastically" backed recommendations to reform the UK's IP framework based on "self-confessed ... shortcomings" contained in a Government-commissioned report by a university academic last year.

Professor Ian Hargreaves suggested wide-ranging changes to the existing IP regime in a report published in May 2011 and the Government broadly backed the plans in a response in August. Since then a range of work has been initiated with a view to overhauling the copyright regime, including creating new exceptions to copyright and establishing a digital copyright exchange for licensing protected works.

However, a cross-party group of MPs is currently conducting an inquiry into the Government's approach to "promoting and protecting" IP. Part of the All-Party Intellectual Property Group's (APIP Group) focus is on how "effective" the IPO is and what its priorities should be.

Earlier this year vice-chair of APIP Group, Pete Wishart MP, organised a Parliamentary debate on the Government's role in IP policy making. He said that creative industry bodies viewed the IPO as too influential over Government policy-making on IP.

As a result of a lack of "effective political control", the IPO had been able to "develop its own agenda and come up with the notion that copyright and intellectual property must be constrained for the benefit of users," Wishart said.

An IPO spokesperson told Out-Law.com that the Government is "committed to delivering high quality, informed and influential policy on intellectual property" and that the IPO's "analytical capability" has been "significantly strengthened". The Government's proposals "demonstrate the IPO's commitment to openness and transparency in policy making," the spokesperson said.

"The Office will continue to develop policy in a transparent and balanced way based on evidence and with a range of stakeholders. Its forward research programme is discussed with stakeholders, and all research projects are subject to peer review. Best practice in the conduct of research is drawn into new projects where appropriate. The Government will continue to develop economic analysis in relation to the Hargreaves recommendations and will continue to work with the independent Regulatory Policy Committee, as appropriate as it develops and implements its policies," they added.

In its proposals the Government also outlined plans for the IPO and the Office of Fair Trading (OFT) to work more closely where IP issues grate with competition law. The IPO and OFT have signed a memorandum of understanding (MoU) in order to strengthen cooperation between the bodies.

The MoU outlines procedures in order for the IPO to refer cases to the OFT "where it considers that there may be competition concerns." It also enables knowledge, expertise and best practices to be shared "in areas of mutual interest" and allows the bodies to also share information and offer "technical and policy assistance ... on projects of mutual interest" where it is "appropriate" and permitted by law.

The Government said that the IPO would also "seek to agree this framework" with the Competition and Markets Authority, when it is formed and takes over the competition functions of the OFT and Competition Commission.

"IP rights incentivise innovation, and they do this by offering a quasi-monopoly," the Government's proposals said. "The existence of such rights has led to vigorous debates over the relationship between IP and competition, but there is now increasing recognition that IP rights are not in themselves anti-competitive, but that the economy may be harmed if the system is abused.  If IP rules are badly designed, they may entrench existing firms’ positions and acts as barriers to the establishment of new firms or markets."

Editor's note, 13/07/2012: This story has been updated to include the comments from the IPO.