Out-Law News 3 min. read

Reform of copyright law key to economic growth in Europe, Hargreaves claims

European technology firms have been hindered in their attempts to compete in the global market in the past 10 years because of restrictions around the legal use of copyrighted material, a leading UK academic has claimed.

Professor Ian Hargreaves said that whilst Google, Facebook and Apple had emerged as "globe-bestriding pioneers in Internet search, content curation, device manufacture and user-generated content" in the last decade, European firms had "struggled with the consequent pace and disruption". He said that this was "partly ... because of the too ready resort to the traditional tool of protection by copyright" and in spite of Europe's "historic strength in creative content." Such "economic protectionism" has implications for market "competitiveness", Hargreaves added.

Hargreaves led a recent Government-commissioned review into the UK's IP framework which was completed last year. In a new report (67-page / 5.84MB PDF) published by the Lisbon Council think tank, Hargreaves said that urgent changes were needed to Europe's intellectual property (IP) framework in order to help technology companies grow. He said that there are differing views over the "extent of the dysfunctionality" of the existing framework, but that none of those who had contributed to the Lisbon Council's report "defends the system as it is".

"Europe's digital economy desperately needs better conditions in which to grow," Hargreaves said in the report. "That means, first and foremost, a legal framework for intellectual property which addresses the growth agenda. The prizes include an end to confusion among consumers, along with better functioning markets and richer business opportunities for creative companies."

"You can put alongside that the flourishing of a digital public domain, without which we will diminish ourselves culturally, as well as economically. This is the 'digital opportunity' referred to in the title of my work for the UK government. It is an opportunity which Europe needs to seize right now," he added.

Hargreaves rejected the view, which he said some hold in the US, that free speech on the internet should always trump copyright. He said that there needs to be a "re-balancing and de-cluttering of commercial returns to copyright in a digital environment, not their abandonment."

Hargreaves said that there was "now a stirring for copyright reform in Europe", but that he fears that changes may be implemented "too late to prevent further comparative, structural weakness in Europe's digital economy." Europe's "digital single market" is "of critical strategic importance" in helping the EU "achieve levels of productivity and innovation" comparative with rival economies in the US and Asia, he added. Research published in 2011 suggested that the internet is responsible for 21% of all economic growth experienced by G8 countries in the past five years, Hargreaves said.

The academic criticised Europe's "too anxious" response to the changing political debate around copyright.

"The European Commission's 2011 policy statement on IP strategy covered a lot of ground and it has this year resulted in welcome, if cautious, reforms concerning orphan works and the operation of collecting societies, not to mention agreement on a unified European patent system, which has taken all of 40 years to achieve," Hargreaves said. "But much more is needed, including a debate about revising the Information Society Directive itself in the light of the best available evidence about the relationship between IP, innovation and economic growth."

"We must hope that heightened political interest in IP, and concern about extracting maximum benefit from the Internet, will lead to a more constructive and balanced IP debate, followed by bolder and timely proposals for change," he added.

In his UK report Hargreaves made a number of recommendations to the UK Government aimed at reforming copyright laws which he said was the area of the UK's IP framework "most in need of change".  The Government has subsequently unveiled plans to reform aspects of UK IP laws.

However, Hargreaves said, though, that previous attempts at reforming UK copyright laws have "most spectacularly foundered" in an environment where "lobbyists most dramatically outnumber solid evidence-bearers".

Hargreaves admitted that he had avoided proposing a "highly detailed programme of change" to the UK's IP regime. He said that this would have been "too tangled to drag through the political undergrowth" given the "legally complex" subject matter.

The university academic said that rights holders in the creative industries have the view that the Government's "only useful contribution" on IP is to "ensure tougher policing against online infringement of rights," but Hargreaves said that such a view was misplaced.

"The [UK] review argued in detail that enforcement can only work well when the law is reformed to fit with reasonable consumer expectations and when rights holders fully grasp the need to make available digital products and services through easily accessed legal digital channels at realistic digital prices," he said.

UK politicians are beginning to view copyright differently from before and this may help deliver reform, Hargreaves said.

"Given the history of failed attempts to reform IP in the UK, it cannot be assumed that parliament will agree to the government's proposals, though there are signs that British members of parliament, like the population at large, is increasingly aware of the costs to the economy of defending an inflexible view of copyright at the cost of deadlock in the digital economy," Hargreaves said. "We shall see."

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