Intellectual property rights in need of overhaul, says Cameron
The Prime Minister is worried that the founders of Google would have been unable to start their company in the UK because of our stringent copyright laws. However, Nick Clark discovers not all business leaders share his point of view
David Cameron fears current laws governing intellectual property (IP) could be a major barrier for digital small and medium-sized enterprises (SMEs) looking to set up in Britain. Surprisingly, it seems that the companies themselves may not agree.
The Prime Minister said during last year's launch at The Old Truman Brewery on London's Brick Lane that digital companies were struggling to come to terms with the UK's copyright laws.
"The founders of Google have said they could never have started their company in Britain," he said. "The service they provide depends on taking a snapshot of all the content on the internet at any one time and they feel our copyright system is not as friendly to this sort of innovation as it is in the United States."
He launched an independent review of the current IP regime, which is due to report in a matter of weeks, with proposals that could have a dramatic impact on the way copyright is governed in the UK. Mr Cameron wants to make the laws "fit for the internet age".
Yet a report drawn up by IFF Research into the impact of UK copyright laws on SMEs casts doubt on whether the industry shares the fears of Mr Cameron and Google. Surprisingly, the report was drawn up for the search engine giant before it was submitted to the so-called Hargreaves review. Joel Smith, an IP partner at the law firm Herbert Smith and chairman of the City of London IP Committee, said the IP rules did need updating for the digital age.
Ian Hargreaves, the chair of digital economy at Cardiff School of Journalism, Media and Cultural Studies, is overseeing the review, which is scrutinising whether the current IP framework - the rules and regulations governing how intellectual property is created, used and protected in the UK - hampers growth. It will also scrutinise the cost and complexity of enforcing intellectual property laws, the interaction between IP and competition rules, and the cost to SMEs of accessing services to protect and exploit their IP. The findings and proposals will be presented in May.
About half of digital SMEs currently use copyrighted materials with permission. Last month a group of companies and industry bodies in the digital industry, including Google, signed a letter condemning the UK's copyright laws, saying they were "outdated" and were "hindering innovation and damaging our country's future prosperity".
They said: "What is needed is a system which continues to protect the rights and rewards of creators without unnecessarily hampering the ability of other artists, researchers and innovators to re-use the work."
The companies said reforming the rules "would eliminate legal uncertainty, protect Britain's economy and promote innovation".
Currently, UK copyright law means consumers cannot edit, remix or translate content they have bought. Technically those copying a CD on to their computers to transfer on to an MP3 player are infringing copyright law.
Yet the IFF report found a mixed picture among digital SMEs. Just 7% believed the current rules were a "barrier to my business innovating" with two-thirds saying they were a "fair way of protecting the rights and interests of creative content originators".
Despite the seeming support for the current regime, more than 60% of digital SMEs backed the call for a change to the rules to introduce a US-style "fair use" policy, which would allow limited access to copyrighted material.
Steve Lomax, a director of IFF, said: "A small but significant minority are of the opinion that their business growth is hampered by the current laws, and one in 20 of the digital SMEs is considering moving their business overseas because of them."
Of the digital SMEs quizzed, 23% have at one stage decided not to pursue a product or opportunity because of copyright issues. It found that three-quarters of digital SMEs had to change a product because of potential copyright infringement.