Thank you for giving me this opportunity to speak with you today.
I will speak, I think, for a little less than eight or nine minutes, simply to give you the background and key points in the review on IP issues that I conducted for the U.K. government. That review was commissioned in October 2010. It reported in May 2011, so just over one year ago. The government broadly accepted the ten policy recommendations of the review, and has subsequently been engaged in detailed pre-legislative consultation, which is not yet complete. The parliamentary aspect of the carrying forward of the review's recommendations remains before us, and therefore subject to the usual uncertainty of that process.
The review itself was commissioned by Prime Minister Cameron, who said that he wanted a review of IP issues that specifically addressed the interface between IP law and its effects on innovation and growth in the economy. So it was a relatively tightly focused review, which we were given six months to complete.
The main points arising from the review were at the cross-cutting level, as it were: the observation that a good deal of decision-making on IP matters in the U.K. has, in my judgment, not been based upon the best evidence available for those decisions and to urge government in the future to avoid that being the case.
There were recommendations in the review on the unitary European patent. That is making very laboured progress through the system in Europe. There were recommendations on the access of smaller firms to IP law advice and systems to support their effective podification in the IP-based economy, and there are some recommendations around the issue of design rights, which the review suggests, in the U.K. context at least, has been a relatively neglected area in IP. But the aspects of the review that have caused most public discussion, because these are the aspects of the review where the conclusions are strongest, are that, in my judgment, U.K. law on copyright no longer fits the purpose, it last having been redrafted prior to the Internet era and therefore, not suprisingly, now showing significant signs of unfitness for purpose in what remains a very boisterous digital age.
The specific sets of recommendations around copyright involve urging the U.K. government to take more advantage than it has in the past been inclined to in terms of activating exceptions to copyright coverage available in the framework of European law within which U.K. law sits. That's one set of recommendations, a set of recommendations designed to release the very substantial buried treasure of orphaned works in different media and various ideas at different levels of legislative difficulty in terms of seeking to find ways of both making copyright law in practice more readily adaptable to further technological change, but also seeking to ensure that copyright law itself is able to be actioned satisfactorily by rights holders whose rights are being infringed through breach of copyright.
The argument that I used on the latter score is that I don't think we are going to get to a position again where copyright infringement ceases to be a major problem, unless and until we also address the respective working of markets in digital content, and to that end, I suggested a major change in approach that actually doesn't require any legislative action, which I called the creation of a digital copyright exchange.
That idea is simply to build upon the very considerable amount of work that is already being done to ensure that in the world of digital content across different media there are interoperable databases that will make it easier, quicker, and lower cost to find out who owns rights, and on what terms they may be licensable, and then to move from that to a database-based trading system. That already exists in some parts of these markets, but it would be to seek to accomplish this on a thorough and cross-media market basis.
The argument of the review is that if these changes are carried forward there will be measurable benefits for the U.K. economy. The economic impact assessment that was done at the time of the review by a small group of economists who were invited to do that estimated that the effect on the U.K.'s gross domestic product will be to add between 0.3% and 0.6% per year of growth to the British economy. This is a set of figures that of course has been much debated. It's a range. It's based on economists' assumptions. But I don't think there has been any serious challenge to the idea that reform of this kind would be economically positive if successfully carried through.
That concludes the remarks I wanted to make before inviting questions from your committee, sir.