Hargreaves’ Report and The
Digital Copyright Exchange
PRESENTED BY
ELISE BAUN
UNIVERSITY OF CONNECTICUT SCHOOL OF
LAW
Hargreaves Report – Introduction
 Prime Minister David Cameron Commissioned the
Review in 2010.
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The United Kingdom was worried about falling behind in IP
reform.
There have been four major reviews in the past six years.
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Gowers Review – 2006 – 25 of 54 recommendations followed
 Prime Minister Cameron asked Professor
Hargreaves’ of Cardiff University in Wales to conduct
the review.
Hargreaves Review – Introduction
 Review was published in May 2011.
 Sought to answer Prime Minister Cameron’s question of:
Could it be true that laws designed more than three centuries
ago with the express purpose of creating economic incentives
for innovation by protecting creators’ rights are today
obstructing innovation and economic growth?
 Professor Hargreaves’s report answers “yes” and
issues ten recommendations.
Hargreaves Review – Recommendations
 Evidence
 International Priorities
 Copyright Licensing
 Orphan Works
 Limits to Copyright
 Patent Thickets and Other Obstructions to Innovation
 The Design Industry
 Enforcement of IP Rights
 Small Firm Access to IP Advice
 Any IP System Responsive to Change
Hargreaves Review – Evidence
 Previous IP policy changes did not look to
substantive evidence.
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Gowers Review also noted the lack of substantive evidence.
 Professor Hargreaves sent out a call for evidence to
evaluate what IP regimes needed change.
 He determined that the Intellectual Property System
is driven by objective evidence.
 Policy should balance measurable economic
objectives against social goals and potential benefits
for rights holders against impacts on consumers and
other interests.
Hargreaves Review – Copyright Licensing
 The United Kingdom should create a Digital Copyright
Exchange.
 The United Kingdom should support the European
Commission in decisions establishing a framework for
international copyright licensing.
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This should benefit the United Kingdom as a major exporter of
copyright works.
Collecting societies should be required by law to adopt codes of
practice.
These should be approved by the Intellectual Property Organization
and the United Kingdom competition authorities.
 This will ensure that the codes of practice are consistent with the
further development of efficient, open markets.
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Current Issue - Licensing
 The process of copyright licensing is not currently fit
for the technological age.
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Expensive
Difficult to use
Difficult to access
Insufficiently transparent
Siloed within individual media types
Victim of a misalignment of incentives between creators, rights
owners, rights managers, and end users
Insufficiently international in focus and scope
Current Issue - Licensing
 Because licensing is not fit for the digital age, this
creates problems.
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The market share is smaller than it could be for right
owners/managers.
The market share going to rights owners is smaller than it
could be.
New digital businesses within the creative industry are being
held back.
Innovation is being held back.
Infringement of copyrighted content remains persistent.
There is a misalignment between creators, rights owners, right
manufacturers, rights users and consumers
Hargreaves Review – Orphan Works
 Orphan works are works in which the owner of the
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copyright cannot be found.
There are over 25 million orphan works in private
collections in the United Kingdom.
The physical state of these works is increasing decayed,
because there is no access to copyright licensing.
These works include scientific papers. Lack of access to
these papers can stunt scientific research.
Government should legislate to allow for licensing of
Orphan Works – preferably in the Digital Copyright
Exchange
Hargreaves Review – Copyright Exchange
 The United Kingdom needs a digital copyright
exchange because technology has transformed
copyright usage.
 Infringement is widespread, and most individuals do
not understand the United Kingdom copyright laws.
 Small and Medium Enterprises have a strong barrier
to the copyright market due to an inability to
negotiate for licensing rights.
Digital Copyright Exchange
 The government should appoint a well-respected
individual to oversee the design and implementation
of a digital copyright exchange by the end of 2012.
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This exchange must either be private or semi-private and
initiated by the government.
 Governance should reflect the interests of
participants who would work to an agreed code of
practice.
Digital Copyright Exchange
 The Digital Copyright Exchange would be a website or a
series of websites where licensors could set out the rights
they wish to license and allow licensees to purchase those
rights.
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A “one-stop shop” to license copyrights.
 Licensees would be able to:
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Look for different types of content across different media
Define and agree what use they wish to make of licensed data
Be a quoted a price for this use
Pay for the rights online
Have the content delivered in an appropriate format
Report back to licensor on how the content was used
Digital Copyright Exchange
 The Exchange would be funded through a usage
charge, but this would not cover start-up costs.
 The United Kingdom’s government could legislate
many incentives to join the Digital Copyright
Exchange, but participation could not be mandatory
under the Berne Convention.
 The Exchange would include licensing of orphan
works.
Issues with Digital Copyright Exchange
 Who is the highly respected figure in charge of this?
 How will orphan works be treated under this system?
 Do standardized offerings create a lack of
negotiation?
 IP operates internationally, must a comprehensive
Digital Copyright Exchange must as well?
 Will this combat infringement at the private level?
Issue - Leadership
 Who should be in charge of creating the exchange?
 Stock Exchange
 Google or Amazon
 Small Start-Up Similar to ICANN
 What incentive is there for a private company to
establish the Exchange if there is no revenue from
creating it?
Issue – Orphan Works
 By allowing for a nominal usage fee, this essentially
ensures that orphan works are entered into the
public domain.
 Most photographs would not be registered on the
Exchange.
 If the only requirement to establish a work as orphan
is to search the digital copyright exchange, this could
create numerous problems.
Issue – Standardized Formatting
 You have to buy more than one license for most
works.
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A sound recording has a composition license and a sound
recording license.
Movies and television require even more licensing.
 The Review seems to suggest that these licensing
transactions will be uniform rather than
individualized.
Issue - Internationality
 Copyright licensing is increasingly international.
Any Digital Copyright Exchange that operates on a
National, rather than International, level will be
incomplete.
 This might be difficult because each country has its
own set of rules for copyright licensing.
Issue – Infringement
 One goal of creating the Exchange was to stop
widespread copyright infringement. Does the
Exchange work to do this?
 Short answer: It should.
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The Exchange should lessen the barrier to entry for many
companies to reproduce copyright works. This savings should
be transmitted to the consumer.
If companies are able to obtain a copyright cheaply and easily,
they will be more likely to buy a license for the copyright.
 There must be penalties for those who do not pay on
the Exchange and for those who infringe.
Conclusion
 A Digital Copyright Exchange is inevitable. The
United Kingdom wants to be the first country to
achieve this and gain ground in the field of
Intellectual Property.
 A Digital Copyright Exchange is feasible with current
technology.
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It would be a one-stop shop for Copyright Licensing
It should be International
Created by a well-respected individual with input from
Industry Heads
Questions or Comments?