The Hargreaves Report - a way forward for IP? Part 2

Another of Prof Hargreaves proposals that seems unlikely to help the SME would in fact attack the SMEs in the professional services sector which he says is so important to the British economy. He is suggesting that SMEs have access to low-cost integrated intellectual property, legal and commercial advice. Currently many small boutique firms do offer cost-effective and sector specific advice and through their networks can introduce their clients to specialists in different fields leading to an integrated approach. The problem seems to be that SMEs in particular find it difficult to identify the better providers. Clarification of the different professional roles and education as to the questions to ask any potential service provider would seem to be an alternative way forward but will never be a total solution : one client may be very happy with the service offered by a well-known fully accredited adviser only for another to be very disappointed because for some reason it was not a good match or the advice did not suit that particular client’s situation. The regime Prof Hargreaves seems to have in mind would again only seem to favour the largest firms as presumably such services would be open to tender which would favour a larger organisation offering a cookie cutter style of advice which the report identifies as one of the problems. This would hit small professional service firms but would also deny other SMEs access to their specialist networks by incentivising them to use a more general provider. Notwithstanding the issues relating to the private sector there does appear to be some opportunity to streamline the various competing public offerings and to expand the IPO’s excellent information and outreach activity. Obtaining advice however has not in my experience proved as great an inhibition to the commercial exploitation of innovation as the costs of obtaining patents and then defending intellectual property rights. Tackling high IP enforcement costs would have a much bigger impact on innovation without stifling the development of innovation in the professional service.

Low-cost enforcement measures would of course be of benefit to all types of companies. So often a client has a clear case but is reluctant to go to court for fear of the associated costs. Last year’s Digital Economy Act is now being implemented and the Hargreaves report suggests that the dispute resolution mechanisms provided in that act should be monitored for effectiveness as part of a general overhaul of how intellectual property disputes can be handled however it recommends that further reform is not delayed as a result. Small claims specialist procedures would naturally be welcome but other alternative dispute methodology should also be considered. Mediation is particularly appropriate for complex intellectual property cases where each party may have some rights but there may be genuine uncertainties as to how a particular situation has arisen or over potential overlap of those rights. In these cases a commercial solution may be more appropriate than damages or an injunctive order. There may also be scope here for industry sectors to look at establishing their own processes as these may be introduced more quickly and with rules more appropriate to their particular circumstances than would be possible in the short-term through legislation. Obviously these alternative mechanisms would only be useful where both parties were agreeable to the process and resolution between those parties alone was required. A private tribunal or mediation of this type could not give a declaration as against the world, for example as to the validity of any particular right. The IPO already offers a number of underutilised services which could be expanded or used in connection with alternative dispute resolution. Of particular value is the fixed fee opinion that may be requested from the office. The report itself envisages an expansion of the IPO’s role and an ADR regime similar to that operated by WIPO would seem a very natural step. T a he report however sees the IPO’s future role more in monitoring and promoting the development of IP regulation. While it makes a lot of sense to establish an obligation within the IPO to monitor and review how the law is working and to make recommendations in much the same way as the Law Commission, after all the officers of the IPO have more expertise in this area than any other group, it does not seem to me appropriate that they should be encouraged to provide the proposed statutory opinions. Although the intention is that the opinion should not be binding this would be getting close to lawmaking and something that constitutionally should be left to an elected parliament.

What then of the future? the government has welcomed the Hargreaves report but that does not of course mean that its recommendations will be implemented, the Gower report was also welcomed by the government of the day and less than half of its recommendations have found their way onto the statute book. It seems likely that the government will continue to press for the introduction of a European patent court and it seems equally unlikely that any changes will be introduced with respect to the scope of patents. Other matters such as increasing the exemptions to the copyright regime within the EU framework and undertaking a review of the relationship between design rights and innovation could be adopted very easily and it will simply be a matter of whether the government is inclined to pursue these matters. Moving to slightly more complicated matters improved dispute resolution systems and the licensing of orphan works could again be tackled by the UK Parliament without too much trouble however some of the other proposals are perhaps more complex than the report acknowledges: the concept of treating some patents or patent applicants in different ways to others raises a slew of issues while the copyright exchange while having many attractive features would be complicated to set up, market and manage and it may be optimistic to assume that even with political will anything substantive would be in place by the end of next year however we shall have to wait and see what happens next.

< back to Blog