15/02/2007

Rock stars shine spotlight on UK intellectual property shake up

Matthew Howarth, intellectual property partner

A 150 page report on the future of intellectual property (IP) rights in the UK called the Gowers Review has recently been published. For those of you who have not spent your free time reading it, you could be forgiven for thinking the Review only impacts upon performing artists thanks to an advertisement placed in the Financial Times by the likes of U2 and Paul McCartney.

The advertisement complained about the Review’s decision not to extend copyright protection for performing artists from 50 to 95 years. However, the Gowers Review is concerned with much more than just rock stars’ royalties and has wide-reaching implications for businesses of all sizes, across all industry sectors.

IP covers a wide range of knowledge-based intangible assets. It can be complicated, riddled with jargon and often unintelligible to those outside of this specialist area. This is one of the criticisms raised by the report and it calls for greater accessibility and understanding of the importance of IP rights.

The Review notes that there has been a massive increase in the importance of this ‘knowledge capital’ which adds significant value to businesses. Up to 70% of a typical company’s value now lies in intangible assets such as brand, goodwill, reputation and knowledge. This is a figure up from nearly 40% in the early 1980s.

The Review raises the very real problem of the length and expense in obtaining and protecting IP rights. One example is the suggestion for a fast track procedure to obtain registered trade marks. Currently, it may take between six and nine months to obtain a registered trade mark in the UK.

This may present difficulties for businesses who wish to go to market with a new brand and registered trade mark much sooner than this. The Review suggests that a fast track procedure – taking no more than 10 days – should be introduced to allow the registration to take place in a much shorter timeframe. The proposal is short on details but as a principle it should be welcomed.

Turning to the area of the costs of protecting IP rights, the Review acknowledges that in many situations these costs can be prohibitive. It is not unheard of for IP disputes to take many months – or even years – to reach a final decision before a court. The costs associated with such litigation can be substantial. The Review recognises this and recommends the adoption of a fast track litigation process that seeks to encourage a final resolution of a dispute in a much shorter timeframe.

The Review also appreciates that in some circumstances the damages that can be awarded by a court for infringement often do not reflect the true damage caused. Other jurisdictions – notably the United States – adopt a more punitive approach to damages in an effort to encourage infringers not to carry out their infringing activity. The Review recommends that a more effective and dissuasive system of damages should be considered.

Whilst the report could not properly be considered to be an ‘unputdownable page turner’ it is a useful and welcome review of the current IP landscape within the UK. It highlights the value of IP for all manner of organisations and the very real need to make IP an accessible and intelligible area given the increasing importance of its value to businesses.

Whilst U2 may still not have found what they were looking for, IP is an issue of importance and relevance to everybody and the report should be welcomed for raising the prominence of IP in the marketplace.

For further information please contact Matthew Howarth at matthew.howarth@gordonsllp.com