David’s fair use Silicon Valley dream

On Thursday David Cameron launched a review of Britain’s IP law during an announcement about creating a Silicon Valley in London’s East End. The review is due to report in April next year. According to the BIS press release the review will look at:

· Barriers to new internet-based business models, including the costs of obtaining permissions from existing rights-holders;
· The cost and complexity of enforcing intellectual property rights within the UK and internationally;
· The interaction between IP and Competition frameworks;
· The cost and complexity to SMEs of accessing services to help them protect and exploit their IP.
· The review will also look at what the UK can learn from the US’s “fair use” rules covering the circumstances in which copyright material may be used without the rights-holder's express permission.
· The review will make recommendations on the changes the UK can make as well as the long-term goals to be pursued through the international IP framework.

There is clearly a risk here of reinventing the wheel – apart from anything else by re-running the substantial recent reports generated by the EU and the Labour government. However, some of these areas have not figured particularly large in Labour’s reports: cost of enforcement, competition law and ‘fair use’.

It was the fair use point that the Prime Minister chose to home in on in his speech:

‘The second new announcement I can make today is to do with intellectual property. The founders of Google have said they could never have started their company in Britain. 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. Over there, they have what are called “fair-use” provisions, which some people believe gives companies more breathing space to create new products and services. So I can announce today that we are reviewing our IP laws, to see if we can make them fit for the internet age. I want to encourage the sort of creative innovation that exists in America.’

Once you get over the distracting mixture of business and law-making (Google, the driving force for revisiting copyright law, also turns out to be putting up the cash for an ‘Innovation Hub’ in the East End), how does this stack up?

1. Have Britain’s laws presented a particular problem for Google’s search engine? Theoretically a question mark hangs over whether search engines are in conflict with European copyright law (the Advocate General in the Google AdWords cases explored this point, while the English judgment Metropolitan International Schools v Designtechnica took the view that a search engine wouldn’t be protected by the hosting defence of the E-Commerce Directive). But in practice Google's search engine has hardly been beseiged by litigation here.
2. Google’s search engine does have legal approval in the US but is ‘fair use’ the reason? When Google was sued over caching, fair use did feature in one case but the more important argument has been that website owners are giving Google an implied licence because they can easily disable the caching. This is an argument that Google could use if it ever found itself in court over its search engine in the UK.
3. If David Cameron wants to give Google’s search engine a clear green light he’d do better to argue in Europe for a copyright exception for search engines. If we had fair use, it would be up to a judge to make the call – he might say it wasn’t fair use.
4. Would fair use make such a difference to foreign investment? As Mark Owen points out, changing tax law might be more relevant. In a report commissioned by the Labour government on the economics of copyright it was found that quantifying the relative economic effects of specific details of copyright law was extremely difficult if not impossible.
5. Fair use is characterized by its flexibility compared with the certainty of the European exceptions: that means the only way you arrive at certainty is litigation. Is it perhaps therefore better suited to the US, where courts hum with copyright litigation? The UK has a fair dealing court case once in a blue moon.
6. Most importantly, introducing a fair use copyright exception will not be easy: it would require an overhaul of the copyright law of 27 European states.

The report’s investigation into the costs of enforcement on the other hand looks more promising…