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JILT 1998 (1) - Innovation, Incentive and Reward

Innovation, Incentive and Reward

Intellectual Property Law & Policy

Edinburgh 31 October 1997

Reviewed by
Megan Macgregor
Napier University
me.macgregor@napier.ac.uk

Contents
1. Introduction
2. Programme Schedule
3. Feedback
4. Discussion Groups
  4.1 The Arts and Performing Industries
  4.2 Biotechnology
  4.3 Role of the Collecting Societies
  4.4 The Role of the Patent Office
5. Conclusion

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This is a Conference Report published on 27 February 1998.

Citation: Macgregor M, 'Innovation, Incentive and Reward:Intellectual Property Law & Policy', Conference Report, 1998 (1) The Journal of Information, Law and Technology (JILT). <http://elj.warwick.ac.uk/jilt/confs/98_1ipr/>. New citation as at 1/1/04: <http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/1998_1/macgregor2/>


1. Introduction

This conference was organised by Professor Hector MacQueen of the David Hume Institute in Edinburgh and was held on 31 October 1997. The aim of the David Hume Institute is to provoke debate and promote research into the legal and economic aspects of key policy considerations.The purpose of the conference entitled 'Innovation, Incentive and Reward: Intellectual Property Law and Policy' was to consider a number of controversial themes including the exploitation and commercialisation of ideas and inventions in fields as diverse as the performing arts and the biotechnology industries. The delegates included intellectual property lawyers, academics, industry professionals and researchers which lead to a lively exchange of views between the creators of intellectual property and those who advise them in key areas of development and protection.

2. Programme Schedule

The central addresses were contributed by Professor Bill Cornish of the University of Cambridge, possibly the most famous academic commentator in this area and Mr Justice Laddie, Patent Judge in the English High Court , known particularly for advocating restraint in the application of intellectual property laws.

In addition to the principal speakers the conference hosted six separate discussion groups which were chaired as follows -

(1) Information Technology - Professor Ian Lloyd, University of Strathclyde and Mrs Charlotte Waelde, University of Edinburgh

(2) Biotechnology - Mr Ron James of PPL Therapeutics Ltd , Mr Ian Karet of Linklaters & Paines, Solicitors and Mr Graeme Laurie, University of Edinburgh

(3) The Arts and the Performing Industries - Ms Ruth Towse, University of Exeter and Sir Alan Peacock of the David Hume Institute

(4) Commercialisation - Peter Denyer of VSLI Vision and John Adams of the Intellectual Property Institute

(5) The Role of the Patent Office - Mr Paul Hartnack, Comptroller General of the UK Patent Office

(6)The Role of the Collecting Societies - Lord Gill, Judge in the Court of Session, Scotland and Ms Ruth Towse, University of Exeter

The discussion groups were designed as forums within which to discuss current issues in intellectual property. Many of the groups were scheduled to run at the same time which created practical difficulties in that many delegates were interested in more than one subject area. The writer enlisted the help of Ms Amanda Warren of the Cardiff Law school who attended the Biotechnology and the Role of the Patent Office sessions and generously contributed her own comprehensive notes for the purposes of this report. The writer attended the two other group sessions discussed below.

3. Feedback

Delegates communicated informal feedback during the lunch period. IT professionals who attended the Information Technology session were somewhat disappointed that the meeting focussed primarily on the legal aspects of Internet technologies to the exclusion of other issues namely software piracy and enforcing confidentiality in outsourcing agreements. It would seem that in the vast realm of the IT industry the intellectual property issues are so diverse that an hour long slot is simply too brief to address all concerns.

The organisers were congratulated for ensuring that the programme ran smoothly and completely to schedule. Furthermore, delegates greatly appreciated the assistance given by Edinburgh University law students who graciously provided directions to the various venues in which the discussion groups were held. Finally, the superb three course lunch was a very welcome departure from the more usual quiche and canapes. It is deeply regretted that there was not enough time to take full advantage of the desserts offered!

4. Discussion Groups

4.1 The Arts and Performing Industries

Intellectual property rights distinguish themselves from other property rights to the extent that their protection and enforcement are dependent on the prevailing judicial views relating to public benefits. The unresolved conflict in copyright law is whether the artist or author should be allowed a monopoly to exploit intellectual creations or whether the exercise of monopoly rights will restrict the flow of information and prevent public access to important material. This seminar focussed on the protection of the rights of performers and musicians. It was submitted by various participants (most notably Justice Hugh Laddie) that in the music industry the true benefactors of the copyright system are not the musicians themselves but record companies. A few people were of the view that this was appropriate since the financial risk in signing and promoting new musical acts was borne by the record companies and that they should therefore benefit from the success of their signees. While this may make sense in economic terms it is not wholly reconcilable with the avowed aims of the intellectual property system which concentrates its attentions, traditionally, on rewarding the author/creator.

4.2 Biotechnology

The biotechnology industry has received considerable media attention in the last year. Winsome pictures of Dolly the Sheep have captured the public imagination in much the same way as in-vitro fertilisation did over twenty years ago. Ron James of PPL recounted his experiences with the famous ewe and other animals, with an emphasis on attempts to obtain patents in relation to pioneering biotechnological processes. It is well documented that UK biotechnology concerns are at a distinct disadvantage in a market place dominated by North American companies. This is partly due to the tendency of the US courts to permit very wide patents in respect of biotechnology inventions. Wider claims are permitted in the US than in Europe and the spectre of the morality exclusions do not seem to loom so large over American companies. Mr James expressed concern over the extortionate costs of patenting and suggested that a solution might be the introduction of a one application world-wide patent system with a single central dispute resolution mechanism although the floor countered that this was unworkable in the light of political difficulties in reaching agreement in these matters.

Contributions from delegates to the discussion concentrated on resolving the present practical difficulties of obtaining patents in UK and Europe. The lack of specialist examiners with knowledge in high technology fields was given as a reason for treating biotechnology and software applications as special cases in patenting terms. The exclusion of morally questionable inventions provoked the most discussion - research involving humans and animals will continue to be criticised in certain quarters but it must be remembered that the purpose of the patent system is to reward inventors for their work by allowing them to achieve a return on their research and development costs, which will in turn encourage further innovation. If morally unacceptable inventions are to be prevented this should be open for public debate and scrutiny. No agreement was reached relative to the means by which this should be achieved

4.3 The Role of the Collecting Societies

There are at present 20 societies in the UK administering the collection of royalties from the users of copyright works. The collection agencies enjoy a virtual monopoly since individual copyright owners do not have the means at their disposal to administer such schemes on their own behalf. A comparison was made between the status of the collecting agencies and the public utilities companies. A natural monopoly should, in economic terms, lead to falling costs in the provision of services although the experience of small business such as shops and restaurants has been that the collecting societies impose unnecessarily high costs on the users of copyright material. At the same time, new technologies can be used increasingly to reduce the costs associated with reproduction of copyright materials. Rather than cutting costs there has been a move towards the creation of more powerful bodies responsible for collection of royalties throughout Europe.

Is the monopoly position working in favour of individual performers or are they suffering the effects of the collection agency monopolies to the same extent as the potential users of copyright materials? The evidence seems indicate that neither the creators of copyright works nor the end users seem to benefit from the present regime. Small businesses suffer because there is no real regulatory mechanism in place to limit the licence fees demanded by the collection societies and accordingly they are charged more for the use of material than they would be in a truly open market place.

The justification for copyright has always been that the creator of original work should benefit economically from the fruits of his/her labour but it seems, particularly in relation to bodies such as the Performing Rights Society, that the copyright owner must choose either to accept that the PRS will collect royalties on their behalf or be faced with the monstrous task of self-administration. Lord Gill, a previous member of the Copyright Tribunal, stated that it was rare for potential licensees to challenge the fees imposed by collection agencies. The unanswered question seems to be whether a transnational system would improve matters for the performers or whether it would lead to an even more unassailable monopoly situation.

4.4 The Role of the Patent Office

Paul Hartnack, Comptroller General of the UK Patent Office stated that the patent system was founded in technology transfer and considered that inventors in the USA and Japan were the true beneficiaries of the European patent system. Despite the fact that European countries have a single market mechanism there are barriers to trade within the EU which do not affect the USA and Japan. Duplication of research within European states is a direct result of the language barrier whereas in the USA and Japan there is a single technological and linguistic base. The ability to submit a greater number of patents for European protection means that the USA and Japan are enjoying a market advantage at the expense of their British competitors. Proposals for change include the wholesale reformation of European Patent law by introducing a registration only system to be operated by a privatised, commercial body. Other remedies suggested include the establishment of a single European Patent Court which would act as a court of appeal and interpret European law in respect of patents.

5. Conclusion

Historically, one of the underlying justifications for intellectual property law is that it promotes initiatives within the science, engineering and technology industries . There will be increasing moves towards knowledge based products in the next century. Fiona Nicholson of MacLay Murray & Spens, Solicitors has undertaken research into the level of intellectual property awareness in major Scottish companies. According to her research, more than 90% of Scottish companies are conversant with the concept of intellectual property and at least 80% believe that the protection of IP is important to their business. In spite of this, only half the companies surveyed indicated that they would seek professional advice to enable them to fully exploit or protect their intellectual property. Is the present system failing to safeguard our economic future?

Copies of Innovation, Incentive and Reward: Intellectual Property Law & Policy are available from the David Hume Institute.

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