Business, Innovation & Skills Committee - Minutes of EvidenceHC 367-i

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Oral Evidence

Taken before the Business, Innovation and Skills Committee

on Tuesday 18 October 2011

Members present:

Mr Adrian Bailey (Chair)

Mr Brian Binley

Paul Blomfield

Katy Clark

Rebecca Harris

Margot James

Mr David Ward

Nadhim Zahawi

________________

Examination of Witness

Witness: Rt Hon Professor Sir Robin Jacob, Sir Hugh Laddie Chair of Intellectual Property Law and Co-Director, Institute of Brand and Innovation Law, University College London, gave evidence.

Q69 Chair: We are a couple of minutes early so perhaps I can take a couple of minutes to formally welcome you, Sir Robin. We appreciate you giving your time. For voice transcription purposes, so that we can get the right level, could you introduce yourself?

Sir Robin Jacob: Good morning. I am Robin Jacob. You probably know what I did once: I was a barrister for a long time at the Intellectual Property Bar, as it is now called-we used to call it the Patent Bar. I became a judge in 1993; First Instance Judge for 10 years, some of which was concentrating on IP, and four years off to Birmingham, Bristol and Cardiff doing more general commercial-type cases. Then I became a member of the Court of Appeal until last May when I made a big decision-I had another five years theoretically-that I could take on this job at University College. I miss the Court of Appeal. I have missed every job I have ever stopped doing, but I am loving my new job and I think there is quite a lot to be done in teaching-not just teaching people from the United Kingdom, because these days the subject is very much international. Many of our classes have hardly any Brits in them at all. That is how it really is: there are many from China, America and continental Europe.

Q70 Chair: Good, and if it is any consolation, one benefit of your new post is that you have the opportunity to be interrogated by a Select Committee, an experience that perhaps is not universally loved.

Sir Robin Jacob: Well, I remember being interrogated by Law Lords in time past.

Q71 Chair: Right. Yes, I am sure if there is anybody capable of handling interrogations, it will be you. Anyway, I will start with a couple of very general questions. Can you tell us about the particular perspective that you feel that you can offer on intellectual property law and strategy?

Sir Robin Jacob: I suppose partly because I have been around in it for such a long time, one of the things you get to feel is that some of the problems that are said to be so new are not actually that new. They have been around a long time, some of them for centuries-patent thickets, for example. Boulton, driving the company of Boulton and Watt, surrounded himself with a patent thicket. Edison surrounded himself with a patent thicket: over a thousand patents; they were not all for good inventions or useful inventions. We will come back to that later, no doubt, but I can bring you a perspective from when I was a young barrister seeing small companies, middle-sized companies, big companies from the inside, being with their management, from doing the big cases as a QC, and from seeing many different sorts of cases as a judge, with big people and little people. That is what I have done.

Q72 Chair: What is your general observation and assessment of the Hargreaves report and the Government response to it?

Sir Robin Jacob: I will start off with the Hargreaves report. I must say I was astonished when it was announced; we had a similar report done only two years earlier. The first observation I would make is that increasingly there has been a tendency by Governments and non-lawyers to think of all intellectual property as the same sort of thing, all coming under the same label. That was not the pattern in the past; you would have somebody looking at copyright law or patent law or trade mark law or design law, and they were seen for what they actually are: quite different subjects. All sorts of things follow from that. They have one thing in common: they are all laws about stopping people doing things, and it is not self-evident in a competitive economy that you want laws stopping people doing things. But the things you are stopping people doing are quite different sorts of things.

So I was astonished that Professor Hargreaves was asked to do the whole of IP in six months. It was not possible, and the consequence has been-although I think he has done a pretty good job considering the constraint, particularly the time constraint-that the level of discussion has been a very general one. It is a bit like the centipede with 100 legs and arthritis who goes to all the animals in the forest saying his pain is very great, and they all say only the fierce and wise owl can help. So he goes to see wise owl: "Wise owl, wise owl, I’ve got pain in all my 100 legs." "Simple: turn yourself into an insect." And he turns, turns back: "Wise owl, how do I do that?" "Don’t trouble me with detail." The Hargreaves report is very much on that level. I thoroughly think that we should, and we should have had some time ago, a serious review of what we can and should do about the breakdown of copyright caused by the internet.

Q73 Chair: Following on from that, the implication is that it was too big a field. From your perspective, if you were asked to produce your own review, what would you have focused on?

Sir Robin Jacob: As Professor Hargreaves has done, I would have said, "I am not going to touch patents." If I want a review of patents, that is now a purely European question. The UK has almost no room to manoeuvre in patents. We will come back to the subject of a possible patent court for Europe. As regards trade marks, the position is much the same, although I am rather unhappy about the way things are going, but I will come back to that.

The one area where we may have some room to manoeuvre and where attention is needed-on a worldwide scale, not just in this country-is the problem of the internet and copyright, and the future problems of that because we have only just begun. My sons run a small record business. I said to my son, "What shall I say to this Committee about what we should do about copyright?" He said, "It destroyed the music industry 10 years ago." We are now looking at what we should be doing about it-or we were looking at it-and I am not sure that much can be done.

Professor Hargreaves does not really deal with what can be done about it at all. The one area where one might be looking, but it may have to be international, is if you cannot shoot the man who posted the letter, you may have to shoot the postman-that is to say the ISPs and other people involved, particularly where the money transactions are concerned, because the internet has also affected counterfeiting of goods, not just copyright; now we are into trade marks. Where the banks and the credit card companies get involved, they are all taking money on transactions involving the sale of counterfeit goods. There is a possible target there-I am not saying they should be made a target, but it should be looked at. They would pick their customers more carefully.

Q74 Chair: Could I just pick up there, because in response you said that Hargreaves had focused, I got the impression, on what you would have, but you then went on to say that you would have concentrated on future problems, internet and so on.

Sir Robin Jacob: Existing and future problems; problems that have come up since the last Copyright Act. Copyright has always been a response to technology. You do not need laws about stopping people copying when they have to write it out one by one as in medieval times. The first modern copyright act was a British Act, the Statute of Anne, in response to the great increase in engravings, and the technology was engraving. It was the early equivalent of our digital position now. Hogarth, who was the great promoter, thought he was being ripped off something terrible and he wanted a law to stop it, and he managed to persuade Parliament to do it.

Q75 Chair: The implication of what you are saying though is that, in effect, Hargreaves has addressed past problems but not adequately advised on future problems.

Sir Robin Jacob: No, I do not say that. We cannot tell where everything is going to go-the way technology is going to go. He does talk about trying to make copyright law future proof. I do not understand what he means. I think it is floating some general idea that the courts would have some general discretion to say, "No, this is no infringement"-the American approach of fair use; you leave it to the judges to decide what is fair use. Well, that is a pretty rough and ready test. Americans themselves find it a very difficult area because they do not know what fair use is. There is a lovely cartoon of a young man climbing up some mountain in the Far East upon which sits a guru with a loincloth. His question to the guru is: "What is fair use?" I think the approach that we have had historically of identifying uses that we are going to exempt from copyright infringement is useful.

It is worth remembering that all these rights line up in parallel and can be fired at potential defenders. Anybody who wants to do anything has to think of all the different people who might want to shoot at him using one of these guns. One of the troubles of some areas of copyright in particular is that it is too powerful. There ought to be cases where the answer is some money, not an injunction-it may not necessarily be a lot of money. You can find this problem existing in patents. There are huge quantities of mobile telephone patents at the moment, many of which are invalid. People are buying up the patents in order to sue the big telephone makers, and as you probably read in the papers, there are mobile phone wars going on around the world. Some of it is caused by the fact you can get an injunction, and there is nothing like negotiating with somebody with your foot on their neck after you have got an injunction.

Q76 Mr Ward: Before we get into detail, you said it is about laws about stopping people doing things. Is there an argument that they are laws about encouraging people to do things?

Sir Robin Jacob: Yes, there are two ends of the telescope. One end of the telescope is called monopoly. Monopoly sounds bad. The other end of the telescope is called protection. That sounds good. The truth is it is bad for the economy if it is too powerful one way or the other. You do need protection; there are no two ways about it. If you create something, you need an incentive to do it. That is why we have copyright, at least that is the British view as to why we have copyright, because there are more complications coming yet in this subject.

A more continental, particularly French view, would be that we have copyright because it is actually part of your personality, the thing you have created. The French view of copyright is more restrictive than our view precisely because of that. I think quite a good example is a John Huston movie that was in black and white, and somebody produced a colourised version. Huston had been dead for a number of years. His heirs brought an action in France to stop that colourised version being put out, because that is, they said, something he would not have wanted.

That is quite a restrictive view and done on the basis of personality and creativity and not, as the more common law-English, or American also-view would be, that copyright is essentially an economic tool, encouraging people to write things, encouraging publishers to publish things. It is not much good publishing a thing if you get copied straight away, as Dickens was and as all our authors were in the nineteenth century in the United States. Dickens never got a penny from the United States and was always very angry about it, because they had a rule that you can only have copyright if you first printed in the United States, to encourage the national printing industry.

Q77 Mr Binley: It is a very general point but one that has confused me. In the report there is a particular paragraph on not seeing a difference between the printed word and recorded music or whatever, and in fact the report says, "It is difficult for anyone to understand why it is legal to lend a friend a book, but not a digital music file." But are we not talking about a different history for both of them, and should they be placed together in that way, because it seems to me that at some stage somebody has bought a book, but very often there is hardly any price to be paid for recorded music, for instance?

Sir Robin Jacob: I think you are right and it is not as simple as that. You do not lend somebody-

Mr Binley: That is exactly it.

Sir Robin Jacob: They make another copy and then they lend it to somebody else, whereas the book is physically limited. There is a huge difference between the two.

Q78 Mr Binley: So that is a rather odd thing to say then, in this context?

Sir Robin Jacob: It is. You are quite right.

Mr Binley: Okay.

Chair: Can I bring in Nadhim Zahawi on the UK IP framework and whether it is falling behind? You have touched on this already.

Q79 Nadhim Zahawi: Professor, you have touched on it and your views are pretty forthright on these things and very helpful, so thank you. Professor Hargreaves’ report says that the UK intellectual property framework is falling behind.

Sir Robin Jacob: He says it generally, but it is not true-it is not true of patents.

Nadhim Zahawi: Right.

Sir Robin Jacob: I do not agree with the way that trade marks is going, but it is not falling behind at all. He is thinking about copyright only. He is worried about designs; he has not much to say about designs except something ought to be done about them, but he has not got any evidence of any kind whatever that suggests it is falling behind in any way, except in the area of copyright.

Q80 Nadhim Zahawi: Interesting. He told us that the direction needs a 25-degree adjustment, not a complete turning inside out. Presumably that is where you are headed?

Sir Robin Jacob: I would not say it was as bad as that. I think there are huge problems about industries that can be readily copied on the internet. That is where the problem is and that is what needs to be looked at as a whole. It needs to be looked at from the point of view of who can be liable-as I mentioned, possibly shoot the postman; what we should allow because people are doing it anyway, such as format shifting; what the international implications of all this are, because this is such an international business now, and the internet is international, that the idea the UK can do its own thing is past it.

Q81 Nadhim Zahawi: I was going to bring you on to the supplementary. What you are saying, if I am understanding you correctly, is the problem is with enforcement-

Sir Robin Jacob: Yes.

Q82 Nadhim Zahawi: -because of new distribution platforms. It is not so much with the categories of rights available?

Sir Robin Jacob: Yes. No, it is not.

Q83 Nadhim Zahawi: Right. Well, that is clear.

Sir Robin Jacob: That is why Professor Hargreaves has got this idea of the digital exchange.

Q84 Nadhim Zahawi: We are going to come on to that.

Sir Robin Jacob: We will come to that later.

Nadhim Zahawi: We would like to probe a little further.

Sir Robin Jacob: Okay.

Q85 Nadhim Zahawi: Professor Hargreaves and the Government are agreed that the evidence should drive policy to a greater extent than has been the case-evidence-based policy.

Sir Robin Jacob: Can I butt in there because I have some considerable-

Q86 Nadhim Zahawi: Well, I was going to ask you what the challenges are for that.

Sir Robin Jacob: Well, they all talk about evidence-based policy; it is an "in" word. Everybody says they want evidence-based policy for absolutely everything these days, but I am not sure I know what evidence is. I mean as a trained scientist I know what it is: you measure things, and if you want to know how long this thing is here, you measure it. The rule you are taught about is: measure it 100 times and you will get a better result than if you just do it once. You take an average. But you cannot do that sort of thing here.

The suggestion is that somehow economists would be able to help a lot on this. There are some amazing numbers in the Government’s response, and I do not believe that there is any reliable basis for any of those, I am sorry to say. I can remember when the Trade Marks Act was introduced in 1994. The Minister said it was going to save British industry £30 million a year. I shouldn’t think there is a single trade mark department in any company that is smaller now than it was then. I think they are all bigger. Somebody gave the Minister that figure. I said at the time I did not believe it and I am afraid some of these numbers in Hargreaves I do not believe. I do not know whether you have probed into where those figures came from and how robust they are-to use another modern word-but I cannot prove it and I do not believe anybody can prove it.

Some of the law of intellectual property is done by gut instinct or feeling. I spent all my life wondering whether the patent system is terribly wonderful. We have got it. It is certainly good for some. Is it good for everybody? I do not know. The Silicon Valley grew up in the United States with nobody enforcing any patents at all. It was just who could run fastest. So there are real difficulties about concrete evidence as opposed to the lobbying of interest groups.

Q87 Nadhim Zahawi: That was my supplementary.

Sir Robin Jacob: If somebody said to me, "Please distinguish between evidence and the lobbying of interest groups," I cannot help you.

Q88 Nadhim Zahawi: Professor Hargreaves described it as "some of the most skilful and influential lobbyists in the UK political scene" and "lobbynomics". From what I hear from you, you are agreeing with that?

Sir Robin Jacob: Yes.

Q89 Nadhim Zahawi: I take your point on board that we should be cautious when we look at economic modelling, and I think you are quite right in many areas of policy. I think one can show as many pieces of evidence that show economic modelling going haywire-

Sir Robin Jacob: Quite so.

Q90 Nadhim Zahawi: -as actually being true to the claims. So thank you for that, Professor.

Sir Robin Jacob: I think the Government should be very careful about looking at any numbers anyone puts forward for anything. As a scientist, you say, "Well, where did you get the number from and how did you measure it?"

Q91 Nadhim Zahawi: Can I just ask you one last question on this? On your point about looking at very specific areas, which is the internet, because there lies the problem-

Sir Robin Jacob: There lies the problem.

Q92 Nadhim Zahawi: -should Government be looking at criminal legislation, rather than civil, because one of the ways you can protect consumer versus business or the abuse of rights with such a powerful distribution platform-where anyone can essentially break rights; the whole world can-is by looking at some form of criminal reprimand.

Sir Robin Jacob: Well a certain amount of copyright infringement is already criminal. It has never been very successful. Putting it bluntly, Inspector Plod is not very good at copyright law. Years ago I went down and assisted in a case of prosecution of a famous comedian and somebody else, and they were dealing in films. They were actually just film buffs really, but they were dealing in old films and they got themselves prosecuted for dealing in copies. Of course, the prosecution failed to prove there was any copyright, so the whole prosecution collapsed midstream.

More recently I sat in the Court of Appeal: a three-day prosecution had been conducted in Bristol against a young man who upstairs in his parent’s house was converting Xboxes so that they could read games without having to pay. He was prosecuted, and the prosecution failed to prove a simple, essential fact: namely that this little device enabled people to make copies that appeared on their computers at home. They were running a much more general case, and this young man was let off on the grounds he would not do it again, roughly speaking. A three-day prosecution and, because it was technical, they got it wrong. So I am not in favour of criminal prosecutions at all.

There has been some pressure in Europe-a more Southern Europe attitude that you should have criminalisation-so there has been talk of criminalising patent infringement in Spain. We have not had criminal infringement for patents since the 17th century. The last criminal prosecution for patent infringement was in the middle of the 17th century, and it broke down: the prosecution of a chap called Hugh Middleton for some patent on a particular method of making gold chains.

Q93 Nadhim Zahawi: No relation to the Duchess of Cambridge, I hope.

Sir Robin Jacob: No. [Laughter.]

I do not think we are going to get anything useful by making things criminal. People underestimate just how powerful the civil law is, and there is another reason why civil law is useful. The details of the case will always lie with the owners of the copyright. They are in the best position to find the pirate, and they are in the best position to move, and the civil courts, frankly, move much faster. I spent a lot of time chasing record pirates in the early ’70s, when piracies first started. For some reason that I have never understood, there was a lot of piracy in Victorian times-counterfeiting, trade mark infringement-and then it roughly speaking died away. My dad bought a counterfeit Parker pen in the Forum in Rome when we were on holiday in the early ’50s, but really it did not happen. It started in the late ’60s with some counterfeit pharmaceuticals, and then it moved into the record industry and then it rushed off into perfumes and other things too. But the civil remedy was much the most effective.

Q94 Mr Binley: Sorry, could you just allow me to jump in? I am going to go back again, because it seems to me that Hargreaves wrote the report the Government wanted, and if that is the case were the terms of reference correct in the first place? Is this the way to deal with this particular subject?

Sir Robin Jacob: I have not read his terms of reference, but I think asking anybody to look at the whole of intellectual property itself is a ridiculous thing to be doing, frankly, and asking anybody to report in six months, particularly from a standing start-Professor Hargreaves is not a lawyer-was an impossible task. I think we were going about it the wrong way.

Q95 Mr Binley: Can I read you the sentence? "The Review will develop"-this is the terms of reference-"proposals on how the UK’s intellectual property framework can further promote entrepreneurialism, economic growth and social and commercial innovation."

Sir Robin Jacob: Pretty ambitious, wasn’t it?

Q96 Mr Binley: I just wonder whether you think that was direction beyond the call of what a report of this kind should be about?

Sir Robin Jacob: "The Review will develop" is going too far. Being asked to see if there are ways of doing it was not an unreasonable request.

Mr Binley: Okay.

Sir Robin Jacob: But saying you will do it-there may be nothing that can be done. Not everything can be fixed.

Q97 Margot James: You have given us an idea of some of your views on the Digital Copyright Exchange. We had evidence in one of our earlier sessions about the huge volume of, for example, archive material that the BBC has in its possession. Because some of it is without a clear owner, it is felt that they cannot use it, and that seems to me to deny the public a great galaxy of interesting material. The same goes for the British Museum. Do you think this Digital Copyright Exchange will do anything to help that?

Sir Robin Jacob: I doubt it-and as such almost certainly not. Whoever are the owners the BBC are worried about will not put anything on the Digital Copyright Exchange. Either they are dead or they have forgotten they own the thing.

Q98 Margot James: Could there not be a time limit? Could it not be announced that this thing will go live within 12 months, for example, and if you want to protect your work you need to notify them, and then after that it is a free-for-all? What is wrong with that?

Sir Robin Jacob: Not least that it is contrary to the Berne Convention. You are turning the copyright system into a registration system, which is contrary to the fundamental idea of the Berne Convention-which we have gone along with for ever and with which I agree-that copyright should arise automatically. What I do think, however, is that there are other ways of skinning that particular cat. There are other ways of dealing with it that Hargreaves had not fully considered.

If you think about a putative intellectual property right, it can fall into three boxes. One is it should not exist: people should be allowed to do it; it is in the public domain; that is the end of it. The other extreme is you cannot do it without permission. In between, which I believe ought to be expanded, is the idea you can do it, but you must pay. In the case of orphan works-it is really a variety of orphan work question-maybe you should pay. It may not be very much. The BBC wants to put a lot of stuff on archive. They are rightly worried that someone is going to come along, get an injunction and mess their archive about, and it is potentially possible that that could happen under the current law. I would say we should change the law and that in certain cases, particularly where a copyright owner has effectively abandoned it, like a piece of abandoned land, the Court should have a much greater power to withhold an injunction and not to award damages but to send the matter, if it was necessary, to the Copyright Tribunal for an assessment of an appropriate royalty. I think that is a much more powerful way of dealing with it, and I would not think those royalties, in the normal case, would be very much. I do not think people should be able to abandon copyrights and then resurface 20, 30 years later. Remember we have this ridiculously long period for copyright: 70 years from the year of death of the author. Nearly everything you read-unless you go right back-is in copyright. You do know the ridiculous story of how we got to 70 years?

Q99 Chair: We do not, but I am sure you are going to enlighten us.

Sir Robin Jacob: There are two things. I wrote a piece a few years back for the general public about intellectual property-it was the Grays Inn Reading at the Gresham College. It contained some huge quotations, which you will love, from the debates about the copyright term in the House of Lords, with Lord Macaulay calling copyright a tax on knowledge. That is why I am saying nothing is new.

The copyright term was generally agreed internationally to be 50 years from the year of death of the author, which is pretty long already. It had crept up over the 19th century, and settled at the beginning of the 20th century to about 50 years from year of death. There was a European Court of Justice case where it turned out that Germany had 70 years. If you asked the Germans why, it was something to do with the First World War, and the father had been killed in the war and the idea was to benefit the grandson. Anyway, they had 70. This was thought to be untidy by the European Commission and so everybody went up to 70.

We have just done it all over again with copyright in sound recordings, for the same reason: because it is untidy. It benefited this country hugely financially, as indeed this recent one will have done, because we have proportionately more important copyrights than most other European nations. But a piece of rational legislation it is not and was not.

So, going back to where we are: nearly everything is in copyright, anything that matters.

Q100 Margot James: Can I just bring you back to the Digital Copyright Exchange for a minute? The idea of different legal remedies depending on whether a work is registered: is that a runner?

Sir Robin Jacob: I think it might not be. We do have sufficient discretion in this country to say we do not have to enforce a copyright and we can award damages instead. I have not looked into the fine detail of this, I confess. One thing you would have to look at is whether we could say, "Right, well if you have not registered you cannot have an injunction." That is a pretty big question and it would need to be answered.

Q101 Margot James: But it is a reasonable hypothesis?

Sir Robin Jacob: It is a reasonable hypothesis.

Q102 Margot James: Okay. Do you think there is a problem with the Digital Copyright Exchange creating a two-tier system and penalising people who do not take part unfairly?

Sir Robin Jacob: That is what might be said. We are now moving into very complex areas of law, because you have got to ask yourself how this stands within European Union law, and again you might be bumping up against the French view that this is an extension of personality and you cannot take it away without the permission of the person or their heirs. It needs looking at in detail, which is why the Hargreaves recommendation that we should have a copyright review review-which he accepted from the judges-is one I think we should be getting on with right now.

Q103 Margot James: You mentioned Europe. Professor Hargreaves said the idea was comparable to European financial services in terms of its importance and how that is regulated. Would you agree with that?

Sir Robin Jacob: I do not think I am going to put it in the same box as European financial services. It is a pretty important subject and it is important that Europe gets its act together. I have to say I am not at all happy about the way that European IP law is drafted. It is done by Commission officials, none of whom, as far as I know, have got any IP qualifications. We have bitter experience of the position as regards the Trade Marks Directive and regulation, where we have a massive amount of litigation in trade marks across Europe. It has been a bonanza for the lawyers like you cannot believe. Quite a lot of that litigation is not about whether this mark is too close to that one-you can understand how you could have different views on the facts-but about various legal principles, which are getting more and more abstruse. I am seriously worried about the way that has been going.

Q104 Margot James: So do you think this idea of a digital exchange would alter the legal landscape positively by clarifying ownership rights at an earlier stage?

Sir Robin Jacob: I cannot say that it necessarily would. Quite a number of industries are beginning to develop their own exchanges, as I understand it, just hearing anecdotally, for different types of right. In this all-embracing exchange you will be worrying about performance rights, literary copyrights, music copyrights, sound recording copyrights, film copyrights-remember how they all lay one upon the other. Sometimes a particular thing you want to do will involve all those kind of rights. How it would work out I am not sure. It is a very ambitious idea to do it as a total copyright thing, and whether it can be done more effectively by industry I am not sure. I do not know enough about this.

Margot James: Okay.

Sir Robin Jacob: I can only look at the legalities, and I have not been in contact with clients on dealing with this sort of thing over the years at all.

Q105 Margot James: My last question is just a question of principle: do you think it is realistic for the UK to develop this entity independent from the rest of Europe?

Sir Robin Jacob: No.

Q106 Margot James: Why not? I know you have mentioned the cultural difference and the legal difference between us and France, but could it not at least apply to material originating in the UK for use in the UK?

Sir Robin Jacob: It would be, but I doubt the usefulness to industry of developing something UK-specific. Very few people write music or write books with a simple UK audience in mind.

Q107 Margot James: You do not think the idea could be applied across Europe?

Sir Robin Jacob: I do. I think that is where we should be pushing. A European idea would be a much better idea to create. But I am more interested in the idea of withholding injunctions. I think that would be a much more powerful tool and a much more flexible tool than creating anything too elaborate.

Q108 Nadhim Zahawi: I just want to pick up, Professor, on the legal implications of the copyright exchange, because we hear that the Premier League is very concerned about having such an exchange. The way they would frame this is that they deliver about £750 million worth of revenue to the UK coffers through selling the rights to the Premiership across the world. I would love to get your view on the recent case where the pub landlady was able to challenge-

Sir Robin Jacob: The Greek decoder card?

Q109 Nadhim Zahawi: -that is right, the Greek decoder card-and the implications of that around this idea of an all-encompassing exchange, and who would decide what the value is for a copyright and so on?

Sir Robin Jacob: Well it depends quite on what this exchange is meant to do. If it is merely meant to put owners of copyright in contact with would-be licensees and would-be licensees in contact with copyright owners, which is a more "how do I find somebody I need permission from" operation, then it would not affect the Premier League or anybody else at all. If it is going to start imposing tariffs, then of course it will have a huge impact and I do not think Professor Hargreaves was going so far as to suggest that.

Q110 Nadhim Zahawi: Or imposing that the authority to allow people to use it-

Sir Robin Jacob: I do not think he was even suggesting that this go so far as to require you to license. I do not think he was suggesting that at all, and if the Premier League is worried about that, I think they should not be.

Q111 Nadhim Zahawi: So you think their concerns are misplaced on that.

Sir Robin Jacob: As regards decoder cards, it is quite comic really. There are various possibilities that are going to be the consequence. One is that the Premier League will simply charge Greece the same amount as they charge everywhere else-it is only within the European Union. The alternative: they will not sell them at all in Greece; there is not a big enough demand. I understand on the grapevine that actually the real problem now is Albanian cards, which are coming into this country from outside the EU, and that may be a different matter altogether. Of course, decoder cards themselves are almost, probably, going to be technical history before long. Then you may have to type a code in instead or something like that.

Q112 Nadhim Zahawi: But it is an issue.

Sir Robin Jacob: Oh, yes.

Q113 Nadhim Zahawi: It essentially reduces the value. They cannot sell it at the same price everywhere for economic reasons, so it reduces the value of rights.

Sir Robin Jacob: Yes, it did. It has. If the current position continued it would reduce the value of the Premiership broadcasting rights.

Q114 Nadhim Zahawi: Should Government be doing anything about it or worrying about it?

Sir Robin Jacob: There is not much Government can do about it because it is a question of European law.

Q115 Nadhim Zahawi: Or European government then?

Sir Robin Jacob: The best thing the Government can do is to worry about it, but could the government in Europe be worrying about it? Well, to some extent you are now up against a big historical question of how much should the law force Europe to become a common market, which has been a driver of European Union law since its inception, so as to make us more like America, which has never had a driver to make it a common market, because it is a common market. We have never had a driver to make our own country a common market when we were, relatively speaking, a huge country. We have never had a law saying things should be different in Yorkshire from elsewhere, or that what they have done in Yorkshire is special and it should not be allowed, which is roughly speaking an analogy.

Mr Ward: I agree with that.

Sir Robin Jacob: There was one ridiculous case. My head of chambers used to swear that there was case where there was a patentee for the London Borough of Dagenham, and he said it was the Ford Motor Company. You could, in theory, break a patent up into bits of the UK. You cannot do that any more.

Q116 Rebecca Harris: How do you view Professor Hargreaves’ specific proposals on orphan works, and do you think there are any legal obstacles?

Sir Robin Jacob: I could not quite follow what his specific proposals were. It was all such a level of generality, I confess, I could not figure out exactly what he was proposing. I will tell you what I would propose.

Rebecca Harris: Okay.

Sir Robin Jacob: There are two sorts: there is the problem of the BBC, which you have mentioned-hundreds of orphan works-but let us take a specific one to start off with. There is some picture that has come from the 1950s and you have no idea who took it; you want to print it. You cannot at the moment because it might be in copyright-probably will be. I think the law should be something along the following lines: you make a reasonable search-

Q117 Rebecca Harris: How do you define what a reasonable search is?

Sir Robin Jacob: I will come to that. If you cannot find it, then you can go ahead and print it, and the owner, if ever he or she turns up, can come along and claim a reasonable amount of compensation, which will not be a lot of money. Now then, how do you define a reasonable search? Well, you cannot actually define it. It depends what use the man wants to make of the photograph. If he wants to put it all the way across a national newspaper for some reason or another that is a quite different thing from wanting to put it up for the village fête. You cannot expect those running the village fête to do much at all. Perhaps there should be no search for such a person. On the other hand, if you want to make a lot of money out of it, you have to do a more diligent search, but there will be ways of doing this.

We have had laws for land-what happens when people abandon land. In fact, we have changed the rules slightly now, but if people do not make any use of their land-do not protect it, do not fence it off-and it gets occupied by other people, then you get what used to be called, eventually, squatters’ rights. Now, we have changed the rules slightly, but you can still get them. Now you have to make a claim to squatters’ rights after 10 years of squatting and send it to the owner, and if you hear nothing, roughly speaking, you get it, unless there has been an accident; such as he never got the letter. It is something of the same thing. It has happened with other kinds of property, why not with copyright?

So I think we do need a reasonably good orphan work provision that says something along the lines of, "All right, you didn’t look after it. You can’t expect an injunction now and all you can have is reasonable compensation, and since you have basically abandoned it we are not going to give you a lot."

Q118 Rebecca Harris: What would happen in the occasion when an orphan work suddenly became an international bestseller and made a huge amount of money?

Sir Robin Jacob: I think then you would look at the compensation and say, "Well, he has made a lot of money; this one’s made a lot of money," and you would get more. Legislating for the really odd cases is quite dangerous.

Rebecca Harris: Right.

Sir Robin Jacob: I do not see why the author should not get in those circumstances quite a reasonable amount of money. Any publisher should make a reserve for that. Ex hypothesi they will be making a few bob out of it, so they can make the reserve. But that is a one-off; it does not solve the problem of mass digitisation with no particular known use when it is done, and that one I think has to go to the Copyright Tribunal or somewhere like that. But there is insufficient address in Hargreaves of the work of the Copyright Tribunal and its jurisdiction, of that I am pretty sure.

Q119 Mr Ward: I assume insurance could be taken out in those circumstances?

Sir Robin Jacob: They are always talking about intellectual property insurance-how would the insurance companies fix the rates? I think it is better if there is a six-year limitation period for people to sue. They cannot get damages going back beyond six years, so you put the money in reserve and if nobody turns up after six years you hang on to it.

Q120 Chair: Could I just intervene on one point that you raised just now that intrigues me? In the context of orphan works, you talked about the difference between a photo being in a village fête and a photo being in a national newspaper in terms of potential income generation. How would you deal with it in the context of somebody picking up a photo at a village fête and then getting it into a national newspaper?

Sir Robin Jacob: Well, that would work, you see, because the village fête people would have to pay a few bob. If it is still an orphan work and nobody has complained, so the newspaper picks it up and runs with it, but then the photographer turns up, or possibly the photographer’s heir, and says, "My dad took that," the newspaper will have to pay more, because they have used it more. But it will be determined by the Copyright Tribunal. I very much favour that sort of approach.

Q121 Chair: Is there adequate redress at the moment, do you think?

Sir Robin Jacob: Well, at the moment if a newspaper picked it up and ran with it, they would be taking a chance and they could be sued for infringement or not. I suppose some of them do take a chance.

Q122 Chair: I am sure, yes.

Sir Robin Jacob: I am sure they do. The real worry is that people do not take a chance, curiously. If the BBC decided, "Right, we are going to put our archives online, that’s that. Good afternoon. If anybody sues us we will see what to do about it when they sue us," I expect they would get away with 99.9% of everything straight away, and the other 0.1% would not affect them; they would buy their way out or just take it off. But they cannot really do that. They cannot actually say, "We are going to infringe copyright on a large scale."

Chair: I was going to say; an institution of the status and the symbolism of the BBC deliberately breaking the law obviously has implications in itself, but I do not want to get diverted down that track.

Q123 Rebecca Harris: In some of the written evidence to the Committee-we already discussed whether it was evidence or lobbying-there was a certain amount of lobbying for the idea of stronger law on moral rights to allow clearer identification of authors. What is your view on that and of working practice?

Sir Robin Jacob: Put on one side whether I think it is useful, which I do not really. It is not going to affect the position for the next 100 years as regards all the copyright works we are talking about now, which will be running in copyright for 100 years from now at least, because it is too late for them. As regards the moral right more generally, we call it a moral right but it is not really a moral right at all. It has got nothing to do with morals, but it comes from the French, "droit moral", and there it is seen as the extension of the personality again. But what kind of strengthening has anybody got in mind? I cannot see. At the moment you have the right to be named as the author, which is the one you are really talking about, and that can be waived. Are you really saying it is not waivable, even when you want to waive it? I cannot see it working.

Q124 Rebecca Harris: Thank you. My last question to you, though, is: what is your view about the draft EU directive on orphan works, which might be a more modest proposal?

Sir Robin Jacob: Again, that is probably under some French influence-I think it is too modest. I think it ought to be wider, to start, but it does not really solve the problem. A lot of the EU stuff is not awfully well thought through in intellectual property. So I do not think it is big enough and I would have it much wider. Then, roughly speaking, you would make your reasonable search; if you cannot find it, you can go ahead and do it, and if he ever turns up within six years you pay him. If he ever turns up after that, it is too late-a time limit on that too.

I think it is quite important that anything we do is made simple, or as simple as possible. This subject has got more and more complex over my lifetime. It has got much too complex. When I started there were patents, designs, copyright and trade marks, and you could pretty well get on top of them. Now? Well, just trying to read an EU directive is enough, isn’t it? Have you looked at any of them? The Database Directive I was teaching yesterday-gosh. I have sent two questions off to Europe about it recently, as a judge; I can still sit from time to time and it was just before I left the bench.

Q125 Chair: Just on this issue of complexity-I was going to ask this question later, but since you have raised it-design law has been identified as particularly complex. What do you see as the main problem with the law of designs and how would you address them?

Sir Robin Jacob: Let us give you a bit of history first. We once had a system of registered designs and you were protected for things that had visual eye appeal for 15 years, and it was used but not very greatly. In the late ’60s, early ’70s, people realised that there was a huge gap in the copyright law, in that if you made a drawing of something, or something you were going to make, it was an infringement of the copyright in the drawing to copy the article that would have been made from the drawing. That applied to everything that was made from drawings, and nearly everything is made from drawings. Copying, basically, became illegal in this country and, what is more, the copyright term, except for things that could have been registered as designs, was going to be the copyright term of ordinary copyright-50 years, as it was then, plus life of author. You could not copy anything in this country. Nobody knows what the affect of that law was, except it was jolly good for lawyers. Whether it was good for the country or bad for the country nobody knew.

A big case went up about spare parts, which you had to copy, to the House of Lords, and they finally said, "We are going to allow special exception for spare parts." Whether it was a legally sound piece of reasoning is open to question. It does not matter; they could not bear the idea that you could have copyright in an exhaust pipe for a Marina. Then we changed the law in 1988 to say, "Oh, no, we are not going to have this copyright running like this. We will make a new right that we have invented, the unregistered design right," which is if you design something you get five years from the time you first market it plus another five years when nobody can get an injunction but you can get damages or an assessment of an appropriate royalty, and that is the unregistered design right. We still have elements of copyright floating around. It is not a very well drafted piece of legislation.

The European Union then invented its own design right, both registered and unregistered. The unregistered one is for three years, which means you can put a thing on the market, see how it goes. If it is going reasonably well and you want to protect it, you can register it, under a grace period. So we now have, in this country, four kinds of specific protection of designs: unregistered design right and registered design right, UK and European. They are not all quite the same. On top of that you can sometimes go and try to register designs as trade marks. You can see how there is an overlap there. Every logo has got something about copyright in it too, and sometimes, very oddly, if a particular design has developed a huge reputation, such as the plastic lemon, you can sometimes protect that by the English law of passing off. That is seven rights.

Now, nobody in their right mind would have such a complicated system. But does it matter? That is something I do not know the answer to. How much is it really affecting designers, one way or the other? I do not know the answer to that, and I do not think anybody does. Maybe it does not matter at all that it is frightfully complicated; it just makes it more expensive when you go to see a lawyer. Personally, though, I would get rid of the British design right and the British registered design right, which has not been used a lot. The European one is very cheap, and can be sued upon in this country, so I do not really see the point of the complexity. But the underlying question, which is the really important one, is: is this helping designers or is it not helping designers? I do not know the answer to that. Take a simple thing: one of the great cities of design in Europe is Milan. Historically, the law courts in northern Italy did not work at all for practical purposes but it did not stop the design industry being great. So I do not know some of the answers to some of the questions you ask.

Q126 Chair: Do designers know?

Sir Robin Jacob: No. What you want to know is whether there is a problem-whether they are facing problems in their design work because they are fearful of rights of others because they borrow from other people. Nobody comes up with a totally new design; everything has got shades of the past in it. On the one hand, is it affecting the design process adversely? Secondly, are they facing being copied? Now, there are two sorts of copying: there is counterfeiting, where nearly always there will be some sort of right knocking around that you could use legally, and then there is the much more legally complex sort, when somebody comes close. Where is the line between coming too close and being inspired by? That is a line nobody can ever precisely draw.

Somebody ought to go out and talk to design schools and designers and say, "What commercial problems are you finding?" If they are not finding any or anything significant, and the litigation patterns you are seeing do not suggest there are any, maybe it is not such a big problem except it is frightfully untidy.

Q127 Paul Blomfield: Sir Robin, we have talked a lot about orphan works, but orphan works aside-and I guess your son’s answer, from your earlier remarks, is that it is probably too late-how do you think copyright law should be changed to accommodate the digital environment?

Sir Robin Jacob: That is a very huge question, which I think requires a more specific inquiry than it has been possible for Professor Hargreaves to deal with. One of the questions I said is whether we start looking at the providers, saying, "Well, we cannot shoot the chap who sent it from somewhere else in the world, but we can make the providers check." You may have to register your copyright work through the provider.

I think this is not only a legal question but a technical question as to what, physically, is possible. You can make it a legal question. Sometimes providers say, "We cannot do it," but the answer is they can do it but they cannot do it without it costing them some money. It would be interesting to know how the liability of eBay for counterfeit goods, which the French courts have announced, is working. But I do think this is something that really ought to be looked at not from the point of view of a general study, which is what Hargreaves was, but specific proposals and draft legislation. Doing it too generally is not helping anybody.

Q128 Paul Blomfield: I think you have made that point very powerfully. Were that study to take place, from your enormous experience, what would be top of your list for the areas to be looked at or the potential areas for future action?

Sir Robin Jacob: I think if I were dictating terms of reference I would say: a review of the Copyright Act with particular emphasis on the effect on copyright owners of the internet and what changes in the law specifically should be made. I would expect anybody conducting such an exercise to actually draft the changes. I do not believe this is an exercise that would be useful at too general a level, and bitter experience suggests that unless you draft it, it does not work out too well.

Q129 Paul Blomfield: If you were invited to give evidence to that inquiry, what would be top of your list in terms of the changes to the law that you would suggest?

Sir Robin Jacob: I think before suggesting anything I would like to know much more about the position of internet service providers and what, technically, they could be required to do, because we are talking about what is practical. If you cannot do it, it is no good making the law. So I think that is what I would really want. I would like to know the technology before I did anything else-if it were practical, for example, to say, "You have got a sound recording; you send a copy to the ISPs or to some central source, and they must then borrow from it and check everything they are sending down is not pirated." That itself may be a technically difficult proposition. They may not know whether it is or isn’t, but something along those lines, I suspect, is the only way you can maintain copyright for sound recordings, music, and probably books and everything before long. At the moment books are just about under control, but I do not think it is going to last much longer.

Q130 Paul Blomfield: If we do move down that road, how much room do you think there is-and this question echoes points colleagues have made at different stages of our discussion this morning-for the UK to make progress at a national level?

Sir Robin Jacob: Not all that much. The European copyright position is now terribly complicated. Article 118 of the Lisbon Treaty provides that there can be action at European Union level for the creation of intellectual property rights. I think realistically we have got to work on the European basis. We should spend a lot more time with our colleagues in other countries working out policies that can work and legislation common to all our countries, and not legislation of the kind of the Trade Marks Act, which is so unintelligible that it ends up with nothing but references to the European Court of Justice. There have been about 100 references to the European Court of Justice from national courts since the implementation of this system of trade mark law in 1994-100 cases, let alone the appeals from Alicante. I am an honorary editor of the textbook on trade marks. I have to say I have done no work on it whatever for this latest edition, but the authors tell me it is 60% rewritten since the last edition five years ago. Trade mark law is like standing on quicksand.

Q131 Paul Blomfield: I think you have probably answered my next question. Hargreaves recommends that there should be a wholesale revision of the 1988 copyright Act. Do you agree?

Sir Robin Jacob: Yes. I think what one needs is to put a tough chairman in-I have him in mind; I will not name him now. He should be given a lot of time from his current job and he should be asked to report in a pretty short time. The last great report on copyright nobody took any notice of at all, but it was the Whitford report, commissioned in 1974, reported in 1978, and the Government did nothing about it, possibly due to a change of Government, whatever-partly, I think, because it was left where it was. It did not contain at the end a draft Act or amendments to the existing Act. He should have done. I think four years is too long. This should be doable in something like 18 months.

Q132 Paul Blomfield: Thank you. My last question: you mentioned earlier the issue of future proofing, and Hargreaves suggests and talks about copyright as the right to core expressive use. Is it possible to move in that sort of direction?

Sir Robin Jacob: It is so woolly that I do not know what he is talking about. I am not sure he does either. One of the troubles is this debate is going on at such a general level as opposed to looking specifically: "I want to stop this; I want to stop that; I want to stop the other. I want to allow that." It is no good doing it at that level. So I do not think it is possible to describe. That is of a generality that does not help us-it is a bit wise owlish.

Q133 Mr Binley: Professor, can I ask what your instinctive views are about whether content mining should fall within an exception.

Sir Robin Jacob: Yes, I do have views about that, and I have had some discussions within college about that. It is a matter of huge concern. Plainly, there are patterns that you can discern by going across lots and lots of different data banks and research reports and the like, which you need to copy in order to be data mining. Some of the medics at University College are saying this is actually a huge problem. There are things they want to do: they could treat patients better and they could do medical research better if the law was not getting in the way or was not perceived to be getting in the way. That needs to be looked at very specifically and I think we need to create an exception.

A lot of these copyright works are not inherently valuable copyright works in the sense of copyright works that are going to make a fortune. If you are bringing in hundreds of scientific papers and the data in different bits of them, they will all be copyright or subject to protection under database rights, which is another complicated right the European Union introduced. People are frightened of doing it or do not know whether they can do it, and that is an area that I think should be looked at as a matter of utmost urgency.

Q134 Mr Binley: So you would free that whole area?

Sir Robin Jacob: I would certainly make it possible to do this, and unless you are depriving anybody significant of any money, which I cannot think you are, it should be basically free, yes.

Q135 Mr Binley: Politicians would be affected if it were not, wouldn’t they?

Sir Robin Jacob: Yes.

Q136 Chair: I was going to ask about patent and design but I have pre-empted my questions on design. I would just come in now on patents. What do you think are the defects of the current patent system and how would you deal with them?

Sir Robin Jacob: Right. Well, first of all the current patent system-you need to know a little bit of law-was set up not by the European Union but by the European Patent Convention, the European Patent Union, which has 38 members now, including Switzerland, Turkey, Norway-non-European Union members. There is a basic treaty that sets out the substantive law that every country is meant to have, and has enacted. There is a Patent Office in Munich at which you can get a European Patent, as it is called. In fact, it breaks out into a bunch of national patents once it is granted. There are problems with the procedures in Munich in what is called opposition. This is the first thing I would want to look at.

Once the patent has been granted it can be "opposed"-which means they apply to revoke; it is not "opposed" at all; it has already been granted-within nine months. But the procedures that go on there are not satisfactory. Not everybody in this industry is prepared to say so to the European Patent Office because they are frightened they will be treated badly, but anybody you talk to about it says this is so. It can take years. That is the biggest problem. So that is one thing I would like to see sorted. It is not a matter for the UK Government to do; it cannot. All it can do, having a representative on the administrative council, is urge that this be done.

There are many other suggestions for what is wrong with the patents: patent "thickets" we mentioned earlier.

Q137 Chair: I was going to come on to that. Do you think they are a problem?

Sir Robin Jacob: Well, as I say, they have always been there and they always will be. It is like the poor: they will always be with us. I do not see how it is avoidable. What do you do if you are a patentee? You make a big invention and the next thing you do is to make some improvements, so you patent them. You patent them even if they are arguable obvious improvements-you get as much protection as you can. That is what patentees do. That is the nature of the innovative and patenting process. What Hargreaves does suggest, and I agree with it, is that the fees for renewing patents should go up towards the end of the life of a patent. If you are not making any money out of your patent after 15 years then it is a bit unfair to expect everybody else to go around searching and looking at your patent. Patent compliance is a hugely expensive process. The head of BP said about 10, 15 years ago that BP spent more time on patent compliance than it did on patenting its own inventions-looking at other people’s patents to see whether they could do what they wanted to do.

Is there a lot going wrong in the patent system? No, deep down, not a lot. You get some suggestions that big companies take advantage of little companies. Well, I have never seen that happen, curiously. I know it is asserted all the time: little companies cannot afford to litigate, and so on, but I have never actually seen it. The only experience I had years and years ago when I was a young barrister was when EMI came to see me and said they wanted to make some cassette tapes, and there was this patent-could they make it? So we sat down; we looked at the patent; we looked at the prior art. We thought the patent was a good patent and that the EMI product fell bang within it. The patentee was some unknown individual. EMI did not walk out and say, "We are going to override this chap." They said, "We are going to go and talk to him." I believe that would happen today. Nobody can afford to ignore somebody else’s IP rights. So I think it is rather exaggerated.

I am, of course, concerned about the cost of litigation. Just so you know, the very first textbook on English patent law, called Hindmarch, written in the middle of the 19th century, addresses the problem of the cost of patent litigation. It does not answer it. It has always existed. There are things that can be done and fortunately-it rather overtook Hargreaves- the new judge in the Patents County Court is young and vigorous and has managed to get some new rules. Lord Woolf did not help when he said all courts, big and little, should have the same rules, which does not seem to me to be self-evident at all. If you have a little case between two little guys you say, "Right, this is going to be over in a day. It is going to be slightly rougher justice, but there you are."

Q138 Katy Clark: Yes, what I was going to ask was-and you have touched on it a little bit already, but perhaps you could expand-do you think enough has been done to make litigating intellectual property easier and more cost-effective?

Sir Robin Jacob: By and large probably we cannot change much in this country. We have reduced the time we spend in a court over the years. Big cases are going to cost a lot of money anyway, but it is not too bad when they are two big guys fighting. It is when you have a big guy fighting a little guy that you have the problem. Two little guys can, with a tough judge, run in the Patents County Court, which is what we have got now. He will kick it into order. The problem is little guys often have very misconceived ideas about the extent of their rights. They are more likely to get it wrong than big guys. "Oh, you have pinched my invention. My invention is the most important invention," and they see themselves out of perspective.

As regards the big litigation, I would not want to change much we do in this country. There are big questions that I want to come on to about the potential European Patent Court, but may I put that on one side for the moment-please let us not forget it. But for the little guys I think what is being done in the Patents County Court is pretty good at the moment. There are suggestions that the Patent Office could produce an advisory service analogous to that which they are doing in patents, which has been-not a failure-not a huge success, but you can send your dispute and say, "What do you think, Patent Office?" and it is helping some people to solve some minor cases and at very little expense indeed. The suggestion is in Hargreaves that the office should do the same for small copyright disputes. That would have resource implications for the office because they do have hearing officers to decide patent disputes and trade mark disputes; they do not have hearing officers to decide copyright disputes, because they do not decide copyright disputes. Copyright arises automatically.

Q139 Katy Clark: So what do you think of the Government’s proposals for a small claims track in the Patents County Court?

Sir Robin Jacob: Well, it is a small claims track. That is what the PCC is. Very small claims-£5,000, £10,000-clearly are not worth worrying about from the point of view of the economy of the country. They are almost certainly unimportant.

Katy Clark: They may be important for the individuals, of course.

Sir Robin Jacob: Well, if it is only £10,000, is it? It is going to be more about, "Oh, you have pinched my right. I hate you. You are my brother and you stole it," or whatever it is. I am afraid it is apt to be obsessive or hate litigation.

Q140 Katy Clark: Yes, I suspect many of our constituents will think it is quite important when they come to see us.

Sir Robin Jacob: I dare say they will. They do. There are people who pursue the smallest claims. The courts are all vexed by vexatious litigants. It is a huge problem. There are now more people in the courts who have not got lawyers who are not vexatious-who simply have not got lawyers and are reasonable people. But I am afraid there are some people who are unreasonable too. The Patents County Court under Judge Fysh was quite vexed with some really ludicrous claims.

Q141 Katy Clark: I was going to ask how you thought the Patents County Court could be more effective, but you said that you had proposals in relation to the European aspect.

Sir Robin Jacob: I do not have proposals. That is something I want to talk about, because this is a matter of considerable alarm, as far as I can see. I mentioned that the European Patent, granted in Munich, breaks up into a bunch of national patents. They have to be litigated in the current system in each country separately, which is not very logical. You sue in Germany, you sue in France, you sue in England, if you want to stop it in Germany, France and England. It is untidy. There has been quite a lot of rapprochement between the judges of these different countries; we talk to each other, and the law is getting better aligned between the different countries.

But there is now a proposal to create one unitary patent for the whole European Union, except it now will not include Italy or Spain, because they do not want to join-but for the rest of the European Union-and a common court. Now, this is going to be a supranational court, and the idea at the moment is that it will have different branches in different places. It is pretty important for you to know that British industry is siding up against the current proposal, but that it is being hurried through and might happen by next year. I think it would be very adverse for British industry; I cannot go into all the details now, but you should probably call for some of the stuff that is being said by the collective British industry. It is being said also in some other countries, but there is a sort of feeling that this project has been going on so long it is time it was done.

I think there are huge technical difficulties that have not been worked through, quite apart from the more fundamental thing, which is that the plan as it currently stands is not to have one court in which you sue, and where it is held and what languages are used is decided depending on who the parties are, but to have regional divisions. If you do that, the immediate consequence is the plaintiffs will choose to find a division where they think they are going to win, which is called forum shopping, which is the very thing that people are doing now. So the whole system will not achieve what it is intended to achieve, which is a uniform position all the way across Europe. If you watch what is happening in the United States, the same thing has happened there with all their uniformity, because they have got differences in different places. It is a staggering fact that one-fifth of all US patent actions are started in the Eastern district of Texas, because there is perceived to be a locally biased jury there.

Q142 Chair: You have touched on this, but in terms of business and in the context of small and medium-sized enterprises, do you think the patent attorney and the specialist IP legal professions are aligned with helping UK business to get what it needs?

Sir Robin Jacob: Yes, the British patent attorney profession is probably one of the best, if not the best, in the world. They are well trained and they are better than they were when I was younger, partly because there is a lot more continuing education going on, and their own journal looks a lot better than it did 35 years ago. I think they are pretty good. So the answer is there is very good advice available in this country. The only complaint I have of them is they do not take enough students on and I think they should be bigger. But they do not; they keep themselves about the same size.

Q143 Chair: Do you agree with Hargreaves that there is a role for lower-cost advisers in the field, provided that they are regulated appropriately?

Sir Robin Jacob: Well, I do not know who they are. If they are not solicitors and they are not barristers and they are not patent attorneys, I am not at all clear who they are. He has not any idea.

Q144 Chair: Could not a profession be, shall we say, devised?

Sir Robin Jacob: Well, it is not going to happen, is it? Who is going to regulate them, who is going to run their exams, what are they going to be examined in? It is not going to happen. He is just wishing for something-if only lawyers were cheaper. We can all wish that.

Chair: Yes, I am sure we will all endorse that.

Sir Robin Jacob: That is a wholly impractical piece of Hargreaves.

Q145 Chair: Are there any other areas of law where there are lower- cost advisers?

Sir Robin Jacob: Yes, you find legal executives, but they are normally working in firms of solicitors. Licensed conveyancers-

Q146 Chair: Why can they do it in other areas but not this?

Sir Robin Jacob: This is a hugely technical area. Licensed conveyancing, if you are conveying registered land, is a very limited and very narrow area. People do wills, which is not all that successful, but he has gone further and said there should be business advisers too. It is just not going to happen.

Q147 Chair: Interesting. Right. What do you believe is stopping IP practitioners from competing to provide lower-cost advice to SMEs?

Sir Robin Jacob: Probably there are not enough of them. The only way you bring cost down is to increase the supply. But you have got to realise that, if you are to give patent advice to an SME, patents are expensive business. You only have to read a patent-or try and read a patent, because they are written in some kind of language that no human being normally talks-to realise how difficult it is. Then you see the claim has been granted by the Patent Office, and you have to look at the chap’s device and see whether he can make it or not. It is almost easier for him to apply for the patent than it is to find out whether his patent is safe from other people.

One of the things I wanted to mention is the effect on costs of the new system-comparatively new system-of lawyers being able to act on a no-win, no-fee basis. We had a case in the Court of Appeal about three years back about a bolt. It was a simple patent case, all over in a day. Quite a good invention, I thought, and the patentee was an SME. He financed it on a no-win, no-fee basis. That would not have happened before, so although I rather have reservations about this, this was a real case of that system working. He did not have to pay his own lawyers unless he won, and under the system then, they could get double fees, or up to double fees, from the other side. There have been schemes over the years for insurance; you insure your patent against being infringed but I do not think it has been hugely successful. I do not know how it is working now. The idea is you get counsel’s opinion that this is a good case and then the insurance company will pay.

Q148 Chair: Yes. I am tempted to ask how the new proposals on no-win, no-fee would affect that, but perhaps that is an area we do not want to go down.

Sir Robin Jacob: I agree; I do not think we can go down it here. It is beyond your remit, anyway.

Q149 Chair: Yes. Just a last supplementary from me: is it realistic to expect competing IP practitioners to provide buddying services, particularly if there is a shortage of them, as Professor Hargreaves suggests?

Sir Robin Jacob: Buddying services?

Chair: Yes, mentoring.

Sir Robin Jacob: No.

Q150 Chair: You do not think it is realistic.

Sir Robin Jacob: No. What the patent attorneys do from time to time, and have done this year, is a World Intellectual Property Day.

Chair: The nation is enthused, yes.

Sir Robin Jacob: Walk in: half an hour’s free advice. It is a way of drumming up clients, I suppose, but it would have been useful to some people I imagine.

Q151 Chair: Yes, I can see. Well, may I thank you? That concludes our questions. Is there anything that you would wish to say to us that our questions have not covered and you think perhaps they should have covered? I may add that you can always submit further written comments.

Sir Robin Jacob: I tell you what, I will send you for your own amusement the Gresham College lecture with quotations from Lord Macaulay in it, which gives you a feeling of the IP system at work. I think you have not mentioned collecting societies at all.

Q152 Chair: Collecting societies. Yes, I am very vague as to what they are.

Sir Robin Jacob: Well, there are certain societies, basically only in the field of copyright, to which rights owners assign all their rights or the right of administering their rights. For example, the right of public performance of music belongs to the PRS, and they go round making sure that hairdressers who are playing the radio pay a fee. There are different collecting societies collecting different rights: one is the PRS; one is the MCPS-they want a fee for the music, as opposed to the copyright on the sound recording. There are different societies across Europe charging different rates for different things, and it is all very complicated. I do not think people know too much about them. Sometimes the competition authorities look at them, and I would have thought that a little review of the function Europe-wide of the collecting societies is well worth while. I have seen them in action; I sat as the Copyright Tribunal before I was a judge and there were huge differences between what was going on in France and what was going on here, which do not make much sense in a modern European Union. I am not suggesting that you do anything more than flag it up as something that ought to be looked at, from both the competition point of view and the copyright point of view.

Q153 Chair: Right. Can I thank you very much? As I say, if there is anything further that you would like to send us, we would be very grateful. It really has been very helpful and can I thank you for illuminating what is potentially a very dry subject with the sort of anecdotal evidence that you have provided?

Sir Robin Jacob: Once you have got into it, you find it comes alive.

Q154 Chair: Yes. I think you have helped to convey that this morning. May I thank you very much?

Sir Robin Jacob: Thank you very much.

Prepared 26th June 2012