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British biz roasts Hargreaves' 'Google Review'

CBI weighs in on counterfeiting, IP theft, and freetards

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The Google Review – or to give its official title, The Intellectual Property Office's Independent Review of IP and Growth – has come under a sustained fire. It is the last day of submissions before Hargreaves and his team of five experts go away and ponder. The initiative was created as part of Cameron's "Shoreditch Roundabout" speech in November, where he described the gap-year Nathan Barleys who do "something in social media" as the future of the British economy.

Against this, the CBI's submission, "Exploiting Ideas", is a reality-check. The Confederation of British Industry (CBI) describes intellectual property as Britain's "Crown jewels", and notes that investment in "intangibles" now exceeds investment in physical assets by about 50 per cent. Aerospace and pharmaceuticals turn over £37bn between them, copyright accounts for 8.2 per cent of GDP (or £100bn) and trademarks – typically forgotten – £18bn.

"Today's success stories are increasingly likely to be globally commissioned animation companies or chart-topping music artists," notes the report. It's also quite diverse; large chunks of the IT industry depend on IP businesses directly. It also cites the Premier League as an exemplar of commercialising IP.

Threats to the UK come largely from foreign companies, counterfeiting, and from digital piracy.

"If left unprotected, a good invention or creation may be lost to larger competitors, often overseas, who can commercialise the product or service at a more competitive price and crucially, at a quicker pace, leaving the original creator unrewarded," note the CBI.

Skills and tax reform are vital, it notes, but for legislation, it is a case of enforcing what we have, rather than passing new IP laws.

The submission authors note that the power balance has tipped away from the creative individual. Trading standards don't pursue counterfeiting cases, leaving it to the individual rights holder to seek redress. But this is expensive and time consuming (as a film-maker illustrates here).

Suggested solutions are an alternative dispute resolution process to lower litigation costs, and giving small businesses the option to file fast-track cases through the small claims court. The role of the Patents County Court, which most people don't know exists, should be expanded to cover all IP, and the Court should be able to assess damages. Trading standards should be expanded, and better trained, too.

The CBI notes that the creative sector is set to grow at twice the rate of the economy, but piracy still hinders the creation of markets. The CBI highlights substantial amounts in bootleg e-books and movie and TV streaming. The UK has more music services than any other country in the world, but the paying market has to compete with consequence-free piracy, which discourages investors – so the entire sector is under threat.

Although the CBI says no new laws are necessary, the current ones "should be properly enforced to ensure a fair and properly-functioning marketplace in which digital entertainment can thrive rather than merely survive".

Cue howls of protests from the "give us stuff for free lobby" – but the debate has moved on. There is nothing like a recession to focus attention on growth and jobs, and IP is a much bigger part of the economy than music industry-bashers like to acknowledge.

The question Hargreaves has carefully avoided so far is whether the Shoreditch's media2.0 websluts can in the future match the wealth created by British IP businesses. Stop laughing – Cameron seems to think they can. Google have told him so. ®

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