The IPO Enquiry

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Sketches from the three hearings held by the All Party Parliamentary Group on Intellectual Property’s enquiry into the IPO in April and May 2012

Hearing No.1: 25th April 2012

A Westminster investigation into the machinations of the UK’s copyright bureaucracy and the government’s intellectual property policy opened very gently this week.

The All Parliamentary Group on Intellectual Property is headed by heavyweight backbench MP John Whittingdale, and while members are pro-IP, they have plenty of beefs about how the handling of it could be improved.

Whittingdale recently revealed that he shared the concerns of protesters who stood against ACTA, the worldwide treaty to enforce IP rights. The group’s first evidence session invited copyfighters to make their case, and along came the Open Rights Group, quango Consumer Focus (a latecomer to the copyfight), the British Library and Google.

Google’s Theo Bertram, a former special advisor for Brown and Blair, wasted no time in playing the search giant’s trump card: don’t break the internet! Copyright enforcement proposals, he said, “no matter how well intentioned, could be damaging to the fundamental fabric of the internet”.

For those of you who haven’t seen it, there’s a new website documenting this proposition. The fabric metaphor, we note, is a favourite at the Chocolate Factory. Cynics suggest that many, if not all, attempts to enforce property rights and ownership that will “break the internet” are simple measures that Google just doesn’t want to implement. But it’s proved incredibly effective so far in scaring lawmakers.

Bertram sketched a kinder, gentler Google.

Originally published at The Register

“Google was seen as a defender of piracy and a propagator of piracy – I don’t think we’re seen as that now,” he added. Bertram also made the case that more “certainty and flexibility” was needed for internet startups, and changing the law would help.

“Surely any organisation needs to establish whether what it’s doing is legal,” mused Whittingdale, who pointed out there were 70 licensed music services in the UK.

Bertram replied that most of the digital media startups were American. That’s a proposition that Omnifone, We7, Spotify, Rara, Playlouder, 7Digital and Soundcloud might counter: all but one are British and the other is from Sweden.

Asked if he was happy with the Intellectual Property Office (IPO), whose behaviour had sparked the group’s intrigue, Peter Bradshaw of the Open Rights Group said that he was – especially in contrast to the Department of Media, Culture and Sport (DCMS). “On the process side whatever we think of the evidence, the process the IPO has followed is better than the one the DCMS has followed,” he said. What Bradshaw may mean is that the IPO welcomes groups like the ORG, but the Ministry of Fun doesn’t invite them to parties any more.

Ben White, of the British Library, raised a few eyebrows among the MPs by saying the IPO was the best in the world, and he offered an interesting reason.

“We’re really impressed with IPO, and the professionalism they display,” gushed White. “There are no economists in Germany or Scandinavia. If you compare them internationally, they are exemplary.”

The MPs countered by asking White if some of the financial numbers emitted by the world-class “economists” at the IPO in support of Prof Ian Hargreaves’ “Google Review” were justified. These figures were met with much ridicule when they were published, and the IPO backtracked pretty quickly. Now we know something about their hasty genesis: they had been been created for the IPO by Ben Mitra-Khan, a former Soros scholar and now supporter of the curious Left-ish “Post-Autistic Economic Movement” (since renamed “Real World Economics”). Mitra-Khan is really an economic historian, and may actually be a brilliant one, rather than your common-or-garden economist who crunches numbers.

White, perhaps, could have chosen a more convincing example of a world-class authority than the United Kingdom’s IPO.

However the hour-long hearing was dominated by one witness.

 

A Very Long History of Everything

The Teutonic contribution of Saskia Walzel, of doomed quango Consumer Focus, took up more than two thirds of the evidence MPs heard. Walzel has a Master of Arts degree in Human Rights, and several campaigning jobs hectoring companies on corporate social responsibility.

saskia-walzel_150 She turned one-point answers into paragraphs, and longer answers into sprawling historical and geographical dissertations. On and on and on she went.

It was like ‘Hegel, the audiobook’.

Her fellow witnesses seemed to be content to let Walzel ramble, perhaps fearing a skewering from the MPs. The group’s members had reminded all those present that they weren’t under oath and stressed the hearing was not confrontational; they genuinely wanted to hear what they thought was wrong with intellectual property.

Perhaps Walzel went to one of those schools where the quantity of knowledge that you can exhibit, weighed by the metric ton, is what is valued. Before MPs, however, this just seemed patronising and rude. In Walzel’s desire to tell the history of everything, everywhere, any coherency was lost, and MPs intervened several times to steer Walzel’s earnest stream of verbiage towards relevance.

This earnestness might have been counter-productive.

“Who are you, a quango, to formulate your policy on that? Who decides? You do it on behalf of the ‘consumer’ – who ever that may be. Why do you do it, frankly?” asked Whittingdale. Walzel offered a rambling answer after which Whittingdale muttered, “that doesn’t answer my question”.

Whittingdale also delivered a sly joke. He asked if her view could be summed up as “Hargreaves good, Digital Economy Act bad?” Walzel said the IPO was simply doing as it was told.

“They were following orders?” he asked.

“Yah,” said Walzel.

Originally published at The Register

Hearing No.2: 9th May 2012

There’s an elephant in the room as Parliament’s informal inquiry into intellectual property policy rolls on. In the foreground, there’s the role of the officials who are supposed to support it. In the background, there’s something more troubling.

Within the past two years – and without a hint, let alone a fanfare – the UK’s economic strategy has radically changed. It favours fashionable new sectors while downgrading successful UK sectors such as design, music and TV, which are based on “intangible” rights.

This is not merely a shift in industrial policy; it would appear to be a clear case of government intervening to “pick winners”. However, the “winners” here are mayfly internet startups that even the No 10-appointed ambassador to London’s Tech City admits won’t really create wealth. “Picking losers” might be a more accurate term.

It’s a curious silent shift to make because the long-term economic fortunes of the UK – and advanced Western economies – are increasingly reliant on these intangibles for growth.

These intangibles, unlike the products of the tangible industries of textile and hardware, cannot be made more cheaply in the emerging economies. Design, copyright, patents, brands and trademarks need to be protected and exploited to the utmost, and we’ll need a lot more of them. MPs may be confronted with more pressing issues such as the eurozone collapse, but surely none looms larger in the long term than the question of: “What will the British economy do?”

There are two conventional views on where this new stealth economic strategy has come from, and each is as troubling as the other.

In one view, rogue civil servants are operating an independent policy beyond oversight or ministerial control. On the other hand, it is official Coalition policy but one that Number 10 cannot explain or even acknowledge publicly: it’s the policy that dare not speak its name.

Either way, the view strongly lobbied for by overseas internet multinationals is that for the internet “to win” British rights must be weakened. This emerged in the second evidence session held by MPs in the cross-party group on intellectual property in its current probing.

 

Intellectual property: Who needs it?

The first session called on Google and digital rights campaigners to explain their case for weakening the current intangible rights framework by removing protections.

The second session heard many cries of incomprehension in response to these changes, and complaints about the conduct of the UK Intellectual Property Office (IPO) and the process of the Hargreaves Review, which looked into the effects of intellectual property (IP) law on Britain’s future.

But as for the strategy change, whodunnit? Careful questioning didn’t unearth a smoking pistol. But there was no shortage of smoke.

Publishers Association chief Richard Mollet summed up the philosophical shift that has taken place. Instead of treating copyright as the foundation for market-driven growth, copyright was now viewed through a pirate’s eye patch: as just another burdensome piece of red tape.

“I feel there’s a chasm, a conceptual chasm, between the view of IP as a property right, which is recognised as such by UK, European and global law – it’s yours, you own it, you can trade off it – versus the other conception of copyright as a regulation, something that trips consumers up, and therefore the less of it there is the better,” said Mollet. “That’s a gap I don’t think can be bridged, and that view permeates through some IPO thinking.”

Hargreaves explicitly endorsed this view of copyright as a burdensome regulation, and it’s implicitly now government policy. En route to Hargreaves’ report becoming official government policy, nobody had thought to disagree.

This rubber-stamping was raised by several witnesses in contrast to the approach of Richard Hooper, who had been appointed to implement the Hargreaves Report’s “Big Idea” – a digital copyright exchange. While Hargreaves had dutifully carried out his homework, witnesses said, Hooper had questioned his task. This suggested the IPO, which wrote much of Hargreaves’ report, was carrying out a political assignment.

But reality wasn’t so simple. It may be, one witness suggested, a case of bureaucrats not understanding the industries.

Dids Macdonald, of the Anti-Counterfeiting in Design (ACID) group, had spotted more magical thinking. She told the panel of MPs that officials still thought “design happens by chance”, and isn’t really a skill worth protecting. Officials’ obsession with changing copyright appears to downgrade design, she implied.

We also heard evidence of bureaucrats taking an activist role, possibly misleading their ministers.

“Some evidence was not fed through to ministers,” said Andrew Yeates of the Educational Recording Agency.

And the consultation also heard that IPO bureaucrats had been attempting to change international policy before proposals had been discussed, let alone decided, in the UK. This state-within-a-state had its own very active Foreign Office, it seems.

“For the exception for data-mining, BiS [the Department for Business, Innovation and Skills] has been trying to ‘build up a head of steam’ without any evidence for the policy,” said one witness. “The policy is being lobbied in Europe but nobody in the UK has asked whether it’s good for the UK economy.”

Mollet also said he’d been in meetings where officials had told him “copyright won’t exist in 20 years”. This is a giddy claim since copyright has survived the invention of electricity and moved beyond copies almost 200 years ago. But it is the kind of thing we can imagine penpushers cheering. It would be interesting to hear which public servant had made this assertion.

We also heard how the IPO was “helping” write policy, such as the Hargreaves Review, and then reviewing it. One witness described this as the IPO “marking their own homework”. There’s another term, coined by blogger Frank Fisher, which is even more apt here: “carousel propaganda”.

Yeates also noted that officials had downgraded the contribution of creative industries from 8 per cent of GDP to 3 per cent overnight, much to everyone’s surprise.

So there’s plenty of evidence of a policy shift – and evidence of prejudices and bureaucratic activism. But not, so far, of where all this originates.

Witnesses wanted a stronger representation for intangibles in Cabinet, and were understandably frustrated that declining sectors were strongly represented in Whitehall (manufacturing) but growing sectors (intellectual property) were not.

MP Jim Dowd warned the witnesses of getting what they wish for.

“People name a department after a problem,” he observed wryly, “and think they’ve solved the problem.”

Who is pulling the levers behind the IPO?

Some of the most interesting contributions came from the floor.

One was an insight into how policy-making within the IPO was driven. Hubert Best, a lawyer and expert on Nordic extended collective licensing, said he’d been invited to explain it to the IPO, who clearly wanted to implement it in the UK. He had patiently explained that collective licensing – the act of putting an organisation in charge of collecting royalties on behalf of artists – as the IPO wanted it could not work within the Berne Convention for the Protection of Literary and Artistic Works.

“Now somebody has told those very nice people at the IPO that ‘This is the answer that has to be provided’. I was left asking myself – I wonder where that decision comes from?” he wondered out loud.

Ian Moss, formerly of the Growth Unit at the Treasury, put in an economic perspective that’s worth quoting at length because it provides so much of the wider context that is usually absent.

“At times they are mixing up what is good fiscally and what is good economically,” said Moss. “If you are looking at public spending you want to pay as little as possible for all the things you buy, and the easiest thing to do is make things free.”

The new stealth policy, he explained, applied that logic to the technology sector by making its inputs free.

“Unfortunately for the whole of the economy that isn’t a good thing – because for the things we value, there aren’t enough of them made.”

It’s a worthwhile point. If the new strategy wasn’t so stealthy, we’d be having a public debate about whether the economy as a whole should take a hit just so that one stroppy corner of the technology sector should get a leg-up.

And remember that much of the technology sector, including the likes of Apple and Microsoft, respects rights and works with rights-holders. Apple created new content markets where internet “experts” had said it would never succeed.

Moss had another observation about The Great Leap Forward. The IP debate advanced by radicals and reformers didn’t focus on economic incentives, but was about accessing stuff that had already been made. It looked at stocks, not flows.

“[It] is one thing asking ‘How do we ensure optimal access to the stock of content?’, [it is another to ask] ‘How do we ensure an optimal flow of new content?’. So far all the discussion is about the stock, and none from the IPO in policy areas is about the flow.

“Which means us utilising the rights we own now in new technology areas in the future: the cloud, for example.

“In most circumstances, we can look at past performance as a good indicator of future performance. If we’ve been pretty good at creating in the past, then that’s probably the thing we should stick with in the future.”

The inquiry continues today at 3pm BST, with the Intellectual Property Office’s head John Alty as sole witness. It won’t be the last session, we understand.

Originally published at The Register

Hearing No.3: 21st May 2012

 

The all-party group of MPs looking into the UK’s looming obliteration of copyright rounded on their quarry yesterday – and it turned out to be an enthralling battle of wits.

John Alty and Edmund Quilty of the Intellectual Property Office (IPO) were quizzed on their controversial role in maintaining – or failing to maintain – protections for creative work after being invited to the informal inquiry’s third evidence-gathering session in Westminster.

For over an hour the two senior civil servants showed striking indifference to Blighty’s creative industries, whose existence relies on copyright law and enforcement. The pair couldn’t even muster a word of lukewarm praise nor comment on said industries’ economic value to UK plc.

There is one area in which Britain is indisputably world class: armed with a mother tongue that has a vast vocabulary, our mandarins have the ability to create more ways of not answering a question than anyone else. They’ve perfected it, in the way the Brazilians and Dutch turned football into art. Step overs, dribbles, perplexing diagonal passes into space – the lot. And the IPO officials put all those skills to work yesterday in an exhibition performance.

But the six MPs raising questions, spearheaded by John Whittingdale (Con), Pete Wishart (SNP) and Don Foster (LibDem) were wise to this – and, unlike too many parliamentarians your humble Reg hack has witnessed, they were highly effective.

They wanted answers, and working like tag-team wrestlers they struggled to pin the slippery bureaucrats down. Most points were asked several times, doggedly, in different ways. Ultimately, however, it may be what the witnesses left unsaid that made the greatest impression.

Probing questions: a pain in the neck? quilty

The point of focus was Alty, chief of the IPO. He’d brought along Quilty, the IPO’s copyright boss, whose actions had sparked this gentle probe by MPs. Quilty was sat at Alty’s left, looking like a pink Sontaran battle commander.

Now, if you know your Doctor Who, you will know that the Sontarans are a fierce and cunning race of warriors, who are capable of hypnotising humans. But they have one weak spot: a “probic vent” at the back of the neck. Even a blow from a shoe on this hole can incapacitate a Sontaran. Sat directly behind Quilty, in the audience, was Ministry of Fun official Adrian Brazier.

Brazier is the digital rights lobbyists’ second-favourite civil servant after Quilty, and he has led his department’s ‘’implementation’ of the Digital Economy Act. Which, if you look closely, hasn’t been implemented. Both are very sniffy about rightsholders actually enforcing their rights. So maybe Brazier’s positioning was no coincidence. It was defensive cover.

The IPO has a peculiar position. It has one function, which is merely administrative, of registering trademarks and patents. But it also has an advisory role giving ministers policy advice. Alty said it was also “influencing the global rights-granting agenda”.

It’s this policy creation that’s united the creative sectors – a rare achievement – against the IPO and prompted much concern. Wasn’t this dual role odd, asked Whittingdale? No, said Alty, the insolvency agency did much the same.

Do you see copyright as impeding innovation and growth, asked Whittingdale.

“Clearly you need a copyright system. I don’t think anyone in the mainstream is really challenging that,” said Alty. You could feel the “but…” approaching. “The question is where you draw the boundaries, what’s the economic impact on difference arrangements, and that’s the thing on which people differ, and we gather the evidence and draw a view.”

One MP pointed out that Alty’s mission statement for the IPO didn’t include the protection or support of intellectual property (IP) industries, and in fact made it impossible to support them. Alty repeated the mission statement but at greater length. Copyright is evolving, Quilty chipped in.

Then we got down the nitty gritty: to what extent were bureaucrats not just suggesting policy but creating it, the panel wanted to know. Who makes the recommendations, asked MP Mike Weatherley.

“It’s no different to any other part of Whitehall,” said Alty. “You wouldn’t expect a minister necessarily in a very technical area to suggest ‘these are things I want you to consider’. You have to take responsibility.”

Whittingdale pointed out that options for overhauling copyright – put forward by the (supposedly) independent Hargreaves Review – were radical and bound to cause controversy when aired by the IPO in a consultation.

“There had to be a rigorous examination of what options were available, what they cost… and that’s one of things that has evolved in recent years in a way that wasn’t before,” Quilty replied. “You’ll see impact assessments that support consultations, and which do look at all the options. People have to recognise that’s going to be part of policy making.”

Well, there’s blue-sky thinking, Estelle Morris MP countered, and then there’s sensible policy. Under Quilty, the IPO had given a platform for fringe extremists, and this fed into policy. “You don’t just put all the options out there, surely?”, Morris asked.

Don Foster tried to pin down the IPO as the source of the controversial education exception proposal in which school textbook authors are effective denied royalties: “Just for the record – you would not recommend that option?” he asked.

“I think the ministers also said…” Alty began to reply.

What about you? Do you recommend that particularly?

“Um. I think that, er… I’m in a slightly awkward position because we have to give advice to ministers, and not to all-party groups,” said Alty. “We’ve given a pretty clear signal that’s not the way we intend to go.”

(There are times when public servants appear to be extremely uncomfortable with the concept of accountability – and this was perhaps one of them.)

Reforming the IPO: ‘There is no right way of doing this’

If you were building a new IPO, asked Foster, is there anything you do that isn’t appropriate and any functions you’d like to take on?

 

Alty started another mazy dribble that showed off his technical skills, mentioning things like “build up capability in individual areas”, “there is no right way of doing this”, “I’ve worked in one role”, “I’ve worked in a different role”, and so on, running the ball over the line by the corner flag as the clock ticked down.

MPs questioned whether the IPO’s current home at the Department for Business, Innovation and Skills is the right one – the office used to be in the Ministry of Fun. Where should it be, Whittingdale asked, while wondering that the IPO’s current home may “rather skew you to look for policies that pursue innovation perhaps by diluting rights ownership?”

“The creative industries are also about innovation… there’s no magic answer,” said Alty.

On the subject of appointing an IP czar, the IPO didn’t like the suggestion of creating a secretary of state for the digital economy.

“I don’t think you could have a minister responsible for all those things,” said Alty as Quilty nodded vigorously. “You could say having two ministers is better than one.”

“[The Department of Culture, Media and Sport] is there to support the creative industries, they have that voice, so do we,” added Quilty.

How closely was Google involved in the process, wondered Wishart.

“I don’t know any more than you do. I’ve met lots of stakeholders and I don’t think one has an undue influence,” Alty replied. Quilty chipped in: copyright policy was all about fairness, and he strived to position it as a wise and dispassionate bystander.

“In the copyright area, you’re often talking about a cake which has to be divided up between people,” said Quilty. “And the questions are just how big is the cake, who gets the biggest slice of it: do creators get a bigger slice, do consumers get a bigger slice?”

For a “copyright and IP enforcement director” that’s a fairly hug-a-hoodie-grade idea.

 

Dodgy dossiers

Finally MPs touched on the empirical evidence for copyright reform and the positive effects it will have on the UK economy and finances – specifically, figures and numbers published in the Hargreaves Review that were backed by the IPO in its subsequent consultation. To put it charitably, much of this evidence turned out to be bizarre and implausible. Whittingdale’s view was that Prof Ian Hargreaves had made “sweeping assumptions – and you [the IPO] didn’t cast a critical eye over them”.

“Hargreaves was signalling a sense of direction and there’s much more detailed work to do,” said Alty, distancing himself a bit further from them. Foster was more specific: the evidence lacked “authenticity and validity” to support Hargreaves’ eyebrow-raising ideas, such as a digital marketplace that would be worth £2.2bn to the UK economy every year.

Alty said “there was a balancing act to be struck and we were not going to do the Hargreaves Review again. One of the things we’ve built up is our economic capability to do that sort of analysis”. Maybe Hargreaves was in a hurry, suggested Alty: “He did his job in six months and most reviews take longer.”

Hang on, asked Jim Dowd MP, the Gowers Review into intellectual property had only just been completed. (It was actually finished in 2006.) All the evidence was still sitting there, wasn’t it?

“Well that’s helpful too, then,” said Alty. “There’s an implicit assumption that somehow we nobbled Hargreaves to do the report.”

“Perhaps if you’d seen the disparity between Hargreaves’ evidence and his conclusion,” replied Foster, “then you might have pointed it out. That’s all.”

Why did you allow such nonsensical assumptions to just sit there, wondered Wishart.

“The truth is the evidence base for copyright is not that great,” replied Alty.

“These [figures] were delivered as if they were coming down from the mountain,” one of the panel said. “Nobody believes these economic assessments. Hargreaves said 0.5pc of GDP benefit would result – do you still believe that? They’re just so ridiculous, so nonsensical do you worry about being foolish?”

Alty remained unapologetic: “To get a debate going was a reasonable way of going about it. Of course you can argue about numbers. We’re breaking new ground.”

“It does start a debate,” echoed Quilty. “That’s how academic debate goes on.” The MPs were massively unimpressed.

“People aren’t interested in ‘a debate’ – but the outcomes,” replied Dowd, sharply. “What some people believe at the moment is that the government, through its various agencies, has a view of intellectual property in terms of value to consumers which in the short-term may look very attractive, but in the long-term, may undermine the whole principle of creative industries that produce products of benefit to consumers, and others.”

Alty said EU law forbids any copyright exceptions from damaging commercial interests – just in time for the final whistle to mark the end of the group’s time slot.

The IPO officials had held their line as doggedly as the MPs had questioned them. The pair insisted that the IPO must balance consumers’ interests with copyright holders; that any unpopular proposals weren’t really theirs and must have come from the independent review; and that they were starting a great big debate on copyright.

What they hadn’t done is show any indication that IP is important to the UK, rather than something unpleasant you step in, let alone how it’s important.

(The UK isn’t the only country to find anti-copyright activism embedded in its civil service, creating policy for ministers – but that’s for another day.)

The minister responsible for the officials, Baroness Wilcox, has yet to agree to appear. In an earlier appearance before Parliament in November, Quilty and Alty did most of the talking for her. Further snubbing the cross-party MPs would leave the impression that the bureaucrats were really in charge …

 

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