The Real Legacy of the Hargreaves Report?

Now that the dust has settled a little on the Hargreaves report, I thought it might be worth revisiting it, but looking at it from a slightly different angle. Before, I noted its sensible thoughts on software patents; there's also much good...

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Now that the dust has settled a little on the Hargreaves report, I thought it might be worth revisiting it, but looking at it from a slightly different angle. Before, I noted its sensible thoughts on software patents; there's also much good stuff on orphan works, one of the areas crying out for a way to unlock the riches currently unavailable. But I want to step back and look at the bigger picture, and how in addition to offering their specific recommendations, Professor Hargreaves and his team have done something rather clever.

This is to lay down certain general principles that are true about this whole area of intellectual monopolies, and that we can refer to in the future as statements in an official report from a respected figure. They come down to three main points.

The first seems absolutely obvious, but is in fact quite revolutionary in its way: that the Government should base its decisions in this area on objective evidence. This is hammered home several times:

We urge Government to ensure that in future, policy on Intellectual Property issues is constructed on the basis of evidence, rather than weight of lobbying, and to ensure that the institutions upon which we depend to deliver intellectual property policy have clear mandates and adaptive capability. Without that, the pile of IP reviews on the Government's doorstep – four in the last six years – will continue to accumulate.

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We simply invite Government to consider that as copyright becomes increasingly economically important, it is vital that economic considerations are fully weighed in the balance. This is especially so given the role, noted in the previous chapter, that copyright is acquiring of regulating the permissibility of technologies, such as consumer recording devices and web search engines. If the current imbalance in the debate on copyright is allowed to continue, the economic price will be high.

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Government should ensure that development of the IP System is driven as far as possible by objective evidence. Policy should balance measurable economic objectives against social goals and potential benefits for rights holders against impacts on consumers and other interests. These concerns will be of particular importance in assessing future claims to extend rights or in determining desirable limits to rights.

The Hargreaves report also emphasises the lack of unbiased data concerning unauthorised use of copyright materials:

The uncertain and disputed nature of the prevalence data makes it difficult to reach confident conclusions about the impact of copyright piracy on growth. This assessment is complicated further by a number of other relevant points:

not all illegal downloads are lost sales – the user may not have paid a higher price for a legal copy absent cheap or free illegal versions; money not spent on legal copies is not lost to the economy – it may be spent on other purchases. This is of no comfort to the sector suffering losses, but the effects across the economy will not necessarily be problematic; even within the industry affected, purchases prompted by experience from an illegal copy (for example, concert tickets or other merchandise) can offset losses; in business software, piracy has promoted the lock-in effect for the legal provider's software and helped to make that software the global standard.

The Review team has examined numerous studies, including those in the table above, and a supporting paper looks at the methodological strengths and weaknesses of this work. With the exception of the Industry Canada study, we have either not been able to examine the methodology of the studies or, where we have, we have discovered problems with the methodology. Consequently, we have not found either a figure for the prevalence and impact of piracy worldwide or for the UK in which we can place our confidence.

That is, the methodology of studies in this area simply doesn't stand up to scrutiny (as I pointed out with regard to the BSA study recently.) That's not just about a few cases, but every single one with the possible exception of the Canadian study. That's a stunningly complete slapdown of the work of the various outfits that put those studies together.

Moreover, the Hargreaves report also confirms what I noted last year: that "money not spent on legal copies is not lost to the economy – it may be spent on other purchases". This again goes against everything that the copyright industries have been saying for years.

Taken together, these hugely important statements undermine just about every piece of purported evidence offered by the content industries – and with it any credibility for their claims. If we lived in a sane and reasonable world that would at least mean that next time the copyright companies would have to present some properly conducted research, with a publicly-available methodology (hey, I can dream, can't I?)

Finally, the report devotes quite some space to emphasising the pernicious effects of "lobbynomics" in this sector:

Lobbying is a feature of all political systems and as a way of informing and organising debate it brings many benefits. In the case of IP policy and specifically copyright policy, however, there is no doubt that the persuasive powers of celebrities and important UK creative companies have distorted policy outcomes. Further distortion arises from the fact (not unique to this sector) that there is a striking asymmetry of interest between rights holders, for whom IP issues are of paramount importance, and consumers for whom they have been of passing interest only until the emergence of the internet as a focus for competing technological, economic, business and cultural concerns.

The passage of the Digital Economy Act 2010 exemplifies the environment in which copyright policy is made. Very significant parts of the Digital Economy Bill, which was introduced to Parliament towards the end of the previous Government's term, were lost or amended during its passage into law. This was partly a matter of unfortunate timing: a Government facing an imminent general election is ill placed to withstand pressures to amend legislation to get it through. The fact that the DEA's legality was subsequently contested in court by two large UK companies, BT and TalkTalk, indicates the absence of business consensus. Lord Puttnam, a major figure in the UK creative industries, commented at the time: "We have been subjected to an extraordinary degree of lobbying... The lobbying process that has gone into this Bill has been quite destructive and has done none of us very much help at all".

A prominent and persistent example of the lobbying problem concerns the duration of copyright protection, which has been periodically extended in recent decades. In spite of clear evidence that this cannot be justified in terms of the core IP argument that copyright exists to provide economic incentives to creators to produce new works. As has been noted by a number of commentators, no one has yet discovered a mechanism for incentivising the deceased.

Of course, on its own the report can't achieve much in these three areas. But by raising these issues in a public way it has effectively put down markers. It means that when writing about the area of copyright and its enforcement, we can point back to statements about the need for evidence-based policies, and the fact that practically all the studies trotted out by the content industries are worthless, or that the economic damage of piracy is by no means a given.

Whatever happens to the proposals made in the Hargreaves report – and given the track record of UK governments failing to implement even the most sensible of ideas, it's hard to be optimistic here – I think that these broader underlying points will prove highly useful and may well represent its most important legacy.

Follow me @glynmoody on Twitter or identi.ca.

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