Intellectual Property (Hargreaves Report)

Debate between John Hayes and Baroness Burt of Solihull

Thursday 7th July 2011 Westminster Hall

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

I am delighted to be able to respond to this important debate, and I congratulate the hon. Member for Perth and North Perthshire (Pete Wishart) on securing it. He spoke with knowledge and commitment on a subject that I know is dear to his heart. I have, in fact, spoken on the subject on two consecutive days; I was in this Chamber debating with him just yesterday. As I shall explain later, the Minister in my Department with responsibility for intellectual property is Baroness Wilcox, so I am not here as the Minister with responsibility for the subject but am pleased to speak on it. I pray in aid my professional background in the IT industry. I had a small business, which I subsequently made bigger, and was heavily involved with many but not all of the topics that have been debated today.

The Government are acutely aware that there have been previous reviews and consultations on intellectual property, and I understand the point the hon. Gentleman made at the outset: this is a challenging area, not least because of the changing character of the industry and the technology, and consequent events. He is probably right that we will return to the matter time and again, because of that dynamic quality. The Government are equally acutely aware of the need to facilitate growth. That theme has punctuated this debate, and there is a close relationship between how far we intervene in some of these matters and how we catalyse or, conversely, inhibit growth. That has been the perhaps unspoken dynamic at the heart of today’s considerations.

I am mindful of the words of the late Sir Hugh Laddie, a distinguished commentator on such matters and a judge who presided over many intellectual property cases. He said:

“If patents had been applied from the start we would still be on very early operating systems”—

in the IT industry. He continued:

“To give a business method example, if Ford had patented the concept of the assembly line, the US’s industrial development would have been held up”

altogether. So there are, of course, tensions between how we protect intellectual property and how we facilitate the growth that we need to deliver prosperity.

The economic importance of intellectual property is clearly profound and growing, and it has been said this afternoon that the creative industries are critical in delivering the growth that we seek. I have regular interface with those industries in my role as the Minister for Further Education, Skills and Lifelong Learning and am anxious that we tie the development of skills policy to growth, by identifying the sectors, including the creative industries, high-end manufacturing and the information systems industries, in which skills gaps and shortages might limit what we can achieve. Through that dialogue, I have gained some understanding of how we protect innovation. Innovation and growth are intimately linked by nature—a point made by successive speakers—and we need to make critical decisions about how we facilitate innovation and take advantage of its effect on business activity and employment.

This is a complex environment, and it will continue to change, perhaps even more quickly than at the moment. When people think about macro-economics and economic change, they often say, as has been said today, that as economies advance they become more high tech. I do not dismiss that by saying that it is often said—perhaps it cannot be said too often. What is less frequently cited, however, is the increasingly dynamic need of economies as they advance. Increasing dynamism requires public policy makers to be ever more responsive, and nowhere is that more true than in our handling of licensing, patents and copyrights. That is particularly significant in industries that are at the cutting edge, many of which have been cited. They are not all the same of course, and part of the problem with this debate is that we are dealing with an extremely diverse range of sectors and all kinds of innovation, with different pressures and opportunities.

To support growth, we certainly need an intellectual property system that helps business and consumers realise the opportunities that technology and change create. That is why, as the hon. Member for Wrexham (Ian Lucas) said, the Prime Minister commissioned the Hargreaves review in November. Professor Hargreaves was asked to develop proposals on how the UK’s intellectual property framework can further promote entrepreneurial activity, economic growth and social and commercial innovation.

The Prime Minister asked the review to identify barriers to growth in the IP system, how to overcome them and how the IP framework could better enable new business models appropriate to the digital age. The review considered intellectual property and barriers to the growth of new internet-based business models, including information access, the cost of obtaining permissions from existing rights holders and fair use exceptions to copyright and how they might be achieved in the UK. It also considered the cost and complexity of enforcing IP rights within the UK and internationally, the interaction of the IP and competition frameworks and the cost and complexity to SMEs of accessing IP services to help them protect and exploit IP.

The review issued a call for evidence and undertook a programme of stakeholder meetings and events, to engage with a broad range of organisations. The review team also travelled internationally, visiting the USA to share experiences on managing patent systems and discuss the role of fair use in the US copyright system. There were more than 300 responses to the call for evidence, from a wide variety of sources. More than half came from representative organisations such as the Creative Coalition Campaign and the Open Rights Group that represent hundreds of firms and thousands of individual members.

My hon. Friend the Member for Northampton South (Mr Binley) will be pleased to know that 20% of responses came from small and medium-sized enterprises. He was right to point out that some of our most innovative companies are SMEs, perhaps because innovation often springs from the mindset of an individual or small group of people, as I experienced in my own career. I emphasise, as did he, that the interaction between small businesses and larger corporations can be immensely positive in protecting small businesses’ interests.

I do not want to disagree with the hon. Member for Solihull (Lorely Burt), but having worked with IBM for many years, I think that the partner networks established in that industry by organisations such as Microsoft, Oracle and IBM can be positive for SMEs, although I am not complacent about that. I think that my hon. Friend the Member for Northampton South was right to say that those interactions can be a useful means of protecting the interests of small firms, rather than limiting or damaging them. It is not the time to debate that issue, as it is tangential to the thrust of what I want to say, but it is an important matter that perhaps we can debate on another occasion, when I will be more than happy to avail the House of my insight into such matters.

As I said, 20% of the responses came from SMEs. They are usually hard to reach, which is why it is so important that we proceeded on a consultative basis. Small businesses often have fewer resources available to get involved in Government consultations and reviews. We often hear from big representative organisations, and sometimes from large corporations, but ensuring that we have a dialogue with small businesses seems critical. The high response rate from SMEs tells us how important IP issues are to them. The hon. Member for Wrexham is right that the amount of correspondence and information that Ministers, shadow Ministers and MPs have received on the subject reinforces the level of commitment and proper concern felt.

[Lorely Burt]

Given all that the Minister is saying about the importance of submissions from small businesses, I am sure that he is as mystified as I am that the submission from the SME Innovation Alliance was never alluded to or listed among the submissions. Will the Minister confirm that he is prepared to meet me and the SME Innovation Alliance to rectify the Hargreaves report’s failure to take certain things into account?

[Mr Hayes]

The hon. Lady made both those points earlier. With her usual assiduity, she has taken advantage of this opportunity to intervene on me to amplify them. I will deal with them in turn. First, that submission was indeed received and considered, and it played a part in informing the review’s recommendations, although it was not listed because, as I understand, it was received informally rather than through the formal process. Secondly, I am more than happy to commit my noble Friend Baroness Wilcox to meet her. My right hon. Friend the Minister for Universities and Science will want to be involved, too, and will be happy to join that meeting. The Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey) was also mentioned, and I shall deal with him later in my remarks. Given his Department’s involvement in the digital industries, an interface with him would be desirable, too. Having committed three of my colleagues’ diaries, I had better end on that point. However, we will have the meeting. I will insist that it happens.

Professor Hargreaves delivered his report, “Digital Opportunity”, to Ministers and the Government in May. Members know that the Government are considering that report and will not expect me to anticipate our response, but—it is right that the hon. Member for Wrexham raised the issue in his role as shadow Minister—I again make a clear commitment that the Government will publish our response within a month. There is another commitment made by a Minister who is not responsible for these matters; that is one of the virtues of being in this position.