Table of Contents
Summary
A digital revolution is reshaping our world. How the UK regulates this transformation will determine its future prosperity.
In a research-intensive economy like that of the UK, innovation, R&D, and scientific advancement are key drivers of economic growth.
Legal frameworks that govern the access to and use of information and data—like copyright law—affect the competitiveness and growth of the economy
The UK’s copyright regime is currently misaligned with the requirements of a modern digital economy, which negatively affects cutting-edge research and data-driven innovation.
The UK should learn from countries like the US, Japan, Singapore, Israel and Canada and adopt more flexible and open innovation-oriented IP laws.
This will enable our research-intensive economy to make new discoveries and develop new products and services, which will in turn support growth, social well-being, and job creation.
The Challenge
The UK’s copyright framework is out of kilter with the needs of a modern digital economy. It discourages the data-driven and research-intensive innovation that comes from sharing information among researchers and their partners. As a consequence, we are impeding the innovation and growth fostered by people and research-intensive firms that work in the scientific, medical and technology sectors—the lifeblood of a developed economy.
In 2006, the Gowers Review of Intellectual Property concluded that the current IP framework was insufficiently flexible for the “digital age”. Almost two decades since its publication, the UK’s laws have changed little. In contrast, aiming to support a stronger economy, Japan, Israel, Singapore and South Korea have over the last twenty years all introduced more flexible copyright regimes.
The UK takes a solely prescriptive approach to flexibilities in copyright law, called fair-dealing. It exhaustively and precisely lists which specific acts are permissible using third party information / data without authorisation. Thus, all switches to innovate using information technologies and third party content are set to off, until statute turns them on, creating a situation where data-driven innovation using information technologies is by default unlawful. This inevitably reduces the innovative scope of UK based entities as research organisations, companies and investors concern themselves with the legality of their actions.
In contrast, countries like US, Singapore, South Korea, Israel and Taiwan have "open norms" called "fair use". Although they also have a precise list of permissible acts in copyright law like the UK, this is supplemented with an additional flexible provision.
Rather than exhaustively describe which specific and precisely defined acts are lawful without permission of the copyright owner, open norms create a principle-based test. Therefore, if the activity an individual or an organisation undertakes complies with the test, ultimately determined by the courts or government if needed, it is fair and lawful. Thus, it creates a breathing space for entrepreneurship and innovation, as organisations can make their own judgements whether their actions utilising third party copyright are likely to comply with the test and therefore be lawful.
Our IP laws hold us back from fully realising the potential of the £17 billion of taxpayers’ money we spend on research each year, in particular through industry-research collaborations. We impose huge overheads and red tape on such researchers, who need to spend time and money seeking authorisations that are not required of those based in more innovation-friendly parts of the globe. As a result — compared with the more flexible environments in the US and cutting-edge Asian economies — the UK is an unattractive place to do research and launch research and tech-intensive businesses.
For example, the current UK copyright regime only permits “non-commercial research”. This makes our research-intensive industries and public-private collaborations comparatively expensive and inefficient. UK researchers involved in public-private partnerships cannot benefit from the same possibilities as organisations based in other parts of the world. They are held back from sharing research with private partners, and are faced with far more red tape and time-consuming overheads when doing things that competitors based in more tech and research-supportive countries can freely undertake (see Box 1).
Currently UK-based innovators, researchers, consumers and businesses are faced with a situation where many economically important activities are unlawful in the UK. In terms of legal compliance it therefore makes the UK an unattractive place to do much cutting edge research, undertake public-private partnerships and grow your business due to the legal risk and liabilities undertaking these activities in the UK involve. We are aware of household names in the tech industry who will not undertake cutting-edge research in the UK because of this. Stability AI, for example, established offices in the US and Japan in part due to the more favourable copyright regimes there.
The UK copyright laws’ inflexible and prescriptive approach also means that the law lags behind technological developments and the needs of business. Frameworks that are more open, like US fair-use, can be adapted as new events and technologies unfold. UK courts, on the other hand, are bound to apply our prescriptive and inflexible laws to new technical developments in ways that do not achieve the best outcomes for the parties and society. They are often left waiting for parliamentary action (which can be prohibitively lengthy) to accommodate changes.
Fair use would, subject to case law, render the following activities which are currently illegal in the UK lawful:
Most forms of commercial artificial intelligence
A business undertaking research on the internet using data analysis technologies
University researchers sharing training data or AI outputs amongst research partners.
Consumers making private copies of works they have purchased. E.g. Transferring music from a CD or downloaded to an iPhone, computer etc. The UK is the only country probably in the developed world where this is illegal.
Businesses using music, film, text etc less than a 100 years old at the R&D stage E.g. To develop new forms of high capacity semi-conductors, blockchain, LLMs etc developers need to use copyright works to test their technologies
Businesses, consumers or teachers for their classes using Chat GPT to summarise a document or a webinar.
Full text search of works and the subsequent display of snippets etc. Google has blocked and may continue to block many in-copyright book snippets being available in the UK
Plagiarism services like Turnitin.
Independent repair of software, update of software, improvement and adaptation of software. Increasingly the huge aftersales market of automotives, computers, and anything that involves software etc requires independent access to software. There is no “right to repair” software in the UK although much physical machinery can be repaired.
Phone and computer backup products and services that involve transferring third party data from one physical device to another.
Server mirroring, preservation etc involving copyright works for business sustainability and other commercial purposes.
Certain activities involving sharing of data, articles etc required for public private-partnerships and university spin-outs to function.
Certain activities involving sharing of data, articles etc by the NHS internally as well as externally with businesses for specific purposes.
The UK should reform its IP framework. This was also the conclusion of an independent review of intellectual property and growth by the government in 2011, which concluded that:
In the UK, exceptions have failed to keep up with technological and social change, leading to widespread consequences [...] out of date rules mean this potential is not fully realised. The UK’s world class universities – a sector of strategic importance to future growth, both as [a] source of skilled people and knowledge – find this on a daily basis.
Researchers want to use every technological tool available, and they want to develop new ones. However, the law can block valuable new technologies […] simply because those technologies were not imagined when the law was formed. In teaching, the greatly expanded scope of what is possible is often unnecessarily limited by uncertainty about what is legal. Many university academics – along with teachers elsewhere in the education sector – are uncertain what copyright permits for themselves and their students. Administrators spend substantial sums of public money to entitle academics and research students to access works which have often been produced at public expense by academics and research students in the first place. Even where there are copyright exceptions established by law, administrators are often forced to prevent staff and students exercising them, because of restrictive contracts.
Despite a few minor changes to UK copyright law in 2014, very little has changed since this review took place. A better way is possible.
The more flexible approach to data sharing and copyright law in the US has significantly contributed to its successful tech industry and strong research sector. For example, fair use contributed to the invention of Google: the flexible principles-led approach rendered activities like text and data mining (see AV ex rel Vanderhye v. iParadigms LLC, Authors Guild v. HathiTrust, Authors Guild v. Google) and the operation of search engines lawful without the need for lengthy and protracted updates to legislation.
While the benefits of such an approach were recognised by previous UK governments, change had been frustrated by restrictions imposed through the EU legal framework. In a post-Brexit world, a new government now has a crucial opportunity to act.
The Opportunity
Other countries—such as the US, Japan, Singapore, South Korea, Israel, and Taiwan—have created flexibility in their IP regime to support innovation and growth. These laws have resulted in an environment that supports the growth and strength of research and industry. Empirical evidence shows that positive gains can be had in research-intensive areas of the economy which result in no harm to traditional copyright industries. Benefits can also strongly accrue to artists, such as those who work in the film industry, where the need to refer and reinterpret the work of others is paramount.
Across the board, we see a positive correlation between countries with open copyright systems and growth, as firms in countries with fair use spend more on R&D and subsequently receive more patents than other countries. For example, after the introduction of fair use into copyright law, Singapore saw a growth in its technology industry.
Action in the UK is long overdue. As an economy that is highly dependent on research-intensive and technology-reliant businesses, the UK has much to gain from a flexible and modern approach to copyright law:
A flexible and principles-based approach would place the UK research and technology sectors on equal footing with competitors based in North America and Asia, making the UK a more attractive place to undertake research, and build technology and research-intensive businesses.
Adopting a more flexible framework will allow businesses to quickly adapt to new opportunities, while the government will avoid the need for time-consuming legislation to address every technological advancement.
By reducing unnecessary red tape, the UK will achieve greater value from its billions in annual research spending, enabling it to better compete with the world’s most research-intensive economies.
Plan of Action
Modernising copyright law to support the UK's scientific and industrial strategy is relatively straightforward and can be accomplished swiftly by learning from other countries that have undertaken similar initiatives. The new government should:
On Day One, make it clear that loosening the red tape on research is core to any agenda to turn the economy around and build the tax-base.
Pass a law which introduces “UK fair use” into statute by amending the “Copyright, Designs and Patents Act 1988”. This may best take the form of a separate “Science, Technology, Medical Research & Innovation Act”.
UK fair use could seek to create further predictability, clarity, and flexibility in the IP system by producing guidelines, provisions, and government opinions. In designing UK fair use, the government should look at measures recently passed in other countries (e.g. Israel, South Korea, Singapore) for inspiration.
This law would create the opportunity to introduce complementary laws (see FAQs for a list) to ensure that the UK has a well-rounded framework that supports a strong UK based research-intensive scientific, technical and medical sector.
Incorporate research sector impact analysis into all IP and digital platform legislation reviews, including effects on universities and cross-sector collaborations.
FAQs
Why hasn’t this been done before in the UK?
In 2010, the Cameron Government in the context of its tech investment policy and a drive to reduce barriers to innovation tried to introduce a more flexible copyright approach from the US known as “fair use”. This however was not possible at the time due to the UK being bound by EU law. This is no longer an issue.
In a nutshell, what are the benefits of a flexible approach to IP?
The UK’s scientific and industrial strategy is being undermined by excessive red tape and overheads that other industrialised countries in North America and Asia do not have. Removing burdensome barriers that are out of step with major economies to copying and sharing data and information will create more breathing space for innovators to make new discoveries and launch new products and services. This will lead to economic growth and jobs.
Who would be the winners from such changes?
As the examples cited above show from the US, Singapore, South Korea, Israel and Taiwan, the UK economy as a whole will benefit from a more vibrant and innovative environment that in turn is likely to attract both UK and foreign investment. Empirical evidence suggests that all sectors of the economy will benefit from this ranging from the scientific, medical, and technology sectors through to universities, research organisations, and the creative industry sector. All would ultimately benefit from a more competitive economy, better able to keep up with competitors elsewhere.
Who would lose from such changes?
Research undertaken in countries that adopted open norms like Japan, Israel, South Korea, Canada, United States, and Singapore hasn’t evidenced any material losses to the economy as a whole, or to any particular sector within it.
There have been efforts in these countries to oppose such moves, although these have been dismissed by relevant authorities for the lack of underpinning evidence. For example, Canada’s adoption of a flexible exception around education coincided with declining use of photocopying (to the benefit of direct licensing with publishers), leading to the relevant photocopying collecting society making dramatic claims about the impact of reform. This has been roundly dismissed, by the relevant Canadian parliamentary committee, which cites the positive benefits to education that have resulted from the reforms. Similarly, in Israel, opposition to the introduction of fair use based on claims it would undermine copyright protection have been found to be baseless. On the contrary, empirical evidence shows that fair use is far more predictable than its detractors would suggest.
The creative sector may be initially reluctant to support this change. However, several countries with flexible copyright laws, including the US, Japan, and South Korea, boast thriving entertainment sectors with successful exports. Notably, South Korea's global entertainment boom followed its 2011 adoption of fair use. As in these countries, there is no reason to think that UK fair use would negatively impact the creative industry.
Would these changes affect any international obligations the UK has?
No. Flexible norms are entirely in line with international law, a point which has been affirmed as part of the World Trade Organisation rulings. Moreover, the legitimacy of fair use international law was a precondition for the United States accession to the Berne Convention and its transplant into the laws of other countries has similarly not raised any concerns.
Would the introduction of a flexible approach to copyright undermine the legitimate interests of rightsholders?
No. Evidence from other countries show that effects on right holders have varied from neutral to positive. Moreover, where there has been litigation, the courts have taken a conservative approach. Governments can also mitigate any legal uncertainty by issuing guidance and training to the judiciary. In countries like Japan and Singapore where open approaches to copyright have been introduced, there has been no litigation and the changes welcomed by all sectors of society.
What safeguards for rights holders come with fair use?
As stated above, fair use is compliant with international law. Thus, just like any other flexibility in UK copyright law, it is only “fair” if it does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.
How would such an approach support the research sector and the knowledge transfer agenda?
It would reduce a significant bureaucratic barrier, both lowering the costs of performing research in the UK, and addressing a key chilling effect on researchers (see Box 1 for an example). Most importantly, it would mean that researchers engaged in public-private partnerships would not face more limited access to knowledge, or more restricted possibilities to carry out research than their peers in other countries.
What complementary laws would support the UK research sector in a “Science, Technology, Medical Research & Innovation Act.”?
There are many laws that could reduce barriers to innovation in the sector. These would include:
Introduce a law ensuring that publicly funded works by academic authors are made available online in an open repository. This would allow public access and benefit citizen scientists and R&D-oriented companies. In Scandinavia, such laws are known as "parallel publishing laws."
Return UK copyright law to its pre-EU state, ensuring that,like many other countries, copying supports all forms of research, whether for commercial or non-commercial purposes. This change would support research-intensive work, public-private partnerships, and the UK's global reputation for knowledge transfer.
Ensure that educational and research institutions have the right to access all forms of content online. In the analogue world, university libraries could purchase any book available on the market. However, in the digital world, there is a growing trend of refusing to licence to educational establishments. This practice should not be permitted, and educational institutions should have the right to access all content on fair and equitable terms.
Ensure that when lawful acts related to research and R&D, as decided by Parliament, are hindered by private technologies, swift circumvention is allowed. International best practice dictates that when "digital locks" frustrate lawful acts, access should be granted to lawful users within 72 hours.
Stephen Wyber is Director of External Affairs at the International Federation of Library Associations and Institutions and co-founder of Knowledge Rights 21. He previously worked at the UK Embassy in Paris and the Permanent Delegation to the OECD. After undergraduate studies in the UK, he studied at the College of Europe.