HOWZAT

Globalisation means there are far greater rewards than ever for the most innovative firms to compete in ever-larger markets. And there are greater pressures on firms to innovate to survive in increasingly competitive global markets. Innovation — and the IP rights that protect innovation — is therefore key to seizing the opportunities of globalisation.

Similarly, technological advances, especially on the internet, enable greater dissemination of creativity and innovation, as well as creating new models of knowledge accumulation — for example, the Open Source movement. New technologies enable greater re-use of existing artworks and inventions — as in the spread of sampling in popular music or of collaborative research and development.

Globalisation has also brought new opportunities for collaboration. International patent applications have increased 200-fold since the early days of Microsoft, and innovations developed through international collaboration have multiplied.

However, at the same time, these profound changes create new challenges. And it is these challenges that my review was set up to examine. In particular, rapidly increasing global trade and technological change present new threats to the successful enforcement of IP rights.

This is, perhaps, the single biggest challenge facing the IP system.

Adequate protection of rights is particularly important for IP, as ideas are expensive to produce but very cheap to copy. Digitisation has cut the costs of copying and distribution to virtually zero. The Organisation for Economic Co-operation and Development estimates the value of counterfeit goods at 5%-7% of global trade. For the music and film industries, losses to piracy and counterfeiting amount to the equivalent of 20% of their turnover.

Furthermore, globalisation in the 21st century means more companies with more ideas are operating in markets that cross national boundaries. For global businesses, markets no longer respect national jurisdictions, while the legal frameworks for IP operate within national boundaries. Rights must often be obtained and enforced in parallel in different jurisdictions, adding greatly to costs and time delays.

Overlapping jurisdictions also create the potential for confusion. A recent survey for the CBI suggested that 70% of small and medium-sized enterprises are unaware that IP rights secured in Britain do not apply abroad.

With complexity comes cost. IP must not only keep pace with technological change, but efforts must also be made to ensure the costs to business of navigating the system are kept down and that British businesses are supported so they can compete in the global market.

So although my review will not seek to reinvent the IP wheel, it is vital — in a world where ideas and innovation are increasingly important to our economic wellbeing — that we reform the system to meet the challenges and seize the opportunities of a profoundly changing global economy.

I believe the government has a significant opportunity to make improvements to the way IP operates in Britain — and to influence policy in Europe and beyond.

We should seize it with both hands and fashion an IP system that is both conducive to innovation and investment and suited to the digital age.