IP law probe MPs hunt for smoking gun, find plenty of smoke

The IPO whodunnit continues


Analysis 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.”

Similar topics

Narrower topics


Other stories you might like

  • Beijing reverses ban on tech companies listing offshore
    Announcement comes as Chinese ride-hailing DiDi Chuxing delists from NYSE under pressure

    The Chinese government has announced that it will again allow "platform companies" – Beijing's term for tech giants – to list on overseas stock markets, marking a loosening of restrictions on the sector.

    "Platform companies will be encouraged to list on domestic and overseas markets in accordance with laws and regulations," announced premier Li Keqiang at an executive meeting of China's State Council – a body akin to cabinet in the USA or parliamentary democracies.

    The statement comes a week after vice premier Liu He advocated technology and government cooperation and a digital economy that supports an opening to "the outside world" to around 100 members of the Chinese People's Political Consultative Congress (CPPCC).

    Continue reading
  • Arm server chip maker Ampere says it's readying for an IPO
    Reveals confidential filing but no pricing ahead of review by the SEC

    Arm-based server processor upstart Ampere Computing has signaled its intention to go public, and said it has filed the initial paperwork with the US Securities and Exchange Commission (SEC).

    Ampere announced in an a brief statement that it had filed a draft registration statement for an IPO on a confidential basis with the SEC, but did not disclose the number of shares it expects to offer or the price range for the proposed public offering, saying that these have not yet been determined.

    The public offering is expected to be completed following the SEC review process, subject to market and other conditions.

    Continue reading
  • SoftBank aims to keep control of Arm after IPO – report
    Japanese owner may not believe it would get the valuation it has been seeking for a full sale

    SoftBank is said to be planning to keep a controlling stake in Arm after its public offering, rather than divesting itself of the chip design firm as had been thought. The move may indicate that SoftBank does not believe it would get the valuation it has been seeking for a full sale of Arm.

    The planned initial public offering (IPO) for Arm was set to value the chip designer at up to $60 billion, but according to Bloomberg, owner SoftBank is now considering selling off a smaller portion of the business than originally planned so that it can retain a controlling interest in the company.

    One reason for this may be that SoftBank is concerned by the current supply chain issues that are affecting the semiconductor market and which have led to a fall in the value of chip company stocks as investors lose confidence. The Japanese conglomerate may have decided that it is better to hold on to much of Arm for now and wait for better market conditions.

    Continue reading
  • Cloud darling Hashicorp's IPO raises $1.22bn amid modest gains from a $80 start
    Not great, not terrible

    Cloud software biz Hashicorp hit the markets this week with an initial public offering priced at $80 per share after which its stock enjoyed a modest rise as investors cracked open their wallets.

    The Nasdaq debut went ahead on Thursday, and the offer price valued the company at approximately $14bn. The 15.3 million shares of its Class A common stock were expected to result in gross proceeds of $1.22bn. At close yesterday, the stock was priced at just over $85, a bit below highs of $88 but comfortably above the IPO price.

    2021 has had its fair share of tech IPOs. GitLab finally went public in September, attracting a price of $77, per share. It soared above $130 before dropping during November when investors took a bit of a reality check on the loss-making source shack.

    Continue reading
  • Singaporean superapp Grab IPOs – badly – and promises to focus on maps and money
    Shares fell over 20 per cent in its first day on NASDAQ

    Singaporean superapp Grab has signaled an intention to further its digital banking segment and beef up its mapping tech to improve its ride-hailing services, after an underwhelming debut on the NASDAQ stock exchange.

    In an interview on the sidelines of the US market opening yesterday, Grab CEO Anthony Tan told Nikkei Asia that building better digital maps of the areas in which it operates is the number one technology the superapp company will focus on over the next decade.

    "We invest in mapping because it's a very local technology: Local technology on the drivers' side, merchants' side and consumers' side gives us an edge versus other peers," said Tan. The company's second priority is figuring out how to deliver groceries more efficiently for both partners and consumers – which is why the mapping effort will concentrate on finding places drivers can stop.

    Continue reading
  • Globalfoundries files for IPO
    Deal could value chip maker at $25bn

    GlobalFoundries has filed for an initial public offering in the United States.

    Abu Dhabi-based Mubadala, which owns GlobalFoundries, confirmed on Monday what has been rumored for a while: the contract chip maker is going to be publicly listed – on the Nasdaq – and is looking to raise at least $1bn from the move. The IPO could value the biz at around $25bn, it was reported in August.

    GlobalFoundries – which moved its HQ from Silicon Valley to New York in April – has manufacturing facilities in the US, Asia, and Europe, with its most advanced being the 12nm node, which is used for components in PCs and other electronics. It famously gave up in 2018 on going any smaller than that, leading to it breaking promises to make 10 and 7nm chips for IBM. Big Blue sued GlobalFoundries this year as a result.

    Continue reading
  • GlobalFoundries confidentially files paperwork for $25bn IPO – report
    Plus: Toyota, Volkswagen to cut production due to component drought

    GlobalFoundries is reportedly planning to debut on the stock market in early 2022, chilling rumors Intel was set to absorb the US chip manufacturer in a $30bn deal.

    GlobalFoundries has submitted all the forms necessary for its initial public offering (IPO) with America's financial watchdog, the SEC, according to Reuters. The documents are currently confidential and are not expected to be revealed until around October, and the company could be valued at about $25bn.

    In July, rumors circulated that Intel was in talks to acquire GlobalFoundries for $30bn, but this was denied by GlobalFoundries CEO Thomas Caulfield. Word of the company’s upcoming IPO signals that those talks with Chipzilla weren’t very successful, if they ever really did take place.

    Continue reading

Biting the hand that feeds IT © 1998–2022