Gowers reckons intellectual property is doing OK

Music will be sampled free of charge and CDs will rise in price to compensate for music that is copied to iPods under a new intellectual property regime proposed by Andrew Gowers today. But most of the UK's laws are just fine, he concludes.

The former Financial Times editor was commissioned by Chancellor Gordon Brown in December 2005 to undertake an independent review of intellectual property. His 150-page report was published yesterday and contains few surprises.

Private copying

Gowers wants to see a private copying exception written into copyright law. That was expected and will find no opposition from the UK music industry. Currently, copying from your own CD to your hard drive and MP3 player is infringement, though the music industry turns a blind eye. Gowers wants the law to reflect reality: "private copying should enable users to copy media on to different technologies for personal use," says the report.

What is more controversial is that Gowers sees no need for an accompanying copyright levy. In France, Germany and many other countries, private copying is allowed but compensated by a tax on blank media. The Copyright Directive says member states can choose to forbid private copying or allow it – provided there is fair compensation for right holders. Gowers believes that compensation can be won another way.

His report explains: "If rightholders know in advance of a sale of a particular work that limited copying of that work can take place, the economic cost of the right to copy can be included in the sale price. The 'fair compensation' required by the Directive can be included in the normal sale price."

Kim Walker, head of Intellectual Property with Pinsent Masons, said: "He's saying the price of CDs will go up."

It may be that music purchased as a download is less frequently burned to CD than music purchased as a CD is ripped to another device – so the price rise may not affect iTunes. Gowers also warns that any private right to copy "cannot be extended retrospectively as copies of works already sold would not include this 'fair compensation'."

Walker said: "You can rip CDs bought after the law changes – which Gowers hopes will be by 2008. But you also need to pay to legalise your current collection."

The report states: "collecting societies may wish to consider making a single block licence available to allow consumers to format shift their back catalogues legitimately."