Review of Intellectual Property and Growth.pdf by tongxiamy


									                      INDEPENDENT REVIEW OF

                          REED ELSEVIER RESPONSE


Reed Elsevier is a world leading provider of professional information solutions in the
Science, Medical, Legal, Risk and Business sectors. Our customers use our products every
day to advance science, improve medical outcomes, enable better legal decisions, evaluate
risk, forge business relationships, enhance productivity and gain business insight.

Reed Elsevier Group plc is owned equally by two parent companies, Reed Elsevier PLC and
Reed Elsevier NV, with shares traded on the London, Amsterdam and New York stock
exchanges. Reed Elsevier‘s revenue for the year to December 2010 was £6.6bn, up by 65%
from £3.5bn in 2000. A significant exporter, just under £1bn of 2010 revenue was derived
from sales from the UK. Our total tax contribution for 2009 to the UK Treasury was £187m.

We welcome the opportunity to respond to the Call for Evidence by the Independent Review
of Intellectual Property and Growth. We note that the Government is asking whether the
current IP framework may in certain respects be obstructing growth by failing to strike the
right balance between delivering protection and enabling competitive innovation and whether
an inflexible framework may inadvertently obstruct the use of technologies or discourage
established businesses from adapting to change. The review team is asked to consider
whether the law might be changed in the interest of promoting innovation and economic

In our response we concentrate on issues relating to copyright. We believe that strong
protection and enforcement are essential to investment and growth and disagree that IP
needs to be weakened to support innovation.

We endorse the submissions to the review by the Publishers Association, the European
Publishers Council and the International Association of Scientific Technical and Medical

The UK copyright framework is not a barrier to growth

We have seen no evidence to support the assertion that the UK IP copyright framework is an
obstruction to growth, and that it obstructs the use of technology. On the contrary, we would
contend that the current copyright framework has served the UK well in terms of growth and
innovation. This is certainly the case in respect of our business - see financial data
mentioned above.

More generally, between 1997 and 2007 Gross Value Added (GVA) of the UK creative
industries rose in absolute terms and as a proportion of GDP, as did the number of UK
creative businesses and persons employed in the industry. Indeed, the GVA of UK creative
industries, which depend on strong IP laws, increased by 102% from 1997 to 2007
compared to 64% for UK GVA as a whole.
                                                             Size of UK Creative Industries, 1997 - 2007
                               70,000                                                                                 7.0%
                                                                                                                                                 GVA of UK Creative

                               60,000                                                                                 6.0%                       % of total UK GVA

                               50,000                                                                                 5.0%
GVA £million, current prices

                                                                                                                             % of total UK GVA
                               40,000                                                                                 4.0%

                               30,000                                                                                 3.0%

                               20,000                                                                                 2.0%

                               10,000                                                                                 1.0%

                                   0                                                                                  0.0%
                                        1997   1998   1999    2000   2001   2002   2003   2004   2005   2006   2007
       Source: Annual Business Enquiry, Office for National Statistics

The number of creative businesses in the UK has increased by 8% from 1998 to 2008 with
9,100 creative businesses added to the economy over this time.

402,000 creative jobs have been added to the UK economy from 1998 to 2008, representing
an increase of 26% relative to 10% for total UK employment.

                                                                                        2,500                                 UK Creative Employment, 1998 - 2008                                             8.0%

                                                                                                                                                                                                                      UK Creative
                                                                                                                                                           6.6%                                  6.7%     6.7%
                                                                                                                                     6.6%       6.5%                                    6.6% 1,978    1,971           Employment
                                                                                        2,000                  6.3%       6.4%                                        6.4%     6.3% 1,906
                                                                                                    6.2%                                               1,879
                                                                                                                                 1,828      1,831                 1,825    1,824                               6.0%
                                       UK Creative Employment (thousands, people)

                                                                                                1,661                                                                                                                 % of total UK






                                                                                           0                                                                                                                  0.0%
                                                                                                1998       1999       2000       2001       2002       2003       2004     2005     2006     2007     2008
 Source: Labour Force Survey, Office of National Statistics. - employees and self-employed

Further, comparing USA and UK GDP would indicate that the US copyright system has not
driven proportionally greater growth in the US, despite claims that the US copyright system
would drive greater economic growth.

                                                                                                                      Comparison of UK and US GDP from 1990 - 2010


  Annual GDP change (%), constant prices



                                                                                          1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010





                               Source: International Monetary Fund, World Economic Outlook Database, October 2010
IP protection and technology are not in conflict

Reed Elsevier is a major investor in technology. For the last 15 years we have been
engaged in the transformational journey in which we have migrated the delivery of our
professional information content from print to online formats. We are now at the point where
86% of our science and technology business revenues and 74% of our legal and
professional information revenues are derived from electronic products. The UK copyright
framework has not in our experience obstructed the use of technology to deliver innovation,
nor have we been impeded from adapting to technological change. On the contrary, it has
enabled us to make the multi-million pound investments to drive this migration, including
employing technological staff: alongside our publishers, editors, journalists and researchers,
we currently employ some 4,500 IT professionals. Over the last decade Reed Elsevier has
invested significantly to combine technology with authoritative content and deliver enhanced
functionality to the user. Some of these products are digital evolutions of existing print
products, some are start-ups. They draw on a combination of IP protected content and
technological enhancement, working together.

We set out below a few examples of innovative Reed Elsevier digital products:

SciVerse ScienceDirect - - is a full text scientific electronic
database offering digital content from more than 2,500 peer reviewed journals and 14,000
books. There are currently more than 10 million articles available electronically, some dating
back to the 1820’s, accessed by over 10 million readers in more than 200 countries. The
investment is digitisation, electronic submission systems and peer review publishing
processes to deliver this platform has been in excess of £300m. The continuous addition of
content and functionality enhancements has resulted in year on year usage growth of
approximately 20%. In the past year we have launched SciVerse Application Marketplace
- - a content and applications open
marketplace which allows academic and commercial developers alike, the ability to develop
innovative new applications using our content, enabling researchers, librarians and
developers to achieve more. As a result of electronic delivery platforms such as
ScienceDirect, 93% of UK scientists now say they are satisfied with access to scientific
journal content, which they also say is the most important type of information they want to
access to be productive.

SciVerse Scopus - - is the world’s largest abstract and
citation database of peer-reviewed literature and quality web sources with smart tools to
track analyze and visualize research. It is designed to find the information scientists need. It
holds 42.5 million records, 22 million with references back to 1996 and 20 million back to
1823. It also references 24 million patents from 5 patent offices. Quick, easy and
comprehensive, Scopus provides extensive support to the research process and enables the
100,000+ peer reviewed articles that are authored by UK scientists each year to be
discovered, read and cited by a worldwide scientific audience, thereby contributing to the
UK’s unquestionably strong position globally in science. For example, the UK accounts for
just 1% of the world’s population and 4% of global research and development (R&D)
spending, but it accounts for 6% of articles published and 14% of the world’s most highly
cited articles.

illumin8 - - is the first technology intelligence solution for corporate
R&D professionals that uses semantic indexing technology to combine web, patent and
scientific content to give researchers actionable solutions and insights in context for their
research problems. It supports use cases such as discovering technologies that create new
product development opportunities; uncovering new uses, applications and markets for
existing technologies; finding potential partners, getting insight into the competitive
landscape and assessing if someone has solved the problem before.

Brain Navigator - - has revolutionised the way neuroscientists
work, becoming a central hub for research. It is an online solution, based on Elsevier’s vast
library of brain publications that enables neuroscientists to browse and compare atlas plates,
species and diagrams using 3D models which facilitate the visualization of brain structures
and improve their understanding. In 2009 it won a PROSE award for best e-product in
Biological and Life Sciences.

Netter apps for Apple iPhone - - is a learning and reference
tool for medical practitioners in training that matches modern diagnostic images with the
anatomic drawings from the Atlas of Human Anatomy by Dr. Frank Netter. It was
commended by Apple for its innovativeness.

Geofacets - - is an innovative search and discovery platform
that combines a wealth of geo-referenced maps and related data, intuitive search functions
and proven Elsevier content into one easy-to-use web-based tool to provide geologists with
the information they need to make accurate geological assessments, and to help oil, gas and
other energy companies to improve their productivity, for example, by increasing their strike
rates when drilling for oil.

SciVal spotlight - - is a customised web-based mapping tool
that enables institutions or countries to evaluate their research performance and set/ adjust
strategies. It offers a multidisciplinary perspective on research output to identify an
institution's strengths. It is designed to provide up to date to support decisions about fund
allocation, staffing, and which new research areas to pursue. For example, the illustration
below shows that the UK has around 400 distinctive research competencies in which UK
researchers are more prolific or highly cited than other researchers. Many of these
competencies are in emerging interdisciplinary fields of science. The illustration shows how
these strengths compare with other R&D-intensive nations that the UK effectively competes
with, such as the US, China and Germany. Tools such as SciVal Spotlight can be deployed
to help the UK maintain and grow its research leadership in science.

Reaxys - – is a web-based workflow solution for chemists
covering organic, inorganic and organometallic chemistry and is designed to support
synthesis planning from idea through to implementation. Chemists use it to find relevant data
not found elsewhere with convenient results visualisation. Tools such as Reaxys help
increase the productivity of UK pharma-biotech companies by helping them develop drugs
more effectively.

Embase - - is a web based Biomedical and Pharmalogical service
serving corporate, academic and Government users with information from 11m+ records
from 1974 to the present and 7m+ unique MEDLINE records from 1966 to the-present.

MD Consult - - offers the most comprehensive clinical medical
information set available in one convenient online resource. It provides instant access to full-
text articles from over 80 medical journals and clinics, 50 leading medical references across
a wide range of specialities, clinically relevant drug information, and over 10,000 patient
handouts. Tools such as MD Consult help reduce the costs of healthcare delivery in the UK
by reducing medical error rates.

Xpert HR - - is the UK's most comprehensive online source of legal
compliance, good practice and benchmarking information made available to HR
professionals as a single subscription service. XpertHR simplifies and improves the
efficiency of HR processes by providing a toolkit for HR professionals to meet their needs in
one place. This includes benchmarking and salary comparison tools, good practice
reference manuals, a legal advice line, news and analysis and Liveflo an innovative new
product which provides step-by-step, interactive employment law workflows.

HotFrog - - is UK’s fastest growing online business directory listing
over 2.8 million UK businesses. HotFrog now has local versions in 34 countries worldwide.
Anyone can list their business in HotFrog, along with contact details, products and services.
Businesses are encouraged to add the latest news and information about their products to
their listing. Hotfrog delivers a quality online presence to businesses, particularly SME’s, by
describing and exposing them online to prospective customers more effectively than the
business can often achieve by itself. HotFrog facts: Over 200 companies added per day,
operating in 34 countries worldwide, 4,400,000 page views per month, 2,400,000 unique
users per month.

Totaljobs – - is the UK's most visited commercial recruitment website
holding the Number 1 market share position since January 2006. Typically
carries over 150,000 live vacancies at any one time; generating around 1 million online job
applications from 2 million unique users that visit the website over 3.4 million times per
month. Totaljobs has provided the largest online recruitment marketplace matching UK
jobseekers with vacancies. In this way job vacancies can be filled more quickly and cost
effectively and job requirements matched more accurately with the appropriately qualified

ICIS - - is the world’s leading digital information provider for the global
chemical and energy markets. ICIS helps companies in these markets by providing them
with high quality, timely and commercially useful information. This includes accurate and
reliable price benchmarks which create transparency in the market and are integral to the
production and trading of petrochemicals. It also provides sales leads and global brand
positioning services increasing the online exposure of chemical and energy companies in the

Bankers Almanac - - is a leading provider of high value online
reference data for banks operating and transacting internationally. Its portfolio of online
solutions helps financial decision makers operate at a global level more effectively and
efficiently such as through facilitating inter-bank payments, managing risk and compliance
(eg up to date data on bank ownership) and building long-term commercial relationships.

Lexis® PSL - - is designed to match the way lawyers work, equivalent to
providing their own professional support lawyer. The content is chosen and compiled by our
expert team of hundreds of solicitors and barristers who themselves have worked in every
size and type of practice, who select, organise and link the information to practice needs to
ensure it is definitive and current. Lexis®PSL provides knowhow, primary law, precedents,
forms and excerpts from authoritative commentary to highlight significant issues. With this
kind of support professional lawyers cut costs, save time, and focus on profitable client work
and business development. Using this product, tasks can be performed in minutes that could
normally take hours.

Relaxation of IP protection would not be a catalyst to growth in online

Given these examples, we challenge the notion that relaxation of IP would be a catalyst to
growth. On the contrary, the relaxation of IP could undermine investments in such innovative
products that would in turn undermine the growth of these products themselves, and
moreover, of the industries whose productivity they support.

We would concur with the research done by Michael E Porter and The Brookings Institute
which delves in detail into the conditions that allow a country to innovate at the global
technology frontier. The findings reveal how an economy's innovation performance is driven
by a combination of strength of IP law, pools of scientists and researchers, quality of basic
research, amount of Government funding, tax based incentives and anti trust enforcement.
See The Global Competitiveness report 2001-2002 Oxford University Press.

Looking at the success factors of leading US online businesses, none have depended on the
weakening of IP protection for their success. Attributes include strength of user experience,
(FACEBOOK) novelty of format, (TWITTER) speed to market, (LINKEDIN) competitiveness
of price point, (SKYPE) comprehensiveness of local coverage (CRAIGSLIST) and network
effects (ZYNGA).

Indeed many leading online businesses have been founded reliant on strong copyright.

 Company         Founded/        Revenue      Valuation     URL                       Description
 Spotify         2006            $18m         $300m           On-demand, streaming music

 Hulu            2007            $108m        $2bn              On-demand TV & movies

 Netflix         1997            $445m        $10.8bn           On-demand video and DVD rental       1997            £1bn         -                Online news, sport, TV & radio

 Amazon          2007            $25bn        $76.4bn     Portable e-reader and e-book retailer
 Pandora         2000            $50m         $300m           Internet radio
 Apple           2001            $1.8bn       $321.8bn      Digital music e-commerce
 Demand          2006            $198m        $1.9bn       Online publishing and social media
Note: revenue and valuation figures are for the latest year where data is available

The UK IP regime does not stifle technology driven innovation, it enables it

UK industry has also shown itself to be highly effective at delivering innovation under the
existing IP framework. A significant number of UK digital start ups have emerged including:

Company            Founded/       Revenue        Valuation     URL                              Description
Lovefilm           2002           £97m           £200m                 Online Film subscription
Betfair            2000           £341m          £933.9m                  Internet betting

Zopa               2005           -              -                  Online "peer-to-peer" lending
Money              1999           £149m          £456.1m         Price comparison website in
supermarket                                                                                     Financial services and Travel     1998           £992m          £577m               Online travel agency & e-tailer

Note: revenue and valuation figures are for the latest year where data is available

IP is recognised as crucial to investors

The following comments from annual reports and other financial documents addressing
investors indicate that technologically advanced companies rely on strong IP to enable their

           "Our patents, trademarks, trade secrets, copyrights and all of our other intellectual
           property rights are important assets for us". "Any significant impairment to our
           intellectual property rights could harm our business or our ability to compete".
           See Google 2004 IPO prospectus.

           "We regard our trademarks, service marks, copyrights, patents, domain names,
           trade dress, trade secrets, proprietary technologies and similar intellectual property
           as critical to our success, and we rely on trademark, copyright and patent law, trade
           secret protection, and confidentiality and/ licence agreements with our employees,
           customers, partners and others to protect our proprietary rights"
           See Amazon Annual report 2009.

            "We create, own and maintain a wide array of intellectual property assets that we
            believe are among our most valuable assets. Our intellectual property assets
            include patents and patent applications related to our innovations, products and
            services; trademarks related to our brands, products and services; copyrights in
            software and creative content; trade secrets, and other intellectual property rights
            and licences of various kinds. We seek to protect our intellectual property assets
            though patent, copyright, trade secret trademark and other laws of the US and other
            countries, and though contractual provisions".
            See Yahoo 2009 Annual Report.

                 Company              Founded/       Revenue     Revenue growth       Market Cap
                                      Launched                   2005 – 2010
                 Google               1996           $29bn       378%                 $193bn
                 Amazon               1994           $34bn       303%                 $76.4bn
                 Yahoo                1994           $6.3bn      20%                  $21.1bn

"Fair Use"

Announcing the review, the Prime Minister remarked that:

      “the founders of Google have said they could never have started their
      company in Britain. The service they provide depends on making a
      snapshot of all the content on the internet at any one time and they feel our
      copyright system is not as friendly to this sort of innovation as it is in the
      United States. Over there they have what are called "fair use" provisions
      which some people believe gives companies more breathing space to
      create new products and services”.

The Call for Evidence asks whether "fair use" principles of US copyright law have somehow
enabled such businesses to launch and succeed. We urge that any conclusions regarding
what fair use has, and has not enabled in the United States vs. the United Kingdom be
drawn with great care. It does not follow that to the extent a particular activity has not
emerged in the UK which has appeared in the US that the absence was caused by copyright
law. As noted in the Michael Porter paper referred to above, more fundamental dynamics
including capital availability, levels of investment risk, collaboration between the public and
private sectors, the degree of networking between and amongst universities and industries
(and between start-up companies), and tax structure come into play.

Reed Elsevier businesses operate on a global basis. 55% of our revenues are derived from
the US and we operate as effectively under the US copyright system as the UK one. We do
not therefore have any fundamental difficulty with the fair use doctrine per se as traditionally
applied by the US courts. With respect to the direct comparison between the US fair use and
UK fair dealing provisions, both follow the same common law tradition and have evolved
over time to take account of changes in technology. The incentive-driven policies of each
body of law are the same. United States copyright law, like its UK counterpart, proceeds
from the assumption that the incentive to profit from the exploitation of copyrights will enure
to the public benefit by resulting in the proliferation of knowledge. Similarly, fair use, like fair
dealing, represents an exception to the copyright owner’s exclusive rights to a claim of
copyright infringement, and excuses otherwise infringing uses when those uses do not
meaningfully interfere with the exercise of those rights. But to the extent comparisons
between UK fair dealing and US fair use law are made, we believe that certain key points
must be kept in mind.

The underlying basis for the US fair use exception for infringement liability does not
generally arise when an intermediary attempts to become the content provider and usurp the
author’s control over expression that s/he creates. Although the fair use doctrine permits a
wide variety of uses, including those made for profit, it does not permit an unauthorized user
to supplant the copyright owner’s current market or reasonable, likely-to-be-established
markets for his work by merely reproducing and repackaging the original work or significant
portions of it.

In the controversial Perfect 10 v Amazon case (508 F 3rd 1146 (9thCircuit 2007)), an
example involving copying infringing thumbnail images freely available on the internet,
Google escaped liability because it persuaded the court that despite the fact it charged for
advertising when the images were displayed, the "significantly transformative nature of
Google’s search engines" (even though the transformative element is supposed to apply to

the message not the medium) "outweighed its succeeding and commercial uses of the
thumbnail images"; the court also took into account the fact that there was no market for
reduced sized images. What that case did not do, was to allow the intermediary to effectively
become the content provider and usurp the author’s control over the use of the expression
they create.

We would note that to our knowledge there have not been any cases in the UK directly
challenging search engines’ ability to copy the internet for the purpose of indexing. No one
has seen fit to take the point against them and search engine businesses have flourished.
Nonetheless, we recognise that search engines have become a de facto public utility and it
may be desirable for their copying for indexing functions to be legitimised if necessary.

We would be very concerned however at any importation of what Google characterize as
"fair use" into UK law that would permit for example, the digitisation of entire works without
permission or payment, as was the situation in the Google Library Books case brought
against Google by publishers and authors in the US in 2005. (Case No 05 CV 8156 DC).
The defendant’s view of fair use in that case, reliant on earlier decisions, was that it was
protected from liability as although it was copying the entirety of an offline work it was only
displaying "snippets" and in any event it responded to notice and take downs.

The effect of such a viewpoint is obvious and devastating and no court in the United States
has accepted it. For publishers of journals, databases, pricing information and other fact
laden works, endorsement of such an emasculated view of copyright would cause
particularly egregious harm. A person looking for a particular point of research information
may, rather than using an authorised copy, simply obtain the relevant quote. That approach
allows Google to copy an entire restaurant guide because its users only want to know about
one particular restaurant – a "snippet". Fair use in the US has never condoned this type of
activity, and it would represent the most basic distortion of the fair use doctrine if it did.
Furthermore, even where the content does not meet the originality threshold required under
US law, the US courts have upheld injunctions against the misappropriation of information in
news reports of a kind and quality that could undermine the incentive to create the
information (International News Service v Associated Press, 219US 215 (1918)).

It is reasonable to assume that any incorporation of a fair use regime into UK/EU law would
lead to an upsurge in litigation by so called "internet innovators" who have eschewed such
lawsuits to date in Europe under the more limited fair dealing non commercial use
categories. LexisNexis holds records of some 233 cases in the US that went to trial around
the complexities of fair use interpretation, with likely many thousands more being settled
before reaching court. Google is paying out some US$30m as part of the Google Library
Books settlement litigation and legal costs. Companies with deep pockets can undertake the
management and financial costs of pursuing such cases, start up SME’s certainly cannot.

As the current framework has served the content industry well for centuries, there is a
concern that calls for so called "fair use" in the UK are in fact shorthand for companies with
business models that do not rely on remuneration for content to be able to take and benefit
from the property of others without seeking authorisation, nor presumably, offering payment.
Around this agenda, recent legal argument in the US has focussed around the definition of
transformative use, with more weight being given to the transformative nature of the
application than to its commercial effect, but intermediaries remain unable even under those
decisions to usurp the content owner’s control. Any well meaning but misjudged
amendments to UK copyright law along transformative use principles risk prioritising one
business over another. We urge caution.
Other modifications to UK copyright law

From a Reed Elsevier perspective, across the range of our businesses and products, we
have not encountered significant difficulties with the current UK copyright system, nor
barriers to new product development. Whilst not particularly relevant to our business, we
acknowledge that there are certain well rehearsed issues such as resolution of the orphan
work situation which need to be addressed. We would also support the minor adjustments to
the CDPA 1988 outlined in the second stage consultation paper by UK IPO in December
2009. Clarification on the law of linking could also be helpful, but would not support any
development which undermined a right holder’s control over its content or its right to oppose
third party activity in relation to it.

We would be strongly opposed and discourage any changes that would require or instigate a
general re-opening of the EU copyright directive or e-commerce directive. Such a process
would likely create uncertainty, damage long settled IP rights, destabilise market
expectations and ultimately damage UK business.

Licensing processes

It must be recognised that with developments in technology, the copyright permissions
regime should be capable of process improvement to serve the wider stakeholder
community. That doesn’t mean that the need for permissions should be removed - but that
the processes to secure permissions for reuse should be streamlined and automated. We
refer to the submissions by the EPC and the UK PA on this issue.

This is already well underway. Elsevier’s 1,800 journal subscriber licences incorporate a
wide range of reuse permissions as standard. These include for example, all uses required
for scholarly sharing, including transmitting excerpts of articles by email or in print, to
colleagues for purposes of scholarly research, whether or not those individuals are affiliated
with an institute licences to access that content. It also permits members of the general
public to use terminals physically located at that institution to access, search, browse, view
and print journal articles at no charge through flexible licensing arrangements. We also
facilitate text mining of our content to help customers deepen their insight and

For non subscribers or uses not covered by subscription terms, the vast majority of
permission requests for journals and an increasing number for books are dealt with
automatically through Rightslink operated by Copyright Clearance Centre. As with any
automated system it has its limitations and cannot accommodate every potential use of our
content, but available 24/7 it provides a high level of customer service to our users. See as
an example the permissions request process for a Cell article at:

In this case the user has some 18 permission options for reuse with additional dropdown
menus expanding choices in the case of translations etc. Options for reuse include: use in a
CDRom or DVD, in promotional materials, for course packs, government reports and use on
a website. The system automatically quotes a charge depending on use and identity of

requester (commercial or non commercial, academic, agency etc) and payment processes
are electronic.

We fully support the initiatives that are underway in connection with DG Information
Society’s support for EPC submitted Big Idea entitled "the answer to the machine is in the

As an example for case study - we have a broad array of content that is accessible at no
cost to users. This content, although free, is still protected by copyright and we have
carefully developed policies about when and how we are comfortable for this content to be
used. Some free content can be used by anyone provided that they acknowledge our
contribution and some free content can be used for any non commercial purpose. Our
challenge comes in communicating these usage policies in a way that will make sense for
our readers, that will encourage compliance and that will stay with the content as it travels
around the web. It would be extremely interesting to be able to link through a recognised
symbol both to simple explanations of usage and to connect back to automated permissions
systems so users have a quick and easy way to increase their usage rights according to
their preferences. Such technological developments are around the corner.

The Call for Evidence asks for views on standard terms and agreed default permissions.
Reed Elsevier is both a large scale licensor and licensee of content. Our arrangements with
suppliers and customers are agreed by mutual consent. They vary depending on
circumstance and need. All parties benefit from the flexibility this brings and we would be
cautious about standard terms or default permissions. In our view this would remove
opportunities for competition between suppliers.

Enforcement of Rights

Different communities have a different take on compliance generally. As Reed Elsevier’s
core customer base is professional we have not experienced the massive wholesale
infringements suffered, for example by the music industry. Nonetheless we still experience
difficulties. Elsevier alone is currently serving some 3,000 notice and take down requests
under the DMCA per month mainly for infringing books. We also have a continuous stream
of compliance litigation to address unauthorised copying and distribution of journal content.
These are usually settled by grant of a licence and financial remediation.

In response to the (rather surprising) question as to the objective of the framework (would
this question be asked in relation to taxation compliance?) we would respond that in terms of
promoting economic growth, and indeed, the rule of law, near total compliance with IP law
should be the objective. In terms of how to best achieve this goal, our experience is that
direct contact and remediation as described above is broadly effective. Some difficulties
arise by differing interpretations as to what is legally permissible, ie the scope of document
delivery services by libraries - which stem from ambiguities in the law; and occasionally we
encounter deliberate persistent commercial infringers where criminal sanctions would appear
to be the only answer.

The Call for Evidence asks if there have been particular issues with particular countries and
we have been requested to supply information in relation to difficulties of enforcement in
China. This has been the subject of ongoing investigation in the United States and we attach
for information at appendix I our response to the US International Trade Commission
questionnaire on the scope of intellectual property right infringement in China. Reed Elsevier
estimates losses in 2009 attributable to internet based infringement in China were in the
region of US$40M. (See response 2.8 page18).

Conclusion and recommendations

       UK digital publishing is dynamic success story;

       The UK Copyright regime is demonstrably not a barrier to growth;

       Investors see strong IPR protection and legal certainty as key;

       Technology and proprietary content are symbiotic for innovation - not alternatives;

       Automated licensing is the future;

       Government should aspire to make the UK the best place in the world to create,
       develop and exploit intellectual property.


©Reed Elsevier Submitted 3 March 2011

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