FAST launches “The UK Software Industry: a Manifesto for Growth”
17th May, 2017
Software sector is key contributor to Britain’s tech sector and will play a key role in its continued economic growth in post-Brexit Britain
The Federation Against Software Theft (FAST) has launched its own manifesto ahead of the UK General Election on 8th June 2017, updating its position on a number of key issues now that Article 50 has been triggered and negotiations for Brexit begin in earnest later in the year.
“The UK Software Industry: a Manifesto for Growth” contains a series of overarching policy initiatives that it wants to see the main UK political parties commit to in their own manifestos. FAST will compare and contrast political pledges once the formal manifestos are launched and also takes into consideration the recently passed Digital Economy Act.
Alex Hilton, CEO of FAST, commented: “By the current Government’s own measurement, the UK’s Creative Industries, of which the software sector is a part, were worth a staggering £84billion to the UK economy in 2016, growing at around 8 per cent year-on-year. That means it is generating roughly £9million an hour to UK Plc! The latest figures from DCMS show that the UK IT, software and computer services sector was one of the UK’s fastest growing areas in terms of job creation, having grown by just under 33 per cent over the 2011-2015 timeframe.
“Plainly, the software sector cannot be ignored as somehow just the preserve of large global multinationals. As we have seen with the growth of tech clusters in London, Cambridge and Scotland, technology is a creative powerhouse born and bred here in the UK that needs constant nurturing within a policy and legal framework that will enable it to continue to flourish,” he added.
“The UK economy is made of an increasing number of small technology businesses; notably 95 per cent of the 120,000 enterprises in the information economy sector employ fewer than ten people. This entrepreneurial community needs a strong legal structure to discourage IP infringements and offer a backbone of support. We have therefore developed a Manifesto that focuses on three key areas: enforcement, deterrence and accountability and all within the context of Post-Brexit Britain,” he added.
The ten-point plan comprises:
- Encouraging R&D
FAST recognises the vitally important work of organisations such as Innovate UK (the operating name of the Technology Strategy Board), which encourages collaborative R&D between businesses and academia. Innovate UK claims that for every £1 invested in collaborative R&D some £7 in Gross Value Added is returned
In 2015/6 expenditure on R&D amongst the UK’s mid-sized businesses increased by 2.7%, more than the 2.4% invested by larger and smaller companies.
Innovation lies at the heart of technology leadership and the UK has for generations been looked at as a leader in new tech, processes and ways of working. But to maintain this, the UK needs to continue to proactively offer the business community support and encouragement to invest in R&D.
UK tech companies are struggling to raise second round funding ($50m-$200m) from within the UK. The result often means that control shifts to the US market and the IP follows. FAST is continuing to call on the Government to provide incentives not just for R&D but also for investors in tech companies here in the UK so that the companies in turn can expand and grow into overseas markets. Once the UK leaves the EU, UK Government will no longer be constrained by the rules governing state aid as enforced by the agencies of the EU. As an industry, we ought to consider asking UK Government to develop a more hands on industrial policy that will give the software industry the platform and funding to allow British software companies to become established players on the global stage.
- Extending connectivity
The Digital Economy Act received Royal assent on 8th April but a House of Lords amendment, which called for a legal minimum broadband speed requirement of 30Mbps, did not make it through into the final legislation. Without strong connectivity, the internet economy will struggle to develop at the pace it could. Dependant on this is access to cloud computing power and data storage and the benefits they bring.
- Building on the legal framework
Since its inception, FAST has worked hard on behalf of the UK software industry to ensure that its perspective is considered in the development of IP law, particularly on copyright. The UK must ensure that the law is developed in a balanced manner in accordance with valuing and protecting IP. The recently passed Digital Economy Act 2017 updated the sentencing provisions on the issue of online copyright criminal offences. However the focus needs to remain on ensuring that the regime is fit-for-purpose post-Brexit, particularly in relation to the consideration of suitable sentencing guidelines for IP criminal offences.
- Cost effective and easily accessible copyright litigation
FAST is calling for an easy to access, cost effective environment for Intellectual Property claims where copyright has been infringed. This is especially important for the booming SME software publisher sector. Consideration given to an online legal process for micro copyright claims, using the Money Claims Online model as a method template to embrace the internet age. Enforcement mechanisms must be readily available to micro software houses to enforce rights.
- Muscular law enforcement
Back in 2006, The Gowers' Review on Intellectual Property recommended that the enforcement regime should be both ‘effective and dissuasive’. In 2009, the Ministry of Justice’s Response to Consultation on The Law of Damages recognised that it is “currently possible to acquire licenses for software applications after an infringement has been discovered without any penalty being imposed.” Since that time nothing on this has changed and there is still a notable lack of legal deterrence of corporate use of software out of compliance. Today, if a business user is caught it is highly likely that the business simply has to pay for the software ‘licenses’ it should have had the first place. Businesses therefore take a gamble on software copyright compliance.
- A suitable ‘Takedown’ regime
FAST acknowledges that as we approach Brexit we need to revisit once again whether or not the Notice & Takedown regime within the E-commerce Directive strikes the right balance between those who host content, the cloud service providers, search and the rights holders whose content is routinely held in the cloud. FAST wants to see a public consultation take place on how far after Brexit we should adhere to the approach set out in the E-commerce Directive or whether or not we should take the opportunity after Brexit to align more closely with the balance struck in the American Digital Millennium Copyright Act (DMCA). The purpose of any such consultation would be to ensure that the software industry has the opportunity to state how strong and muscular any Notice & Takedown regime should be where it is clear that rights have been infringed considering the current prevalence of cloud and search. This is especially important given the ever-growing volume of software licenses sold online.
- Maintain investment in PIPCU and championing Trading Standards Enforcement
FAST fully supported and endorsed the setting up of the Police IP Crime Unit (PIPCU) by the City of London police. It is now time to have a national debate about how Trading Standards, given the cuts it has faced to its budget, can be organised on a regional and/or national basis to remain an effective fighting force to drive out rogue traders and IP crime often operating through cyberspace.
- Implement Article 4 of the EU Enforcement Directive or UK legal equivalent
Furthermore, FAST is calling on all political parties to support its call to give organisations, such as FAST, Representative Rights under Article 4 of the EU Enforcement Directive. This would allow these organisations to act directly on behalf of software vendors, granting them the ability to protect their IP rights, as a representative collective allowing publishers to continue unimpeded in their commercial activities and not to be the aggressor necessarily in pursuit of a pirate. FAST recognises that this is a piece of EU law that may not survive in a post-Brexit Britain, but FAST is arguing that it should be retained within the UK or an equivalent provision should be introduced, prior to the introduction of the Great Repeal Bill, which is expected to freeze existing EU law in stasis as part of UK law.
- Educate businesses on the GDPR influence
The GDPR will be a reality for us all irrespective of Brexit. It will be a legal requirement for anyone trading in the EU and is being implemented in the UK in May 2018, a date that precedes Britain’s formal exit from the EU. FAST is calling on all political parties in the forthcoming election not to overlook this and ensure that UK organisations – both public and private – are at best educated on the impact of the new Regulation and engage with our pragmatic regulator in its interpretation.
For example, the GDPR will have a major impact on how companies use software for profiling and automated decision-making processes which is relevant to each and every one of us. The GDPR will also challenge how already existing software is used as the definition of Personally Identifiable Information and its possible interpretations are much wider under the GDPR than they were previously.
The British Government will arguably have some degree of flexibility in implementing the GDPR. Given that flexibility and the enormous potential impact the GDPR will have on companies' processing of personal data, FAST is calling for a public consultation on how the GDPR will be implemented on technology businesses in practice together with the issuing of regulator commentary considering the in-depth negotiations which led to the agreed text of the Regulation at EU level. The software industry needs this consultation to make its views known and to ensure that the GDPR is workable in practice, not least with the advent of the Internet of Things (IoT).
- Deterrence and accountability
FAST also believes that company directors need to be held more accountable under the criminal law for simply knowing about illegal software use as under current criminal copyright provision they cannot be pursued unless a high legal bar can be passed proving they were the controlling mind behind the offence. FAST is pushing for company directors whose remit is software compliance to be made personally liable if neglectful, making directors more proactive in checking whether goods are counterfeit and ensuring that their companies have the appropriate licences in place. FAST’s central mission is to reduce the illegal use of software. Director liability is topical, being an angle being pursued by the UK ICO which has recommended that directors be held personally liable for data breaches.