Australia: The ALRC report on Copyright and the Digital Economy recommends broad fair use exception

Last Updated: 18 February 2014
Article by John Collins

The ALRC's long-awaited report on Copyright and the Digital Economy, tabled in Parliament yesterday, makes key recommendations that all rights-holders and copyright users need to understand, particularly the introduction of a broad fair use regime and changes to the retransmission scheme for free-to-air broadcasts. Those and other key recommendations are explained below.

A fair use exception

There are currently five specific "fair dealing" exceptions in the Copyright Act which are each a defence to copyright infringement. The ALRC considers that they are too limited and prescriptive in nature.

Instead, the ALRC recommends the introduction of a single "fair use" exception, so that a fair use of copyright material does not infringe copyright. That would be accompanied by a non-exhaustive list of the factors to be considered in determining whether the use is a fair use, and a non-exhaustive list of illustrative uses or purposes that may qualify as fair use.

Rights holders have often expressed concern that a broad fair use exception may harm them because it is uncertain. However, the ALRC stressed that fair use provides the advantage of flexibility, and that if fair use is uncertain, this does not seem to have greatly inhibited the creation of films, music, books and other material in the world's largest exporter of cultural goods, the United States (which has had a similar fair use exception for 35 years).

Alternative fair dealing exception

Given that a fair use exception is largely opposed by rights-holders, the ALRC recommends as an alternative a "fair dealing" exception that consolidates current fair dealing exceptions, and exempts fair dealings with copyright material for new, prescribed purposes. The ALRC warns however, that this exception may be "less flexible and less suited to the digital age".

Retransmission of free-to-air broadcasts

Subscription television companies and other media content providers retransmit free-to-air television and radio broadcasts to their own customers (so the content of broadcasts is provided by other means, such as cable or satellite transmission, in a simultaneous and unaltered manner).

Currently, retransmissions of free-to-air broadcasts do not require the consent of the broadcast copyright owner, although there is a statutory licence for underlying works and subject matter, which does not apply to retransmissions that "take place over the internet".

The ALRC recommends that, in developing media and communications policy, and in the light of media convergence, the Australian Government consider whether the retransmission scheme for free-to-air broadcasts should be repealed (other than in relation to self-help providers).

If the existing retransmission scheme is retained, the ALRC recommends that the scope and application of section 135ZZJA of the Copyright Act, which provides that the statutory licence does not apply in relation to retransmissions "over the internet", should be clarified. A reason for the present uncertainty is that there is no definition of internet and the meaning of that word arguably changes with developments in technology.

Private use and social use

The Copyright Act currently has specific exceptions which allow format-shifting and time-shifting for private use, which were a major issue in the recent Optus TV Now litigation.

The ALRC has recommended that the exceptions for format-shifting and time-shifting should be repealed, and that the fair use or new fair dealing exception should be applied when determining whether a private use infringes copyright. "Social uses" however should not be included as an illustrative purpose for fair use, as it is less likely be fair and has the potential to cause greater harm to copyright owners.

Statutory licences

Statutory licences allow for certain uses of copyright material, without the permission of the rights-holder, subject to the payment of reasonable remuneration. They are a type of compulsory licence – when the licence applies, rights-holders must license their material.

The statutory licences in Parts VA, VB and VII of the Copyright Act have been criticised by educational institutions and governments, and there were strong calls for the licences to be repealed. However, the ALRC has concluded that there remains, at least for now, a role for these statutory licences, albeit that they should be made less prescriptive.

Incidental or technical use

Incidental or technical uses – such as caching and indexing – are essential to the operation of the internet, networks and other technologies that facilitate lawful access to copyright material.

The ALRC has concluded that the current exceptions are uncertain and do not provide adequate protection for these uses, and that:

  • the exceptions for temporary uses and proxy web caching should be repealed; and
  • the fair use or new fair dealing exception should be applied when determining whether incidental or technical uses infringes copyright.

Government use

The parliamentary, judicial and executive arms of government all use copyright material. It is however unclear what government use under statutory licences should be remunerable and if those uses could be considered exempt under the fair dealing exceptions.

The ALRC recommends that the current exceptions for parliamentary libraries and judicial proceedings should be retained, and that further exceptions should be enacted. These exceptions should apply to use for public inquiries and tribunal proceedings, uses where a statute requires public access, and use of material sent to governments in the course of public business. These exceptions should be available to Commonwealth, state and local governments.

Computer programs and back-ups

The Copyright Act exempts the backing-up of computer programs with no similar exception for the backing-up of other copyright, digital material. The ALRC recommends the use of copyright material for back-up and data recovery should be considered under the proposed fair use exception if enacted.

Contracting out

The ALRC also considered whether the Copyright Act should limit the extent to which parties may effectively contract out of existing exceptions to copyright, and recommended new exceptions. An example of such "contracting out" is a provision which provides that a user of copyright material will remunerate the copyright owner for uses that would otherwise be covered by an unremunerated exception.

The ALRC recommends that the Copyright Act should be amended so that contractual terms restricting or preventing the doing of any act which would otherwise be permitted by the libraries and archives exceptions are unenforceable. It also recommends that in addition, the Copyright Act should not provide any statutory limitations on contracting out of the proposed fair use exception.

However, if the fair use exception is not enacted, limitations on contracting out should apply to the proposed new fair dealing exception.

The Government response

The next step is for the Government to consider the report and formulate its response. In a formal address in Canberra today, the Attorney-General Senator Brandis said that "I remain to be persuaded that this [fair use exception] is the best direction for Australian law, but nevertheless I will bring an open and inquiring mind to the debate".

The Attorney-General did commit to three things:

  1. when this law reform process is finished, the Copyright Act will be shorter, simpler and easier to use and understand;
  2. the Copyright Act will be technology-neutral; and
  3. the Government will pay careful regard to the broader international legal and economic context, including the negotiation of free trade agreements with major trading partners, which contain important provisions concerning copyright and other intellectual property issues.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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