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Australia – ALRC Recommends “Fair Use” In Its Copyright And The Digital Economy Final Report.

31 March, 2014

 

 

As reported in our previous update on the Copyright and the Digital Economy Discussion Paper and Issues Paper, the Attorney General asked the ALRC to review Australia’s copyright laws and consider whether the exceptions and statutory licences set out in the Copyright Act 1968 (Cth) (Act) are “adequate and appropriate” in the light of the digital environment, the public’s expectations and the ubiquitous nature of technology, and whether further exceptions should be recommended.

 

What You Need To Know

 

  • On 13 February 2014, the much anticipated Australian Law Reform Commission (ALRC) Final Report on Copyright and the Digital Economy was tabled in Parliament.
  • Most notably, the ALRC has recommended:
    • the introduction of a flexible “fair use” exception to copyright infringement; or
    • alternatively, the introduction of a single “fair dealing” exception which consolidates the existing fair dealing exceptions and covers fair dealings for certain new purposes.
  • The Final Report also includes a range of other recommended key reforms, including changes to the retransmission scheme for free-to air broadcasts.

 

The ALRC inquiry has been the most significant review of the Act since it came into operation in 1968, attracting over 850 submissions. The Government has not formally responded to the recommendations in the Final Report, but in his Statement to the Senate on 13 February 2014, Federal Attorney-General Senator George Brandis acknowledged that the recommendations would be controversial, and said the Government was “particularly concerned to ensure that no prejudice is caused to the interests of rights holders and creators”.


Primary Recommendation – “Fair Use” Exception


As anticipated from its earlier Discussion Paper, the key recommendation in the Report is the proposed introduction of a “fair use” exception.


The Final Report recommends replacing the many complex and prescriptive exceptions in the Act, including the current fair dealing exceptions, time shifting and format shifting exceptions, with one broad and flexible standard of fair use.


The term “fair use” would not be defined in the Act. Instead, in determining whether a particular use of copyright material is fair, a non-exhaustive list of four principles, or “fairness factors”, would need to be considered. Namely,


1. the purpose and character of the use;
2. the nature of the copyright material;
3. the amount and substantiality of the part used; and
4. the effect of the use upon the potential market for, or value of, the copyright material.


The ALRC has focused on the application of fair use to particular types of use, and has recommended that some of the uses be included for “illustrative purposes” to inform the fair use provision. The ALRC has suggested that the non‑exhaustive list of illustrative purposes include:

 

  • research or study;
  • criticism or review;
  • parody or satire;
  • reporting news;
  • professional advice;
  • quotation;
  • non-commercial private use;
  • incidental or technical use;
  • library or archive use;
  • education; and
  • access for people with disability.


The purposes would not create a presumption that a particular type of use is necessarily fair, but they suggest certain uses are more favoured or more likely to be considered fair.


There has been significant resistance from copyright creators and owners to the introduction of a fair use exception in Australia. Concerns include that by expanding the categories of conduct that would be permitted, the proposed new exception would not adequately protect the interests of copyright owners and creators, and by removing the previous prescription, the proposed new exception would give rise to uncertainty.


In response to such criticisms, the ALRC has argued that the fourth fairness factor (outlined above) would operate as a means of ensuring the interests of creators and other rights holders are considered (and thereby protected). The ALRC has also argued that the formulation of the exception proposed in the Final Report would indeed provide certainty, but within a flexible and adaptable framework.


In this regard, ALCR Commissioner, Jill McKeough, stated that fair use would be critical for Australia’s digital economy because it provides “a flexible exception that can be applied to new technologies and services, which is crucial in the digital economy”.


Alternative Recommendation – Fair Dealing Exception


In light of the opposition by rights holders, the ALRC has also recommended an alternative fair dealing exception, if a fair use exception is not adopted.


Under this alternative the existing fair dealing exceptions would be consolidated and certain new purposes would also be provided for. These new purposes would include, quotation, non-commercial private use, incidental or technical use, library or archival use, education and access for people with disability.


This revised fair dealing exception would share a common list of purposes with the proposed fair use exception, but would replace the list of illustrative purposes with a list of prescribed purposes. Similarly, the fairness factors would be considered when determining whether the dealing is fair, along with any other relevant matters.


Despite fair use and fair dealing sharing many positive characteristics, the ALRC has warned that a confined fair dealing exception will be “less flexible and less suited to the digital age” than a flexible fair use exception.

 

Broadcasting


The ALRC also considered the various exceptions relating to re-transmission of free-to-air broadcasts and whether they are appropriate in the digital economy. The ALRC noted these issues raise questions at the complex intersection between copyright and communications policy (and of course, in the context of the Australian Government not yet having addressed in any substantive manner the many recommendations of the Convergence Review Final Report).


Under the the Act and the Broadcasting Services Act 1991 (Cth), the retransmission of free-to-air television and radio broadcasts by subscription television companies and other media content providers is subject to a range of exceptions, including those that rely on the concept of a “broadcast” and “broadcasting”, and a statutory licensing scheme for retransmission of free-to-air broadcasts.


The ARLC notes that in a changing media environment, distinctions currently made in copyright law between broadcast and other platforms for communication to the public may require justification.


The ALRC has recommended that the Government consider whether the retransmission scheme for free-toair broadcasts should be repealed (other than for self-help providers), thus avoiding the problematic issue of extending the scheme to internet transmissions.


Alternatively, if the existing retransmission scheme is retained, the ALRC has recommended that the scope and application of the internet exclusion should be clarified. Given the complexity of the issues involved, while many of the exceptions depend on a distinction being drawn between “broadcasts” and other forms of communication, the ALRC does not recommend simply removing that distinction to enable the current broadcast exceptions to automatically apply to other forms of communication, but rather recommends that the Government give further consideration to these issues in developing copyright and communications policy.


The ALRC has noted that rather than extending the exceptions to other forms of communication, technological neutrality might be best served by removing existing exceptions that apply only to broadcasts, and some broadcast exceptions may therefore be repealed on the basis that:

 

  • the relevant uses are likely to be covered by the recommended fair use or fair dealing exceptions, or
  • they are amenable to voluntary licensing.


In this regard, the ALRC has controversially recommended the repeal of the statutory licensing scheme for the broadcasting of sound recordings, leaving licences to be negotiated voluntarily.


Other Recommendations


The ALRC has also recommended:

 

  • retaining and reforming a number of existing specific exceptions, as well as introducing new specific exceptions, for unlicensed uses that are clearly in the public interest, and that are highly likely to be fair use;
  • the reform of statutory licences that have attracted criticism from educational institutions and governments;
  • limiting the remedies available for copyright infringement to encourage the use of “orphan works”; and
  • clarity around when owners and users of copyright material can agree to “contract out” of the fair use or fair dealing provisions.


What’s Next? The Australian Government’s Response

 

It remains to be seen whether the Australian Government will implement the recommendations of the ALRC.


On 14 February 2014, in his formal address at the opening of the Australian Digital Alliance forum in Canberra, the Attorney-General Senator Brandis said that he remained to be persuaded that a fair use exception is the best direction for the Australian law. Nevertheless, the Attorney-General promised he would bring an “open and inquiring mind” to the debate and has committed to:

 

  • making the Act shorter, simpler and easier to use and understand;
  • making the Act technology neutral; and
  • paying careful regard to the broader international legal and economic context, particularly in light of the Abbott Government’s negotiation of free trade agreements with major trading partners, which contain important provisions concerning copyright and other intellectual property issues.

 

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For further information, please contact:

 

Anita Cade, Partner, Ashurst
anita.cade@ashurst.com

 

Amber Dalrymple, Ashurst

amber.dalrymple@ashurst.com

 

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