06 Jun 2013

Is fair use coming to Australian copyright law?

Australia's copyright laws could be in for a major shake-up, including the adoption of a US-style fair use exemption, if the proposals in the ALRC's long-awaited discussion paper, "Copyright and the Digital Economy", are adopted.

Another key ALRC proposal tackles the retransmission of free-to-air broadcasting, a particularly high-profile issue since the Optus TV-Now case.

The introduction of a US-style fair use exception

The ALRC proposes repealing all the current exceptions in the Copyright Act and replacing them with a broad and flexible fair use exception, a concept derived from US law.

The Copyright Act would contain:

  • an express statement that a fair use of copyright material does not infringe copyright;
  • a non-exhaustive list of the factors to be considered in determining whether the use is a fair use ("the fairness factors"); and
  • a non-exhaustive list of illustrative uses or purposes that may qualify as fair uses ("the illustrative purposes").

The non-exhaustive list of fairness factors are listed as:

  • the purpose and character of the use;
  • the nature of the copyright material used;
  • in a case where part only of the copyright material is used—the amount and substantiality of the part used, considered in relation to the whole of the copyright material; and
  • the effect of the use upon the potential market for, or value of, the copyright material.

The non-exhaustive list of illustrative purposes listed includes:

  • research or study;
  • criticism or review;
  • parody or satire;
  • reporting news;
  • non-consumptive uses, such as caching, indexing or data or text mining;
  • private and domestic use, such as time-shifting or format-shifting, data backup;
  • quotation;
  • education; and
  • public administration.

These changes are probably the most contentious in the Discussion Paper. Rights holders have identified uncertainty leading to higher transaction costs, including more litigation, as a likely result of a fair use regime. The ALRC however argues that the current regime is already uncertain, and that the benefits of a fair use regime, including acting as a spur to innovation, will outweigh any costs.

Statutory licences

The ALRC has recommended that certain statutory licence schemes provided for in the Copyright Act should be repealed and that licences for the use of copyright material by governments. educational institutions and institutions assisting persons with a print disability should be negotiated separately.

Copyright, broadcasting and the internet

The ALRC proposes that the broadcast exceptions in the Copyright Act should be extended to apply to other forms of communication to the public, including internet transmissions.

This is one of the most complex proposals in the Discussion paper, as the ALRC acknowledges, and it is not in final form. The ALRC is seeking views on how this would work in practice, such as:

  • should the scope of the broadcast exceptions be extended only to the internet equivalent of television and radio programs?
  • should on demand programs still be excluded from the scope of the broadcast exceptions, or only in the case of some exceptions?
  • should the scope of some broadcast exceptions be extended only to content made available by free-to-air broadcasters using the internet?

Copyright and broadcasting: retransmission of free-to-air broadcasts, including over the internet

Pay-TV and other content providers currently have some rights to retransmit free-to-air broadcasts without infringing copyright.

In considering this issue, the ALRC was slightly constrained because it crosses over into territory outside its terms of reference. It therefore has put forward two reform options:

Option 1: Repeal both the free-use exception applying to broadcast copyright and the remunerated exception in relation to underlying rights. Retransmission would then only occur to the extent there was negotiated agreement between broadcasters, retransmitters and the underlying copyright holders.

Option 2: Replace the free-use exception for broadcast copyright with a remunerated exception, similar to that which would continue to apply to the underlying rights. It says this would continue the existing retransmission scheme while providing some recognition for broadcast copyright.

The ALRC determined that if Option 2 is chosen, or the existing retransmission scheme is retained, retransmission "over the internet" should no longer be excluded from the scheme, and the existing scheme should apply to retransmission by any technique, subject to geographical limits on reception. Alternatively, if the "over the internet" exclusion is retained, its scope should be clarified, in particular in relation to internet protocol television.

Libraries: e-works and the preservation of copyright material

The ALRC has proposed that libraries would only be able to supply copyright material in an electronic format to users for research or study if it has taken measures to:

  • prevent the user from further communicating the work;
  • ensure that the work cannot be altered; and
  • limit the time during which the copy of the work can be accessed.

The ALRC also recommends amending the Copyright Act to create a new exception that permits libraries and archives to make copies of copyright material for the purpose of preservation. This will not apply to copyright material that can be commercially obtained within a reasonable time at an ordinary commercial price.

What next?

The due date for submissions on the Discussion Paper is 31 July 2013.

Rights holders will need to consider the impact of these changes very carefully, particularly the fair use exemption, not only when it comes to protecting their intellectual property but also in connection with using copyright material.

The proposed reforms will, if implemented, have significant implications for a host of other sectors, including commercial free-to-air and subscription broadcasters, educational institutions, the public sector and people with disabilities.

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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 communication. Persons listed may not be admitted in all States and Territories.