Copyright and the digital economy

Articles Written by Christine Ecob (Partner)

The Australian Law reform Commission (ALRC) was requested by the Government to conduct an inquiry into Copyright and the Digital Economy to determine whether and if so, how, copyright laws should evolve to ensure that they support Australia's economic and cultural development in view of the digital economy's importance and the opportunities that digital technologies create ('the Inquiry').

On 20 August 2012, the ALRC released its Issues Paper for the Inquiry (the Issues Paper).

We provide below a short overview of the Issues Paper and discuss two of the specific issues reviewed, namely, the 'private use' defence and the broader issue of cloud computing.

Terms of reference

The Terms of Reference to the Inquiry call for the ALRC to consider previous copyright reviews as well as the recommendations of the Convergence Review Committee in its Final Report of March 2012 ('the Convergence Review').[1]Consideration of the Convergence Review is important in view of the implications that media convergence may have for content rights holders. The Issues Paper refers to the National Rugby League v Singtel Optus ('Optus') case in relation to the Optus 'TV Now' service to illustrate how new ways of accessing and distributing content might influence content rights holders and users in the converged environment. The Inquiry, however, does not cover issues such as unauthorised distribution of copyright materials using peer to peer networks and the scope of the safe harbour scheme for Internet Service Providers, currently being reviewed by the Australian Government Attorney-General's Department.

Guiding principles

In order to direct its Inquiry, the ALRC proposes eight guiding principles for reform. They include: promoting the digital economy as well as fair access to and wide dissemination of information and content; encouraging innovation and competition; ensuring that copyright law responds to technological changes; and recognising the interests of rights holders. It also requires reform to acknowledge new ways of using copyright material, in particular changed attitudes of consumers and users of copyright material who appear less willing 'to recognise that copyright is a form of property, owned by a creator'.[2]Finally, the ALRC suggests that reform should promote clarity and certainty for creators, rights holders and users by reducing the complexity of copyright law. While any reform aiming at simplifying the reading and operation of the Copyright Act should be supported, the possible introduction of exceptions based on concepts such as 'non-commercial uses' or 'fair use' might actually add a new layer of uncertainty given the difficulty in defining such concepts.

Issues for consideration generally

The ALRC seeks comments on 55 questions covering a wide range of issues such as: caching, indexing and other internet functions; data and text mining; cloud computing; and a possible relaxation of copyright laws in relation to copying for private use, uses of copyright material for online social, private or domestic purpose as well as transformative uses. The Issues Paper also considers the relevance of the fair dealing exceptions in the digital environment, whether specific free-use exceptions should be added to, or removed from, the Copyright Act and the opportunity of introducing a broad, flexible exception in the Copyright Act, similar to 'fair use' under the copyright legislation in the United States. Some questions address the digitisation of works in library and archives. The problem of orphan works is also covered, including the proposal for a 'non-commercial use exception for natural persons using unpublished subject matter derived from lawfully obtained material'.[3] Finally, the Inquiry examines the statutory licensing schemes for educational institutions, crown use of copyright material and retransmission of free-to-air broadcasts. The 'private use' and cloud computing issues are reviewed in more detail below.

Specific issues reviewed

Copying for private use and the time and format shifting exceptions

The format-shifting defences[4]allow a person to reproduce copyright material in one format into a different format, for example copying a sound recording burnt onto a CD to a digital file for listening on an iPod or scanning a hardcopy book to a PDF file to read on an electronic reader.

The time-shifting defence allows people to record broadcast for private and domestic use for viewing at a more convenient time than that of the broadcast.[5]This exception enables us to record our favourite TV program and watch it later. With the rise of catch up TV, which allows viewers to watch recently broadcast television programs on demand on dedicated websites such as ABC iView, NineMSN Video, SBS On Demand, it is questionable whether the time-shifting defence remains relevant six years after its introduction.

However, the time-shifting defence has been the object of close scrutiny by the Federal Court this year in the Optus 'TV Now' case. As explained in a previous issue of Acumen,[6] Optus launched its 'TV Now' service mid 2011 to enable users to record free-to-air television programs such as Australian Football League (AFL) and National Rugby League (AFL) games, and replay them on the device of their choice, such as a PC or mobile phone. The AFL and NRL complained that the 'TV Now' service infringed their copyright in broadcasts of AFL and NRL games. In answer to their letters of demand, Optus commenced proceeding before the Federal Court claiming that the AFL and NRL had made unjustified threats against it.[7]The issue for determination by the court was whether Optus, by operating its 'TV Now' service, infringed the copyright interests of the AFL, NRL and their exclusive licensee Telstra in the broadcasts of some live and pre-recorded AFL and NRL games. The Federal Court accepted that the Optus 'TV Now' service did not infringe copyright in the television broadcasts because the copies of the television programs, being made by the service subscriber, fell within the time-shifting exception.[8]On appeal, the Full Federal Court overturned the decision on the grounds that Optus and the subscriber should be considered as making the copies.[9]Therefore, the court held that section 111 of the Copyright Act did not apply as its scope was limited to the recording of broadcast solely for private and domestic use, and did not cover commercial copying by Optus for the service subscribers. In September, Optus' application for leave to appeal to the High Court was rejected. Therefore, the law on the scope of the time-shifting exception is currently determined by the decision of the Full Federal Court in this matter.

The ALRC outlines the complexity and uncertain scope of application of the format and time shifting exceptions, noting the different outcomes in the first instance and appeal decisions in the Optus 'TV Now' case as a case in point. The Issues Paper suggests that an option for reform may be to permit free uses of copyright material more generally under a broad and general 'fair' or 'reasonable' use exception, or under a new general exception for private and domestic use.

Cloud computing

The use of computing resources delivered as a service over the internet, known as cloud computing, presents amazing opportunities for copyright owners to deliver copyright material to users, and for users to store large amounts of copyright material downloaded legally. However, cloud computing services also have the potential to infringe or enable infringements of copyright. Again, the Optus 'TV Now' case is cited to illustrate the latter risk. The ALRC notes that it may not always be possible to rely on the private copying time and format shifting exceptions if the copies are stored on remote servers operated by third parties rather than on the computer of the person for whom the copy is made. It also outlines the potential for cloud computing service providers to infringe copyright just by performing necessary technical functions, such as reproducing or communicating copyright uploaded - often legally - by their customers to their servers. As a result, the ALRC asks whether Australian copyright law is impeding the development or delivery of cloud computing services, and whether the Copyright Act should be amended to account for them. Given cloud computing represents a major development in the digital environment, answering those questions appears a particularly pressing issue for the Inquiry.


We have only reviewed two of the issues discussed in the Issues Paper in this article and will review others in the next issue of Acumen. The ALRC's Inquiry presents an important opportunity to reconsider the many uses of copyright material occurring in the digital environment, the limited or uncertain application of some of the existing exceptions, the increasing tendency to disregard copyright as a form of property by users and calls for tougher digital laws by content owners.[10]Anyone interested in making submissions or comments to the ALRC may do so by 16 November 2012.


[1]Australian Government, Convergence Review Final Report, 2012.

[2]Australian Law Reform Commission, Issues Paper: Copyright and the Digital Economy, August 2012, at [38].

[3]See David Brennan and Michael Fraser, The Use of Subject Matter with Missing Owners - Australian Copyright Policy Options (2012), 7; Copyright Council Expert Group, Directions in Copyright Reform in Australia (2011), 8–9.

[4]Copyright Act 1968 (Cth) ss 43C, 47J, 109A and 110AA.

[5]Copyright Act 1968 (Cth) s 111(1).

[6]See Christine Ecob, Copyright - A Little Cloudy around the Edges?, Acumen, March 2012.

[7]Section 202 of the Copyright Act 1968 (Cth) grants a right of action to a person who is subject to a groundless threat of legal proceedings for copyright infringement against the maker of the threat.

[8]Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2) [2012] FCA 34.

[9]National Rugby League Investments Pty Ltd v Singtel Optus Pty Ltd [2012] FCAFC 59.

[10]See for example ABC News, News chief call for tougher digital copyright laws, posted 21 August 2012.

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