Copyright law reform: should exceptions become the rule?

In our article 'Copyright and the Digital Economy' in the October 2012 issue of Acumen, we outlined the principles directing the Inquiry of the Australian Law Reform Commission (ALRC) in relation to 'Copyright and the Digital Economy' (the Inquiry). The Inquiry's objective is to examine 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. We then flagged some of the issues for consideration, including the time and format shifting exceptions allowing copying for private use as well as cloud computing.

Below, we report briefly on the submissions received by the ALRC and examine the issues of online use for social, private and domestic purposes, transformative use, exceptions and the retransmission statutory licensing schemes.

Submissions to the Inquiry

The ALRC received over 280 submissions from a range of businesses and organisations, including creators and their representative bodies, publishers, cultural institutions such as, art galleries, libraries, archives and museums (GLAM), educational institutions, collecting societies and academics. Approximately one third of the submissions emanated from registered land surveyors, who expressed their opposition to any amendment to section 183 of the Copyright Act¹ that would allow certain public uses of copyright material registered or deposited with government bodies outside the scope of the current statutory licensing scheme applicable to the use of copyright material for the services the Commonwealth or State governments.

Not surprisingly, the submissions to the Inquiry reflect a wide range of opinions: Creators and their representatives (referred to as 'Creators' below) generally consider that the current copyright regime strikes a good balance between rewarding creators with commercial benefits and making copyright material available for use by the public. They stress that copyright encourages creativity, and that the property rights of copyright owners should be limited only where this is justified by overriding social benefits. Users of copyright material, on the other hand, express the view that copyright law is too restrictive, or that licensing schemes unduly complicate access. They argue that copyright stifles innovation, is out of step with needs and community expectations, and that copyright law reform should enable or legitimise a wide range of practices. Some of these arguments are further examined in relation with the specific issues raised below.

Online use for social, private or domestic purposes, transformative use and fair dealing exceptions

Fail dealing exceptions

Copyright is generally infringed when a person uses a substantial part of copyright material without the permission of the copyright owner. A series of cases has settled that the test for determining whether a part is 'substantial' is a qualitative rather than a quantitative one: A part is substantial when it is an essential or material part of the copyright work.² However, the Copyright Act recognises that even if the conditions for an action are satisfied, there are various defences or exceptions to copyright infringement. In particular, the 'fair dealing' defences allow a limited number of uses - or dealings - without the copyright owner's consent for the following purposes:

• Research or study:³ Under that exception, activities such as reproducing literary works do not infringe copyright if they are carried out for a genuine purpose of research or study under the ordinary dictionary meaning of these terms;
• Criticism or review:⁴ Copyright is not infringed if the fair dealing is for the purpose of criticism or review, i.e. the passing of some judgment in relation to the copyright material used. The communication of film extracts in a television broadcast dedicated to reviewing new movie releases would typically fall under this exception, whereas it was held that the screening of various programs extracts to support a discussion panel about news, current affairs, entertainment and sport did not;⁵
• Reporting news:⁶ This exception applies only where the use is for the genuine purpose of reporting the news, i.e. providing information about current affairs in newspapers, magazines, periodicals or by means of a communication or in a film, irrespective of whether the use is dictated by commercial considerations;⁷
• Parody and satire:⁸ This exception was introduced in 2006 to recognise the importance of parody and satire to free speech, criticism and public debate. Its scope is unclear as there is no Australian case dealing with the exception. However, it is generally understood that parody and satire should be given their ordinary meaning, referring to the use of irony, sarcasm and ridicule in a humorous manner directed either at the work used itself (parody) or at some external matter or person (satire).

Online use for social, private or domestic purposes

The ALRC's Issues Paper 'Copyright and the Digital Economy' ('the Issues Paper') examines a number of uses of copyright material in the digital environment, such as the creation of user-generated content (UGC) for uploading and sharing on the internet, including on social networking platforms, and the creation of new works by transforming existing ones, for example samples, remixes and mash-ups. The ALRC notes that while some of these uses might fall within fair dealing exceptions, such as criticism or review, parody or satire, or be approved retrospectively under licensing systems such as the monetise system put in place by YouTube, the line between what is allowed and prohibited is often blurry - and is easily overstepped.

In early September 2012, a Sydney based gallery cancelled an exhibition of visual artist Ben Ali Ong's works after it was revealed that he had created some of his works using stock images for sale through photo agencies without acknowledging the original photographs. This incident illustrates that there is no exception for appropriation practices per se under Australian copyright law - neither in the analogue nor in the digital world. While the artworks were to be displayed in the physical world rather than online, the example is relevant because it outlines that copyright must be respected despite the prevalence of technology enabling the manipulation of digital images.

Stating that '[i]rrelevant laws, which do not fit with community practice and seem incapable of change, are not suitable for assisting in the development of an innovation-based economy',⁹ the ALRC questions whether existing exceptions under the Copyright Act should be amended to legitimise practices that are already occurring. For example, should uses of copyright materials for social, private or domestic online purposes, or for transformative uses be more freely permitted?

In the affirmative, should the exception be framed in a manner such that it accounts for the legitimate interest of the copyright owner? In particular, should such exceptions be confined to a non-commercial use or to a use 'that does not conflict with a normal exception of the copyright material and does not unreasonably prejudice the legitimate interests of the owner of the copyright'?¹⁰

Proponents of a flexible fair use provision or of a new specific user-generated content exception emphasise that most copyright infringement occurs in private. They argue that as laws should be created that people will obey, copying should be lawful where it is for private purposes or does not damage the underlying aims of copyright. Creators, on the other hand, contend that acknowledging consumers' behaviour is a relevant consideration in policy formulation but cannot be decisive if it results in legitimising widespread infringement without the policy achieving optimal social benefits.

They submit that copyright policy accepts that a licence is required to use copyright material in an analogue environment, and ease of digital use of copyright material is not a policy reason to distinguish between analogue and digital.¹¹ Creators argue that copyright material can be used without consent outside the scope of exceptions under current copyright law if the part used is not substantial. They also caution against the introduction of exceptions based on a distinction between 'commercial' and 'non-commercial' use because of the difficulties associated with defining these terms, and the impossibility of ascertaining the users' intent at the time they use the copyright material. For example, a singer might upload a performance of a cover without expecting any direct financial return but in the hope of being noticed, and signed to, a record label.¹²

Other statutory exceptions and licensing schemes

Retransmission of free-to-air broadcasts

Part VC of the Copyright Act provides for a statutory licence scheme that allows for the retransmission (for example by a pay TV service provider) of free-to-air broadcasts without permission from copyright owners of works, films and sound recordings included in the broadcasts ('underlying materials'), provided that an equitable remuneration is paid to the owners of copyright in the underlying material.¹³ The retransmission of the broadcast itself is authorised under section 212(2) of the Broadcasting Services Act 1992 (Cth), without the need for the re-transmitter to obtain a licence from the owner of the copyright in the broadcast. As a result, right holders in the underlying materials are remunerated under the Part VC statutory licence for the use of their copyright for retransmissions of free-to-air broadcasts but the owners of copyright in the broadcasts are not.

Importantly, the statutory licence scheme does not apply in relation to a retransmission of a free-to-air broadcast taking place over the internet.¹⁴ Therefore, the retransmission of television broadcast over the internet may be impossible under Australian law if section 135ZZJA of the Copyright Act applies to internet protocol television (IPTV) - an issue that is unresolved.

The ALRC sought submissions as to whether the retransmission of free-to-air broadcasts should continue to be permitted without the permission or remuneration of the broadcaster, and whether section 135ZZJA of the Copyright Act should be amended to allow retransmission over the internet or at least clarified in relation to IPTV.

In their submissions, several right holders, in particular sports governing bodies such as the Australian Football League and Cricket Australia, oppose an extension of the retransmission regime that would cover retransmissions on or via the internet. They consider that such arrangements would undermine the exclusive granting of rights they have with third parties, or their ability to exploit and grant online exclusive rights to the live broadcast of their sporting content, resulting in significant financial detriment. Those arguments were at the centre of the dispute between Optus and the AFL and the NRL¹⁵ in relation to the 'TV Now' service of Optus, which we examined in previous issues of Acumen.¹⁶ Public broadcasters such as the ABC and SBS, on the other hand, are in favour of removing the 'over the internet' exception in section 135ZZJA of the Copyright Act  to allow a technologically neutral licensing scheme to apply, but require that retransmission over the internet should be subject to restrictions, in particular geo-blocking requirements.

Conclusion

The ALRC has announced a round of consultations with reference groups, including content owners, collecting societies, business interest groups, creators and the GLAM sector and will feed the results of these consultations and the submissions into a Discussion Paper. Its release is planned for approximately next year.

From the volume of comments the Inquiry has generated to date, we expect that the copyright debate will continue to rage amongst stakeholders and academics but reform of the Copyright Act, if any, is still some time away.

 

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