ALRC releases issues paper on copyright and the digital economy

Posted by Lucy McGovern and John Fairbairn

On 20 August 2012, the Australian Law Reform Commission (ALRC) released its IssuesPaper for the inquiry into Copyright and the Digital Economy. The Paper sets out 55 questions reflecting the issues that will be the focus of the Inquiry as well as proposed guiding principles for reform.

The Terms of Reference for the inquiry are available here. The closing date for submissions in response to the Issues Paper is 16 November 2012.

What is the Inquiry about?

On 29 June 2012 the ALRC received the Terms of Reference for its inquiry into Copyright and the Digital Economy. In particular, the ALRC is to report on whether the exceptions and statutory licences in the Copyright Act 1968 (Copyright Act), are adequate and appropriate in the digital environment.

The terms of reference are broad in scope potentially re-igniting a large number of highly charged debates between disparate industry sectors. The ALRC has sought to give structure and direction to this debate by releasing an Issues Paper that sets a number of specific questions to which the public is invited to respond. We have extracted below some of the key issues raised in the Paper.

Copying for private use

One of the issues under consideration is whether there should be a broader exception for copying for private and domestic use. To this end, the ALRC notes that there are format and time shifting exceptions in the Copyright Act that allow individuals to make copies of copyright material for their own private use, but that technological developments have limited the application of these exceptions. The ALRC draws attention to the recent Full Federal Court decision in National Rugby League Investments Pty Ltd v Singtel Optus Pty Ltd (2012) 201 FCR147 (discussed previously on this blog) in which the court found that Optus was liable for copyright infringement for offering a service that enabled subscribers to record free to air television programmes and play the recordings back at a later time. In reaching this decision, the court held that there is no principle of 'technology neutrality' when interpreting statutory exceptions.

The ALRC has posed the following questions:

Question 7: Should the copying of legally acquired copyright material including broadcast material, for private and domestic use be more freely permitted?

Question 9: The time shifting exception in s111 of the Copyright Act 1968 (Cth) allows users to record copies of free-to-air broadcast material for their own private and domestic use, so they may watch or listen to the material at a more convenient time. Should this exception be amended and if so, how? For example:

(a) should it matter who makes the recording, if the recording is only for private or domestic use; and

(b) should the exception apply to content made available using the internet or internet protocol television?

Fair use and fair dealing

The Paper reopens discussion on whether Australian copyright law should provide a broader US-style 'fair use' exception to copyright infringement. The Paper outlines international developments (including the recent cases handed down by the Canadian Supreme Court, two of which concerned 'fair dealing', legislative developments in India, and the United Kingdom's Hargreaves review). The Paper concludes that 'there may be more of an appetite for a broad, flexible exception to copyright – perhaps based on US-style fair use'.

The Paper also questions the adequacy and appropriateness of the current fair dealing exceptions in the Copyright Act. In particular, the ALRC suggests that the exceptions could be simplified, and examines the possibility of adding statutory exceptions, such as an exception for 'quotation'. The Paper suggests that a 'quotation exception' may occur where three criteria are met:

(a) a work has been lawfully made available to the public;

(b) the making is compatible with fair practice; and

(c) the extent does not exceed that justified by the purpose.

In making the suggestion, the Paper notes Emmett J's 'disquiet' in holding that the Men at Work song 'Down Under' infringed the copyright of the iconic Australian song 'Kookaburra sits in the Old Gum Tree' (EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd (2011) 191 FCR 444).

The ALRC has posed the following questions:

Question 52: Should the Copyright Act 1968 (Cth) be amended to include a broad, flexible exception? If so, how should this exception be framed? For example, should such an exception be based on ‘fairness’, ‘reasonableness’ or something else?”

Question 47: Should the Copyright Act 1968 (Cth) provide for any other specific fair dealing exceptions? For example, should there be a fair dealing exception for the purposes of quotation, and if so, how should it apply?

Question 48: What problems, if any, are there with the operation of the other exceptions in the digital environment? If so, how should they be amended?

Question 49: Should any exceptions be removed from the Copyright Act 1968 (Cth)?

Question 50: Should any other specific exceptions be introduced to the Copyright Act 1968 (Cth)?

Question 52: How can the free-use exceptions in the Copyright Act 1968 (Cth) be simplified and better structured?

Cloud computing and internet functions

The Paper seeks clarification on the operation of copyright law for specific technologies, such as caching and cloud computing. The ALRC gives an example of caching used by search engines 'to improve the internet's performance, allowing search engines to quickly retrieve cached copies rather than having to repeatedly retrieve the copies from remote services'. ALRC notes that, under the current copyright law, such a process may infringe copyright. The ALRC also acknowledges that cloud computing services that provide on demand access to copyrighted material may infringe copyright. The Paper queries whether allowances should be made for these emerging technologies and poses the following questions:

Question 3: What kinds of internet-related functions, for example, caching and indexing are being impeded by Australia's copyright law?

Question 4: Should the Copyright Act 1968 (Cth) be amended to provide for one or more exceptions for the use of copyright material for caching, indexing or other uses relating to the functioning of the internet? If so, how should such exceptions be framed?

Question 5: Is Australian copyright law impeding the development or delivery of cloud computing services?

Question 6: Should exceptions in the Copyright Act 1968 (Cth) be amended, or new exceptions created to account for new cloud computing services, and if so, how?

User-generated content

The Paper considers potential reform for user-generated content that contains copyright materials, such as videos that are uploaded and shared across the internet (the prime example being YouTube). At present, not all user generated content falls within the fair dealing exceptions of criticism or review, or parody or satire. The Paper questions whether there should be an exception framed for using copyright material by individuals for 'social, private and domestic purposes':

Question 12: Should some online uses of copyrighted materials for social, private or domestic purposes be more freely permitted? Should the Copyright Act 1968 (Cth) be amended to provide that such use of copyright materials does not constitute an infringement of copyright? If so, how should such an exception be framed?

Question 13: How should any exception for online use of copyright materials for social, private or domestic purposes be confined? For example, should the exception apply only to (a) non-commercial use; or (b) use that does not conflict with normal exploitation of the copyright material and does not unreasonably prejudice the legitimate interests of the owner of the copyright?

Retransmission of free to air broadcasts

The Paper analyses licensing schemes in light of emerging technologies. For example, the Paper notes that it is currently unclear whether internet protocol television (IPTV) falls within the statutory licensing scheme for the retransmission of free to air broadcasts. The Australian Copyright Act provides that a free to air broadcast is not infringed by retransmission of the broadcast if remuneration is paid under a statutory licensing scheme. Section 135ZZJA then provides that the regime does not apply if the retransmission takes place over the internet. The Paper seeks clarification on the operation and appropriateness of these provisions:

Question 35: Should the retransmission of free to air broadcasts continue to be allowed without the permission or remuneration of the broadcaster, and if so, in what circumstances?

Question 36: Should the statutory licensing scheme for the retransmission of free-to-air broadcasts apply in relation to retransmission over the internet, and if so, subject to what conditions – for example, in relation to geoblocking?

Question 37: Does the application of the statutory licensing scheme for the retransmission of free-to-air broadcasts to internet protocol television (IPTV) need to be clarified, and if so, how?

Other issues

In addition to the themes discussed above, the ALRC poses questions on:

• The operation of the statutory licensing schemes, including the schemes currently in place for educational institutions and the crown;
• The digitalisation of copyright works by libraries;
• The legal treatment of orphan works;
• Data and text mining (that is, the storing of text, images and numbers in databases and repositories);
• The legitimacy of using copyright materials in 'transformative' and 'collaborative' ways (such as using 'samples' and creating 'remixes' and 'mashups'); and
• The ability of copyright owners and users to 'contract out' of statutory exceptions for copyright infringement.

Importantly, the Paper sets out the ALRC's 'starting point' on the guiding principles for reform, namely:

1. Promoting the digital economy;
2. Encouraging innovation and competition;
3. Recognising rights holders and international obligations;
4. Promoting fair access to and wide dissemination of content;
5. Responding to technological change;
6. Acknowledging new ways of using copyright material;
7. Reducing the complexity of copyright law;
8. Promoting an adaptive, efficient and flexible framework.

The closing date for submissions in response to the Issues Paper is 16 November 2012. The ALRC then proposes to issue a discussion paper and call for submissions in relation to that paper. The Final Report is due to be delivered to the Attorney-General by 30 November 2013.