Copyright Modernisation Consultation Paper

The Australian Department of Cabinet and Arts (“the Department“) has recently released its Copyright Modernisation Consultation Paper (“Consultation Paper“), which aims to:

• address the current inefficiencies in the existing Copyright Act 1968 (Cth) (“Copyright Act“) and regulations; and
• balance “the interests of innovators, investors and creators with the health, economic and social welfare of consumers and the Australian society as a whole”, especially with the exponential growth in the digital sphere.

The Consultation Paper begins the Department’s consideration of potential reform options, following the Australian Government’s response to the Final report of the Productivity Commission (“PC“) Inquiry into Australia’s Intellectual Property Arrangements (“PC Report“).

Issues for consultation

The Consultation Paper asks for submissions in relation to the three (3) main areas of the Copyright Act and regulations that may benefit from modernisation, these three (3) areas are:

1. the expansion of flexible exceptions to copyright infringement;
2. identifying exceptions that should be protected against “contracting out”; and
3. increasing access to orphan works.

1. Flexible exceptions

Currently, the Copyright Act grants copyright owners a number of exclusive rights to their copyright material. However, there are limits to these exclusive rights, which include six (6) exceptions contained under the fair dealing regime.  These exceptions are intended to help balance the exclusive rights of copyright owners with the needs of the public to have access to the materials for certain purposes.

The very limited number of fair dealing exceptions in this changing world suggests that the fair dealing regime is no longer in step with society’s needs or expectations. To address this, the Department has proposed the following two (2) options:

1. Introduction of a Fair Use exception (preferred option); and
2. Expansion of the existing Fair Dealing

The Department, the Australian Law Reform Commission (“ALRC”) and the PC have all recommended the introduction of the fair use exception on the basis that it providers ‘greater flexibility for new and innovative usages and is aligned with the position internationally. A fair use model (similar to the one that currently exists in the United States) would provide an exception to copyright infringement provided that the use of the copyright material is ‘fair’. Unlike the fair dealing regime, a fair use exception would not be limited to a set of prescribed purposes, instead it would introduce an open ended ‘fair use’ copyright exception which would use prescribed factors to determine whether a use is ‘fair’ (such as purpose and character of dealing, nature or adaption and the effect of the dealing).

The alternative option that has been proposed by the Department is an expansion of the current fair dealing regime. The aim behind this proposal is to allow copyright law to align with evolving technology, community activities and international standards (such as quotation, non-commercial use, government use etc). However, for the reasons detailed above this is not the preferred option.

2. Contracting out

“Contracting out” occurs when parties include terms in their agreements that prevent copyright users from relying on established copyright exceptions to use copyright material. This type of conduct is particularly problematic where the use of the copyright material would be in the public interest.  The Department has proposed two (2) options for consultation, which would amend the Copyright Act to render contracting out unenforceable. These options are:

1. Making contracting out unenforceable for all copyright exceptions (preferred option); and
2. Limiting the unenforceability of contracting out to prescribed exceptions.

The “making contracting out unenforceable for all copyright exceptions” option would amend the Copyright Act to render unenforceable any part of an agreement restricting or preventing use of copyright material that would otherwise be permitted by a copyright exception. The PC recommended this as the preferred option and the government has supported this recommendation.

The alternative option that has been proposed is to amend the Copyright Act to render unenforceable any part of an agreement restricting or preventing a use of copyright material that would otherwise be permitted by a prescribed purpose exception. Compared to option 1, this “only prescribed purpose option” would be a targeted restriction and would be limited to specific exceptions.

3. Access to orphan works

When copyright owners become unknown or unidentifiable, their works become ‘orphaned’ and users are unable to obtain a licence or even ask for permission to use the material (generally resulting in the copyright material remaining unused). The Department proposes three (3) options for consultation to address this issue:

1. Statutory exception;
2. Limitation of remedies (preferred option); and
3. A combination of 1 and 2.

Both the ALRC and PC have both endorsed as preferred, the “limitation of remedies” approach as it would provide a measure of certainty to users in addition to ‘fair use’. The proposed “limitation of remedies” option (which is similar to the current position in the United States) would involve limiting remedies available for copyright infringement, on the proviso that the user had conducted reasonably diligent searches and attributed the creator the work (where known).

The alternative options that were proposed included:

1. A statutory exception, which would allow for the use of orphan works through defined stand-alone exceptions or referred to in either the proposed fair use or dealing provisions. However, as it would be difficult for to anticipate all possible situations that would warrant the inclusion of an exception and to legislate accordingly, this is not considered the preferred option.
2. A combination of statutory and remedy limitation providing a direct exemption for non-commercial use by collecting and cultural institutions, alongside a limitation of liability for all other uses provided that the user had conducted reasonably diligent searches. Under this model, certain damages would not be available remedies for copyright infringement of orphan works.

Impact on your business

The introduction of the proposed changes is likely to have a real impact on the way copyright material is dealt with in Australia, including:

1. providing greater scope for greater breadth for the use of copyright material, especially in the event that a ‘fair use’ exception is introduced;
2. impacting a copyright owner’s ability to protect aspects of copyright material, rendering unenforceable certain contractual terms that attempt to exclude certain exceptions to copyright infringement; and
3. increasing the scope for use of orphan works either without being exposed to copyright infringement action, or alternatively with exposure to remedies being limited in the event that a use of an orphan work is found to have infringed copyright.

How Gadens can help

Submissions to the Department’s Consultation Paper are due by 5:00pm on Monday 4 June 2018.

In addition to accepting submissions, the Department will be holding a series of roundtables, which will provide extra opportunities for stakeholders to express their view in relation to the proposed changes.

Please contact Gadens if you have any queries regarding the proposed changes or if you would like our assistance in preparing a submission to the Consultation Paper.

Authored by: 
Lisa Haywood, Lawyer