Fair use and quotation

9.13 The ALRC recommends that a fair use exception should be applied when determining whether quotation infringes copyright and that ‘quotation’ should be an illustrative purpose in the fair use exception.

9.14 Some examples of quotation that may be covered by fair use but are, in at least some circumstances, not covered by existing fair dealing exceptions, include:

  • ‘use of images in a presentation or seminar to illustrate the point being made’;[11]

  • ‘use of short quotations in academic publications’;[12]

  • reproduction of ‘an extract from a book in the course of reviewing a film’ of that book;[13]

  • reproduction of ‘an extract from a play in the course of reviewing a performance of a play’;[14]

  • use of quotations in exhibition catalogues or publicity material for museums and art galleries;

  • use of quotations as epigrams at the beginning of novels; and

  • use of quotations in a range of artistic practices such as ‘sampling’, ‘mashups’ and ‘remixes’.[15]

9.15 Arguably, the reason some of these uses are not covered by existing fair dealing exceptions may be more drafting oversight or lack of foresight, rather than principled outcome. For example, the reason a quotation from a book cannot be used in the course of reviewing a film is that the relevant fair dealing exception only applies where the criticism or review is of that work or another work, and ‘work’ specifically does not include a ‘cinematograph film’.[16]

9.16 In other cases, the problem lies with the purpose-based, or closed-ended nature of the fair dealing exceptions. For example, in many cases quotations will not be directly for ‘criticism or review’ or ‘research or study’, but for other purposes, such as academic publication, that serve important public interests.

9.17 In the context of artistic practice, several stakeholders referred to the case of EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd[17] (the Kookaburra case) as illustrating a gap in the law.[18] In the Kookaburra case, EMI’s recordings of the Men at Work song ‘Down Under’ were found to have infringed the copyright in the song ‘Kookaburra Sits in the Old Gum Tree’.

9.18 In the Full Federal Court decision, Emmett J expressed his ‘disquiet’ in finding copyright infringement in the circumstances of the case:[19]

The better view of the taking of the melody from Kookaburra is not that the melody was taken ... in order to save effort on the part of the composer of Down Under, by appropriating the results of Ms Sinclair’s efforts. Rather, the quotation or reproduction of the melody of Kookaburra appears by way of tribute to the iconicity of Kookaburra, and as one of a number of references made in Down Under to Australian icons.[20]

9.19 The judgment was seen by some as ‘draconian in its decision that the referencing of an earlier, culturally iconic, work by a later creative work was an illegitimate activity’.[21] Fair dealing exceptions were not available, or even mentioned, in the judgment—the fact that the part of work taken was found to be substantial was sufficient to show infringement. Elizabeth Adeney observes that

In everyday speech, what Men at Work had done could probably best be described as ‘quotation’, and indeed it was described as such repeatedly by the judges who heard the case.[22]

9.20 Fair use in relation to quotation may provide more room for some artistic practices, including the sampling, mashup and remixing of copyright material in musical compositions, new films, art works and fan fiction.[23] More broadly, some artistic practices based on appropriation, including collage, where images or objects are ‘borrowed’ and re-contextualised might be covered by fair use.

9.21 It is not possible to say, however, whether or not the Kookaburra case would have been decided differently under a fair use (or fair dealing for quotation) exception. In the ALRC’s view, however, it would have been better for fairness factors to have been available for consideration.

Interpreting fair use

9.22 The concept of quotation is central to fair use doctrine in the United States. Even before the codification of fair use in the US, fair use was considered to cover the quotation of excerpts in a review or criticism for purposes of illustration or comment, and the quotation of short passages in a scholarly or technical work, for illustration or clarification of the author’s observations.[24]

9.23 The Copyright Act 1976 (US) provides that one of the factors determining fair use is ‘the amount and substantiality of the portion used in relation to the copyrighted work as a whole’.[25] US case law establishes that the amount of the copyright work quoted is not always determinative of fair use, and will depend on the application of other fair use factors.[26] It has been held that there is both a quantitative and qualitative element to determining whether a quotation is fair use.[27]

9.24 The ALRC’s third fairness factor is phrased in an almost identical way to the US provision, that is, in referring to ‘the amount and substantiality of the part used’. Some existing Australian fair dealing exceptions already include ‘the amount and substantiality of the part’ as a matter to be considered when determining whether use constitutes a fair dealing.[28]

9.25 In interpreting the application of the fairness factors to the use of any particular quotation, guidance would be found in existing Australian case law and, as discussed in Chapter 5, case law in the US and other relevant jurisdictions.

9.26 In applying fairness factors to the use of quotations, some considerations would be as follows:

The purpose and character of the use. The commercial use of a quotation will weigh against fair use. This may cover, for example, uses of sampling in the music industry. The extent to which the use is ‘transformative’ is also relevant—for example, where a quotation from a book is used as dialogue in a movie.[29]

The nature of the copyright material used. The extent to which the use of a quotation is creative may be relevant. The choice of a photograph of an artistic work in an exhibition catalogue is less creative than, for example, the use of an epigram in a novel—and less likely in the former case to be fair use. If a quotation is taken from an unpublished source it may be considered less likely to be fair than if the quotation is from a well-known work.

The amount and substantiality of the part used. The amount used in a quotation, both in relation to the original and the new material, is relevant to fair use. If, for example, in the Kookaburra case, the music taken was ‘practically the whole melody’,[30] this would dictate against fair use. On the other hand, in some contexts, the use of the whole of a work may be permitted—as where the whole of a short poem is used.[31]

Effect of the use upon the market. The effect of a quotation on the market for the original will be a relevant factor. For example, where use of a quotation may easily be licensed, this may dictate against fair use—as, for example, in the case of sports highlights. Sometimes a quotation may be likely to increase the market value of the original material, which will weigh in favour of fair use.[32]

9.27 In the ALRC’s view, there are strong arguments that Australian copyright law should provide more scope for the quotation of copyright material—particularly where there is little or no effect on the potential market for, or value of, the copyright material.

9.28 The idea of including ‘quotation’ as an illustrative purpose in the fair use exception received express support from many stakeholders[33]—in addition to support for a fair use exception generally. The Intellectual Property Committee, Law Council of Australia stated that quotation should be an illustrative purpose and that this should not be further constrained by quotation for one or more specified purposes:

The specification of one or particular ‘approved’ purposes will lead to arguments that other unspecified purposes were not intended to be protected. Instead, it would be preferable for the nature, purpose and the extent of use to be assessed under the fairness criteria.[34]

9.29 The Australian War Memorial submitted that the ‘capacity to quote from published and unpublished works is a use not adequately covered by specific libraries and archives exceptions’ and should be included under a fair use exception.[35]

Objections to a quotation exception

9.30 Stakeholders who opposed any new exception applying to quotation did so for a range of reasons,[36] including on the basis that such an exception would:

  • be unnecessary as existing exceptions adequately cover quotation;[37]

  • present significant drafting problems and produce uncertainty;[38]

  • interfere with existing licensing practices;[39] and

  • conflict with the three-step test under the Berne Convention.[40]

9.31 Stakeholders emphasised the existing role of the concept of substantiality and the fair dealing exceptions in determining whether quotation is permissible, which were said to provide sufficient coverage.

9.32 News Corp Australia, for example, stated that while existing fair dealing exceptions are ‘limited to purposes of use which are socially beneficial or which do not detract from the commercial competitiveness of the copyright owners’ work’, an exception for quotation ‘focuses on the type of use—with no consideration of the purpose of the use—the implication of which would be significant copyright appropriation’.[41]

9.33 The iGEA suggested that quotation would be ‘better addressed through the concept of “substantial part” as a test for infringement rather than through a specific quotation exception’ as is permitted through existing fair dealing exceptions. Similarly, Australian Film/TV Bodies stated that ‘existing fair dealing provisions already exempt quotations of a substantial part of a copyrighted work in legitimate circumstances’.[42]

9.34 The Australian Copyright Council observed that a quotation exception might work better for some types of copyright material than others.

For example, quotation has a natural meaning when applied to literary works. For other types of copyright material, licensing models exist for quotations. Music and film sampling are examples that come readily to mind. In our submission, this issue is better mediated by the concept of substantial part than by a specific exception.[43]

9.35 Stakeholders raised general concerns about uncertainty being produced by a new exception. The MCA, for example, stated that there is ‘already sufficient uncertainty in the nature of the application of the tests concerning a “substantial part” without including a further similar flexible (and thereby inherently uncertain) concept into the fair dealing exception’. The MCA considered that ‘any exception drafted on that basis may raise more problems than it purports to solve’.[44] Similarly, Cricket Australia submitted that a new fair dealing exception for quotation would be ‘uncertain and open to interpretation, particularly as to when a particular use amounts to quotation’.[45]

9.36 Stakeholders highlighted possible harm to existing (and potential) markets for copyright material, including in music, computer games, publishing and sport. The music industry provided information about existing commercial licensing solutions for the use of sound recordings and musical works as samples.[46] The licensing of sampling was said to be a significant part of music publishers’ and composers’ income.[47]

9.37 ARIA submitted that the introduction of a quotation exception would have a ‘detrimental impact on the creators and owners of sound recordings and musical works’—particularly if the exception was extended to sampling. ARIA strongly recommended that the ALRC consider the ‘inevitable disruption to existing licensing practices and the harm that such changes will bring to artists and copyright owners if such an exception is introduced’.[48] Australian Copyright Council observed that

creating a new fair dealing exception for quotation to facilitate mashups and other user-generated content would need to be justified on significant public policy grounds. For example, freedom of expression. In our submission, an exception simply to legitimate common consumer behaviour would sit oddly as a fair dealing.[49]

9.38 The iGEA considered that an exception for quotation would, for example, damage developing markets for ‘clip licensing’ of video games.[50] Particular concerns were expressed about the impact of a quotation exception on other markets for audiovisual content. Australian Film/TV Bodies stated that to allow for quotation outside the existing fair dealing purposes, for example to ‘use an extract from a television broadcast in another television broadcast, is likely to significantly curtail rights holders’ legitimate licensing markets’ as most content licensed between TV stations ‘consists of short extracts of footage that is less than 60 seconds’.[51]

9.39 COMPPS expressed specific concerns that a broad interpretation of what amounts to a ‘quotation’ might permit unlicensed third parties to communicate highlights of sporting events ‘under the guise of fair dealing for quotation’ and submitted that this would ‘detrimentally and unreasonably impact upon the exploitation of such rights by COMPPS’ members’.[52] Individual sporting organisations also opposed a quotation exception on this basis.[53]

9.40 Some stakeholders considered that a quotation exception may be inconsistent with the three-step test provided by the Berne Convention.[54] Australian Film/TV Bodies submitted

If free usage of short ‘quotations’ becomes permissible, then rights holders operating in the sector are likely to lose their main source of revenue. Such an outcome is not consistent with the second and third steps of the Three-Part Test.[55]

9.41 The ALRC does not find the arguments against a quotation exception to be convincing. As discussed below, there are many examples of uses that may be considered fair but are not covered by existing exceptions, and the substantiality principle is insufficient to protect these uses. Complaints that a quotation exception would interfere with licensing models and conflict with the Berne Convention disregard the effect of the application of the fairness factors.

Quotation as an illustrative purpose

9.42 Arguments may be raised that it is unnecessary to include quotation as an illustrative purpose because it is fundamental to assessing fair use, including in relation to the other illustrative purposes. However, the ALRC considers that it is important to signal that quotation may be fair use, without having to be shown as being for any defined purpose.

9.43 The arguments in favour of including quotation as an illustrative purpose parallel those for introducing a fair use exception more generally. These include that fair use provides a standard that is flexible and technology-neutral, promotes transformative uses, assists innovation and better aligns with reasonable consumer expectations .[56]

9.44 Chapter 4 discusses how introducing fair use is consistent with the framing principles that have informed this Inquiry. Quotation lies at the heart of the concept of fair use and the recommendation to include quotation as an illustrative purpose is also consistent with these principles.

9.45 While quotation is not listed as an illustrative purpose in the US Copyright Act 1976 (US), it is listed in the Israeli fair use provision,[57] and the term is used in the proposed United Kingdom quotation exception, without being limited to a particular purpose.[58]

9.46 Expressly providing more scope for quotation in Australian copyright law will ensure that Australia complies with art 10(1) of the Berne Convention, while continuing to comply with the three-step test.[59]

9.47 Providing quotation as an illustrative purpose may also be criticised on the basis that without further reference to a particular purpose, such as criticism or review, the term quotation may lack sufficient meaning. That is, without further context it may refer simply to the act of using any part, rather than the whole, of a work.

9.48 This point echoes fears that the concept of quotation may, in some way, supersede that of substantiality as the threshold for infringement. In the ALRC’s view, however, this should not be a concern.

9.49 The High Court, in Network Ten Pty Ltd v TCN Channel Nine, in considering the appropriate scope of copyright protection of a television broadcast, reaffirmed the importance of keeping separate the concepts of substantial part and fair dealing. That is, copying does not constitute an infringement, and the defences of fair dealing do not come into operation, unless a substantial part is copied.[60] This reasoning would apply to a fair use or fair dealing exception where a quotation is at issue.

9.50 The ‘quotation right’ provided for by the Berne Convention[61] is not limited to text-based copyright material. Professor Kathy Bowrey observed that the ‘ordinary meaning of quotation is primarily understood in relation to textual and verbal practice’ and suggested that the wording of the illustrative purpose should be extended to state ‘quotation and illustration’.[62]

9.51 The ALRC considers that it is unnecessary to introduce the term ‘illustration’ as courts will be readily able to adapt understandings of quotation to non-literary material—in the same way that the High Court observed that questions of the quality of what is taken can include the ‘potency’ of images or sounds.[63]

9.52 The ALRC recommends that ‘quotation’ be one of the illustrative purposes listed in the fair use provision. This will signal that a use for quotation is more likely to be fair than a use not for quotation. However, all the fairness factors must be considered in determining whether a particular use is fair. As discussed in Chapter 5, the fact that a particular use falls into, or partly falls into, one of the categories of illustrative purpose, does not necessarily mean the particular use is fair. It does not even create a presumption that the use is fair. A consideration of all the fairness factors remains necessary in determining whether the use is fair.