Just terms

15.107 Two stakeholders suggested that the ALRC should consider whether the creation of new exceptions would require ‘just terms’ under s 51(xxxi) of the Constitution.[145] This section considers whether the recommended new exceptions for government use would be affected by the just terms guarantee.

15.108 The Commonwealth Parliament has the power to make laws with respect to ‘the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws’.[146] It can also make laws for the acquisition of property under heads of power other than s 51(xxxi), and these laws are not necessarily subject to the guarantee of ‘just terms’.[147] It is not clear whether a law creating an exception to copyright would be subject to that guarantee. The High Court has indicated that rights under copyright law, because of their susceptibility to modification, are not necessarily protected by s 51(xxxi).[148] The High Court has also held that intellectual property laws inevitably

impact upon existing proprietary rights. To the extent that such laws involve an acquisition of property from those adversely affected by the intellectual property
rights which they create and confer, the grant of legislative power contained in s 51(xviii) manifests a contrary intention which precludes the operation of s 51(xxxi).[149]

15.109 On the other hand, the High Court has held that there is no ‘absolute proposition’ that changes to rights within copyright do not attract the guarantee,[150] and has confirmed that ‘copyright constitutes property to which s 51(xxxi) can apply’.[151]

15.110 Even if the guarantee applies, the creation of a new exception may not amount to an acquisition of property. The High Court has held that creating an exception for private copying reduced the exclusive rights of copyright owners, but did not amount to an acquisition of property, and therefore did not attract the just terms guarantee.[152] In another context, it was held that the use of a person’s property by the Commonwealth did not amount to an acquisition.[153] The recommended exceptions for government use do not result in a transfer of ownership of copyright, and the copyright owner’s rights remain otherwise unaffected.

15.111 Finally, the new exceptions recommended in this chapter are largely for uses of material with no real market value. If remuneration is currently being received, this is because of the operation of the statutory licence, which can be construed as requiring remuneration even where the material has no real market. Where an exception allows use of copyright material with no market value, it would be difficult to argue that s 51(xxxi) requires payment to the owner.

15.112 Should the Government wish to avoid any risk that the exceptions are invalid because of s 51(xxxi), it would be possible to insert a section analogous to s 116AAA, providing that if the exceptions for government use result in the acquisition of property other than on just terms, compensation is payable.