Options for reform: statutory licensing, fair use or specific exceptions

15.11 There are certain government uses of copyright material that should not be remunerable, because of their public interest nature, and because they largely concern material that is not commercially available. For example, governments and collecting societies agree that internal use of surveys for land title registration, copying and communicating material in response to freedom of information requests, and copying and digitising correspondence to government, should not be remunerable.[11]

15.12 The question for this Inquiry is whether these types of uses should continue to be made in reliance on the statutory licence, or be considered under a fair use exception or a specific exception. The ALRC has concluded that specific exceptions would best achieve the purposes of copyright law.

15.13 Five Australian government agencies called for exceptions for certain government uses.[12] Copyright Agency/Viscopy proposed that these uses should continue to be made in reliance on the statutory licence, with equitable remuneration negotiated between the parties, in the interests of ‘consistency, simplicity and equity’.[13] Uses that should be free can be ‘zero rated’, and disagreements can be settled by the Copyright Tribunal.

15.14 The experience since 2003 is that disagreements about which uses are remunerable have led to difficult and protracted negotiations over the amounts payable under the statutory licence.[14] The parties (government agencies and collecting societies) have not reached agreement over whether fair dealing and other exceptions are available to governments, or over how surveys should be conducted and what should be counted.[15] The Copyright Tribunal has not been asked to resolve these issues.

15.15 The ALRC concludes that the statutory licence is not an efficient way of managing uses that do not require remuneration. It would be more efficient for the statute to clearly specify which uses can be freely undertaken. An exception would reduce uncertainty and would avoid the expense of including these uses in surveys and the associated processing costs.

15.16 In the Discussion Paper for this Inquiry, the ALRC proposed that government uses could be made in reliance on a fair use exception.[16] The fair use exception asks of any particular use, ‘is this fair?’. In deciding whether a use is fair, four fairness factors must be considered: the purpose and character of the use, the nature of the copyright material, the amount and substantiality of the part used, and the effect of the use upon the potential market for, or value of, the copyright material.[17]

15.17 ALRC considers that fair use could be an efficient way of dealing with government uses. In the US, no specific exceptions or statutory licences are available to government, and even military and security agencies must work within a framework of direct licensing and fair use.[18] In 1999, the Acting Assistant Attorney General noted that ‘reported cases involving application of the fair use doctrine to governmental conduct are rare’.[19] Other fair use jurisdictions simply provide for fair use for use:

  • ‘in juridical or administrative procedures according to law’ (Israel);[20]

  • ‘by or under the direction or control of the Government … where such use is in the public interest and is compatible with fair use’ (the Philippines);[21] or

  • ‘for the purpose of judicial proceedings and of internal legislative or administrative organs’ (South Korea).[22]

15.18 Moving from a regime based on a statutory licence, to a less familiar regime based on a standard of fairness, would pose challenges. As discussed in Ch 5, fair use works best when institutions prepare guidelines and protocols to guide officers in their use of copyright material. The Australian public sector possesses the flexibility to manage such a transition.[23] Future Australian governments may consider that fair use is the appropriate exception for government uses that do not require remuneration.

15.19 However, the ALRC considers that, at the present time, the more efficient way of dealing with the particular government uses discussed in this chapter is by way of specific exceptions. Specific exceptions, if technology-neutral and clear, can reduce transaction costs by avoiding the necessity of considering the fairness factors or developing protocols and guidelines. They are particularly suitable for high volume institutional uses where transaction costs could be high if users had to refer to fairness factors or guidelines for each use. They are suitable for categories of uses where all or nearly all uses are fair (such as where the material used has no real market). The government uses outlined below seem to fit into these categories.

15.20 William Patry suggests that furthering culture requires dynamic laws, but where there are ‘situations with identifiable fact patterns … concrete exemptions, whether contained on a list or otherwise, are desirable. Where we can identify recurring problems, we should provide specific guidance’.[24] The exceptions recommended in this chapter are intended to provide specific guidance for situations that have been identified by stakeholders as recurring problems.

15.21 Nearly all the uses covered by the recommended exceptions are likely to be assessed as fair, if judged according to the four fairness factors. The purpose and nature of the use would be given great weight: the uses are intended to serve the public interest in the free flow of information between the three branches of government and the citizen.[25] With regard to the fourth factor, it is not anticipated that the exceptions will have a significant impact on the market for material that is commercially available. There may be an occasional use that affects the copyright owner’s market. However, if the use is essential to the functioning of the executive, the judiciary or the parliament, or to the principle of open government, it is likely that the use would be considered fair.