Principle 4: Providing rules that are flexible, clear and adaptive

2.54 The Terms of Reference refer to the emergence of ‘new digital technologies’ as relevant in copyright reform. Stakeholders strongly endorsed the principle that copyright law should be responsive to new technologies, platforms and services and be drafted to recognise that the operation of the law is fundamentally affected by technological developments, which allow copyright material to be used in new ways.^[77]

2.55 Adaptability and technological neutrality as a framing principle is to be weighed up against other objectives. While not an end in itself, the ALRC considers technological neutrality should be a highly relevant consideration. Stakeholders note that it is ‘an important principle’ as long as benefits exceed costs and the aim of neutrality does not override the rights of creators and owners of copyright material.^[78]

2.56 As far as possible, the Copyright Act should be technology-neutral and predictable in application in such a way as to minimise and avoid unnecessary obstacles to an efficient market, and avoid transaction costs. To this end, the ACCC stated that ‘reforms should be in pursuit of economic efficiency’.^[79] However, the ACCC acknowledged that economic efficiency is only one facet of the broader policy and legal framework and other policy considerations that need to be taken into account.

2.57 Some stakeholders submitted that the existing legislation is increasingly imposing costs through being out of date and unsuited to the digital environment. For example, rapid change in technology and consumer behaviour is creating a ‘growing rift between platform-specific provisions of the Copyright Act and the ways in which Australians are increasingly using copyright materials’.^[80] The Australian Interactive Media Industry Association submitted that, despite all the opportunity offered by the digital economy, ‘the Copyright Act is too technology specific and inflexible and as a result is unable to support today’s and tomorrow’s innovations’.^[81]

2.58 In a converged media environment, where a multitude of different technologies can be used to create and distribute content, it is imperative that regulation does not restrict or impede technological innovation and investment because of artificial and outdated technological limitations.^[82] It is ‘absolutely critical to our success that the Act operates effectively in a converged environment’.^[83]

2.59 The desirability of technological neutrality in copyright reform and, inherent in this concept, notions of simplicity and accessibility to the law has been recognised in previous reform discussions.^[84] It is still a concern: ‘The complexity of existing copyright laws makes it really difficult to innovate with content’.^[85]

2.60 Technological neutrality is regarded as an important policy basis underpinning reform to copyright law at the international level^[86] and indeed, has motivated much review and some reform in Australia.^[87] However, technology-neutral law is not necessarily simple to draft,^[88] and drafting laws of enduring relevance in the face of changing technology may be a good concept but difficult to achieve in practice. Even attempting technology-neutral law may enshrine ‘issues that are peculiar to this point in time, thereby stifling incentives for copyright owners to develop new business models’.^[89]

2.61 While copyright law needs to be able to respond to changes in technology, consumer demand and markets, it also needs to have a degree of predictability to ensure sufficient certainty as to the existence of rights and the permissible use of copyright materials, leading to minimal transaction costs for owners and users and avoiding uncertainty and litigation. Uncertainty is created by definitions that become redundant or differentiate between subject matter or rights holders based on technology rather than underlying principle. As noted by the Copyright Review Committee (Ireland) in its consultation paper:

If copyright law were unclear, or if there were widespread misunderstanding about its scope, then this would certainly create barriers to innovation. Moreover, as has often been observed, predictions are difficult, especially about the future. Hence, as many of the submissions emphasised, it is important that copyright law be as technology-neutral as possible. It is equally as important that it be capable either of adapting or of being easily adapted to unforeseen technological innovations. These are standards by which to judge both existing copyright law and any possible amendments.^[90]

2.62 Stakeholders also strongly argued that ‘reform should not distinguish between technologies but should instead focus on the intention or purpose for which activities are undertaken.^[91] Copyright should not be dictating the direction of technological innovation or hampering the development of more efficient systems.^[92]

2.63 The recommendations for reform in this Report are intended to enhance the flexibility and coherence of Australian copyright law, within the context of considering how copyright rules impact on those affected and more broadly within the Australian community.