20.44 Many stakeholders disagreed with proposals to place statutory limitations on contracting out. This view is held primarily because unhindered freedom of contract is seen as important in facilitating the efficient and competitive distribution of copyright materials; and statutory limitations on contracting out may cause uncertainty concerning the enforceability of contracts.
20.45 BSA/The Software Alliance, for example, stated that freedom of contract is vitally important to business in the digital economy because copyright owners are increasingly reliant on licensing agreements (in providing access to content rather than selling copies). Freedom to agree on the terms of licensing agreements
is fundamental to the development of new products and services, which may depend upon new and innovative business models. The ability to agree on specific licence terms, such as the duration of a licence, geographical restrictions, technological platforms, reproduction of material, is essential to those business models.
20.46 The Australian Recording Industry Association stated that, in order to foster the active participation of Australian businesses in the digital economy, it is important to provide them with ‘flexibility to contract and certainty regarding for example, the provision of content from creators and effective protection measures’. Similarly, Australian Film/TV Bodies submitted that, in ‘guaranteeing freedom of contract, the Copyright Act promotes distribution and efficient use of copyright material in online and multi-jurisdictional environments’.
20.47 Sporting bodies also expressed concerns about limitations on freedom of contract. The AFL emphasised that licensing arrangements with media companies are undertaken on ‘an arm’s length basis with large corporations’, which should be ‘free to contract on whatever terms they see fit in relation to copyright exceptions’. The NRL stated that limitations on contracting out ‘even if limited to private and domestic use’ would be problematic as it would prevent, for example, a sporting body ‘licensing digital downloads on a once only or limited use basis’.
20.48 Certainty was a significant concern for stakeholders. John Wiley & Sons observed that ‘agreeing the scope of a use under licence can provide a pragmatic business solution satisfactory to both parties and thus increase legal certainty and mitigate risk, both essential elements of a robust policy for innovation’.
20.49 Springer Science and Business Media stated that contracts and licensing ‘allow specifically defined and tailored agreements and therefore enable legal certainty that exceptions often do not give’. In contrast, if copyright exceptions ‘overrule commercial terms, this is likely to lead to disagreements between rights holders and users about the scope and reach of exceptions’.
20.50 More generally, contract was seen as having an important role in protecting the legitimate interests of copyright holders. For example, an artist who releases music for children may not wish to see his or her sound recordings used in contexts that are ‘adult or perverse’, even though the use may be considered as a ‘fair dealing’. The Coalition of Major Professional and Participation Sports, for example, observed that its members and their licensees may contract out of exceptions to protect the reputation or integrity of their sports—for example, to restrict the use of violent sports ‘highlights’.
20.51 The international competitiveness of Australia was considered to be at risk, if contracting out is limited. That is, limitations on contracting out in Australian law may make Australia ‘less attractive as a hub for business’. The Interactive Games and Entertainment Association stated that Australian creators need to be able to ‘develop new and innovative business models without the risk of such business models being undermined by local copyright exceptions’.
20.52 The fact that the US does not have statutory limitations on contracting out was also considered to be significant, given the ALRC’s proposals to introduce a fair use exception.
20.53 Finally, it was suggested that enacting limitations on contracting out might conflict with Australia’s obligations to comply with the three-step test under the Berne Convention, as ‘rights owners would not be able to resolve by contract any exceptions which may conflict with the normal exploitation of their work’.