Current regulatory models

3.122 Reform should promote the development of a policy and regulatory framework that is adaptive and efficient. The costs and benefits to the community should be taken into account in formulating options for reform. The Australian Government Best Practice Regulation Handbook requires law reform to ‘deliver effective and efficient regulation—regulation that is effective in addressing an identified problem and efficient in terms of maximising the benefits to the community, taking account of the costs’.^[161]

3.123 The ACCC endorsed a regulatory framework in which negotiating an understanding of acceptable uses of copyright material may be more effective and efficient in reducing inefficiencies than a strict enforcement regime which potentially inhibits innovation:

where the parameters can be set so that the rights of copyright holders are able to be preserved and protected commensurate with the objectives of providing incentives to create copyright material … balanced against the potential for innovative business practices to meet and develop consumer expectations and practices.^[162]

3.124 A number of stakeholders pointed to uncertainty in applying current copyright law, due to the complexity or inadequacy of current legislation that deters innovation and promotes risk-averse behaviour.^[163] For example, State Records NSW advised that it is constrained in ‘exploring new digital means of access to government archives due to uncertainty in how to apply the many exceptions provided in the Copyright Act’.^[164]

3.125 A number of submissions questioned whether the current legal and institutional structures in copyright law offer an effective, efficient and functional model for dealing with digital content copyright issues, and what alternatives might apply. For example, the ACMA pointed to the need for ‘a mix of regulatory strategies’ for dealing with digital content issues in any revised copyright framework. These include: direct regulation with an emphasis on compliance and enforcement of rights and obligations; industry co-regulation and self-regulation; technology applications to assist with content management; and cultural and behavioural changes needed to promote and protect access to content.^[165]

3.126 One theme that emerged from submissions was the desirability of ‘principles- based’ drafting of the Act,^[166] with details and examples supplied by regulations to the Act, supplemented by industry codes, guides to best practice, and the like. ^[167] However, despite Australians generally being concerned about over-regulation, many submissions revealed a desire for even more copyright regulation, on the basis that this would increase certainty.

3.127 Stakeholders also noted that this Inquiry is not dealing with the whole picture of reform, and piecemeal amendment ‘may not reflect the policy underlying the copyright regime’.^[168] Furthermore, copyright is just one aspect of digital media markets which are themselves ‘a construction of the interplay of media, telecommunications and copyright law’.^[169] In this context and ‘in accordance with historical jurisprudential tradition, the Copyright Act should be confined to expressing legal principles that affect us all, in a manner that assists in generating the required normative framework that allows it to be broadly understood’.^[170] The statute alone cannot achieve clarity and certainty without the capacity to capture relevant policy and context factors.

3.128 The Australian Copyright Council seemed to cast doubt on a ‘standards’ approach on the basis that a ‘rules’ approach is more appropriate for Australia, given the different constitutional and legal tradition in which Australian and US jurisdictions operate.^[171] Uncertainty of application, lack of precedent and the existence of satisfactory exceptions are also reasons given for not recommending a fair use exception in Australian law, views shared by a number of stakeholders. However, alternative views expressing the desirability of introducing fair use into Australian copyright law have been expressed by a number of other stakeholders.

3.129 The ACCC agreed that principles or standards-based legislation is a ‘pragmatic approach to meeting the demands on copyright law in the context of a fast-developing digital economy’ and would lessen the dampening effect on business practices and innovation of delays between market developments and legislative change.^[172]

3.130 The ACCC stated that ‘standards-based legislation has the ability to provide the degree of flexibility required for meeting the demands of users and rights holders as changes occur in the digital economy’.^[173]

3.131 With respect to developing an understanding of legislative principles, the Arts Law Centre of Australia pointed to the usefulness of the Fair Use Codes and Codes of Best Practice guidelines, developed in the US by Peter Jaszi and Pat Aufderheide. The Guidelines were designed to educate users on fulfilling the requirements of copyright legislation.^[174] A number of stakeholders commented on the possible uses of guidelines agreed between owners and users to find ‘common ground’ in terms of practices relating to copyright material.^[175]

3.132 Guidelines for ‘diligent search’ for orphan works have been developed in Europe and are referred to by the International Federation of Reproductive Rights Organisations (IFFRO), which ‘strongly suggested’ that such guidelines could be established in Australia. IFFRO sees this operating in conjunction with an orphan works registry.^[176]

3.133 The Department of Science, Information Technology, Innovation and the Arts (Qld) pointed out the many ‘legally ambiguous’ areas in the Copyright Act at present, and stated that ‘the business community would benefit from greater clarity in relation to copyright and acceptable practices, and the formulation of clear guiding principles’.^[177]

3.134 Consult Australia, representing design, architecture, technology, survey, legal and management services firms, considered that reforming the law to allow adaptation to technological change is a strong reason for introducing fair use, and submitted that:

any legislative change be accompanied by the development of non-binding guidance material made available to business and other stakeholders, to assist in raising their awareness of their rights and the limitations to their use of copyright material.^[178]

3.135 Sporting bodies are concerned that changes to copyright law may impact more harshly on them than other sectors. In particular, sporting bodies which rely mostly on broadcast copyright due to lack of copyright protection for their underlying ‘spectacles’, use contract and industry arrangements to regulate their business, and fear the disruption that changes in copyright law may cause.^[179]

3.136 Sporting bodies are concerned that the existing exception for the reporting of news is being exploited and relied on by third parties to use an excessive amount of content (such as footage of sporting events) for a purpose other than the reporting of news, without a licence.^[180] The exception, it is argued, is being used for other purposes, such as driving traffic to particular websites.^[181]

3.137 Submissions urged greater definition of ‘news’ and ‘reporting the news’ as part of the current fair dealing exception.^[182] It was argued that ‘[t]he exception for the purpose of news reporting should include whether the purpose of the use has an impact on the market or potential market for the content’.^[183] This is an aspect of the fair use factors proposed by the ALRC.^[184]

3.138 However, News Ltd pointed to the undesirability of legislation defining too closely what ‘reporting the news’ is, and also what volume of material should be included in the concept. Rather, negotiations between news organisations and sports organisations, with the ACCC assisting, have led to a code of practice for sports news reporting.^[185]

3.139 Development of an industry code is recommended by the Book Industry Strategy Group Report to be adopted ‘in accordance with the legislative framework’ in order to combat book piracy, with the government acting as an intermediary in negotiations. In responding to the report, the Government noted that a number of meetings had already taken place with the Attorney-General’s Department and industry to find an acceptable way forward.^[186]

3.140 Although these ‘inter-industry compacts’ do not always proceed as quickly as some parties would like, ‘privately negotiated arrangements will continue to emerge as new technologies make access, re-use, and distribution of content an inherent part of our culture and economy’.^[187]

3.141 The ALRC noted in the Discussion Paper^[188] that talks relating to curbing piracy through industry agreement with respect to ISP activities had faltered following the iiNet case,^[189] but raised the possibility that agreements and industry codes relating to ‘purposes’ in the Copyright Act could be provided for in the legislation. This approach is endorsed by the possibility that the government could ‘write into law an industry code on online piracy’^[190] as part of renewed government commitment to copyright issues.

3.142 In the educational context, the report commissioned by Screenrights from the Kernochan Center for Law, Media and the Arts of Columbia University^[191] usefully reviewed the principal US copyright exceptions relevant to educational uses and commented on the possibility for Australia of such a provision. An important aspect of the fair use environment in the US is the development of guidelines as to how it should operate. Universities Australia submitted that in determining whether a particular use amounts to fair use/fair dealing or requires a licence ‘universities would adopt guidelines or similar instructions to staff that assist in making such decisions’ as in comparable jurisdictions.^[192]

3.143 Copyright Agency submitted that the Attorney-General’s Department Guidelines for the ‘declared’ collecting societies could be reviewed and updated for example to make specific reference to the digital environment and new forms of content:

The current guidelines were developed for the education statutory licences, and have not been reviewed since being adopted in 1990. Similar guidelines could be developed for the government statutory licence, including its application to cultural institutions.^[193]

The ACCC also pointed to its role in drafting guidelines to which the Copyright Tribunal is required to have regard in determining licence conditions that are the subject of determinations by the Copyright Tribunal.^[194]

3.144 In their submission to this Inquiry, APRA/AMCOS urged that any such codes or guidelines ‘should be mandated by law, should take into account the views of both owners and users, and should be subject to the jurisdiction of the Copyright Tribunal’.^[195] Copyright Agency/Viscopy had a positive view of the role that Copyright Tribunal processes could play generally in streamlining issues identified in this Inquiry, including, for example:

reviewing the principles and processes for identifying uses of internet content that are excluded altogether as a factor in compensation negotiations, and assessing the value of those that are not excluded. If necessary, this can be assisted by the Copyright Tribunal.^[196]

3.145 Both statutory and voluntary licence schemes may be referred to the Copyright Tribunal, with amendments made in 2006 to expand this jurisdiction. The ACCC may be made a party to proceedings relating to voluntary licence schemes, in circumstances relating to failing to provide a licence or on unreasonable terms.^[197]

3.146 An important aspect of the discussion in the Kernochan Center report concerns the divergence of views on fair use and the length of time disputes take to resolve, despite the development of various sets of guidelines. However, the Standing Council on School Education and Early Childhood explicitly referred to the time and resources taken up in dealing with the inefficiencies of the current educational copyright licensing environment.^[198] The Council also stated that it is not correct to assume that the current environment creates greater certainty than an open-ended flexible exception.^[199]

3.147 However, ‘statements and codes of Best Practices created by and for various communities (including libraries and educators) have shown considerable potential as a tool to promote both understanding and relative predictive certainty’.^[200]

3.148 Universities Australia further submitted^[201] that ‘the potential for industry guidelines and codes of practice as an appropriate policy tool in copyright law, has been recognised for many years’ and pointed to a number of statements of best practice for fair use in the movie industry and by other rights holders, which have been lauded by the US Department of Commerce.^[202]

3.149 The education sector expressed a strong commitment to working to develop guidelines and codes of practice to inform the use of educational material.^[203]

3.150 In May 2013, Productivity Commission Chair, Mr Peter Harris, called for a policy-making structure that reinforces the expectation of change:

a mechanism under which continuous reform is invited … An integrated approach, where the voice of any one affected sector or region may not dominate; and where the breadth of necessary changes and the combined potential for economy-wide gains can be clearly set against any costs … a generic way forward. But clearly there is scope in this idea for a regular, wide-ranging review of productivity-oriented reforms … This is not a concept that can be created overnight.^[204]

Creation of this understanding can come through industry guidelines matched with consumer expectations.

3.151 The ALRC proposes that in the digital environment, a standard—a general rule based on principle—provides the flexibility to respond to technological change in a principled manner.^[205]

3.152 The ALRC’s recommendations are designed to allow copyright policy and practice to develop within a framework that is sensible, flexible and adaptable and allows for negotiation between parties, the development of industry understanding, the operation of market forces and the creation of certainty for business and confidence for consumers.