Fair use better aligns with reasonable consumer expectations

4.99 Fair use will mean that ordinary Australians are not infringing copyright when they use copyright material in entirely harmless ways that in no way damage—and may even benefit—the market of rights holders. This aligns better with consumer expectations. The public is more likely to understand fair use than the existing collection of complex specific exceptions; the exception will seem more reasonable; and this may even increase respect for and compliance with copyright laws more broadly.[130]

4.100 The Hargreaves Review identified the ‘growing mismatch between what is allowed under copyright exceptions, and the reasonable expectations and behaviour of most people’ as a ‘significant problem’.[131] A number of stakeholders in this Inquiry held similar views.[132] The mismatch was said to be undermining the copyright system and bringing the law into disrepute.[133]

4.101 More recently, the Copyright Review Committee (Ireland) commented that

Accommodating basic and genuine user expectations alongside the legitimate interests of rights owners makes copyright law stable and sustainable, thereby contributing generally to cultural and economic development and innovation.[134]

4.102 Some submissions gave examples of common practices which run foul of the law but which consumers may mistakenly consider to be lawful and which, arguably, are unlikely to harm copyright holders. For example, consumers expect to be able to post a photo of goods on eBay in order to sell them. However, eBay stated that those using its services may infringe copyright when the photograph includes an artistic work on the cover of a book or a garment bearing an artwork.[135] In its view, a copyright owner does not suffer loss or damage in such a case. It submitted that within its business, and ‘a wide range of markets’, a fair use exception would provide ‘an opportunity to prevent the occurrence of repeated technical infringement of copyright’.[136]

4.103 Similarly, Kay & Hughes submitted:

the use of images of artistic works to advertise the resale of [those] artworks on the secondary market is, our clients would submit, exactly the kind of non-competing, good-faith, legitimate use of copyright that statutory exceptions (including fair use) are designed to protect.[137]

4.104 The Viscopy Board observed that Viscopy has offered licences for ‘many years’ to cover the sort of use referred to by eBay.[138] However, some stakeholders view arrangements of this type as ‘rent seeking’ or similar.[139] Speaking in the context of consumer technologies and licensing, Choice stated that ‘the right of creators to be commercially rewarded for their works is not the same as a right to endless commercial exploitation of a work’:

Just because a creator can charge a consumer to copy a CD to a smartphone doesn’t mean that they have the irrevocable right to do so. Restricting a practice such as this would not undermine the market for the work, as a consumer would have to buy it in the first instance.[140]

4.105 This is not an argument for legalising piracy. Choice noted that infringing activities, such as piracy, create the least confusion for Australian consumers. That is, consumers do not generally expect the law to allow free copying of music, television and movies. By contrast, the survey results suggest that there was greater confusion about activities which are currently illegal but which could potentially become legal under a fair use exception—for example, copying a (legally acquired) video to a personally owned device. Choice observed that ‘the large number of consumers that do not know, or incorrectly identify, the legality of uses which are currently illegal in Australia is evidence of our out-dated and restrictive copyright laws’.[141]

4.106 Some stakeholders raised concerns that introducing fair use would serve to normalise and increase infringing conduct.[142] Like the claim that fair use would improve respect for copyright law, these matters are difficult to measure or test. The ALRC expects that the introduction of a fair use test would be accompanied by efforts to educate consumers about fair use. Public education is easier when the law is coherent, internally consistent and reasonable.[143]

4.107 The ALRC agrees that consumer expectations are sometimes unreasonable, or based on a poor understanding of copyright law.[144] Fair use does not align with the expectations of those consumers who want to get their music, television, and movies for free.

4.108 Some stakeholders noted that the market can, and is, providing services that meet legitimate consumer expectations.[145] For example, Foxtel submitted that it was already offering its customers access to copyright material on flexible terms that meet its customers’ reasonable expectations.[146] As noted earlier, the effect of a use on a market is a highly significant factor in determining fair use. Content providers can have a substantial effect on the scope of fair use, by responding to market demand.