Fairness factors

6.29 The ALRC recommends that the new fair dealing exception should explicitly state that the fairness factors must be considered when determining whether a given use is fair. These are the same fairness factors that the ALRC recommends should appear in the fair use exception.[7] The factors are:

(1) the purpose and character of the use;

(2) the nature of the copyright material;

(3) the amount and substantiality of the part used; and

(4) the effect of the use upon the potential market for, or value of, the copyright material.

6.30 Currently, only the fair dealing exceptions for research or study explicitly include fairness factors. However, it is likely that these same factors should, as a question of law, also be considered when applying the other fair dealing exceptions.[8]

6.31 Some have suggested that courts have on occasion given insufficient regard to the fairness factors, when applying Australia’s fair dealing exceptions.[9] Including the factors in the new fair dealing exception should ensure that the factors are considered in future cases. This should not affect the scope of the existing fair dealing exceptions, because they already impliedly require the fairness factors to be considered.

6.32 Robert Xavier considered there may be a problem with requiring the fairness factors to be considered when applying fair dealing exceptions:

in fair use the presence of any of the fair dealing purposes would weigh the first factor in favour of fairness. In the proposed fair dealing exceptions, it seems that the fairness factors could only be considered once the purpose of the dealing had already been identified as one of the specified purposes—suggesting either that the first factor must always weigh in favour of fairness (making it somewhat superfluous, so I’m not sure a court would accept this interpretation), or that it might sometimes weigh against fairness even if the threshold test of purpose had already been passed.[10]

6.33 In the ALRC’s view, the function of, and relationship between, the first fairness factor and the listed purposes should be the same, under both fair use and fair dealing. William Patry has written that the role of the preamble to the US fair use provision, which contains the illustrative purposes, ‘may best be understood by appreciating the preamble in relation to the first factor, the purpose and character of the use’.[11] In this respect, Patry writes that:

while the preamble directs the courts to determine whether the use is of a type potentially qualifying as a fair use, the first factor directs the courts to examine whether the particular use made of copyrighted material was necessary to the asserted purpose of criticism, comment, etc, [ie, one of the illustrative purposes] or instead, whether defendant’s purpose could have been accomplished by taking unprotectable material such as facts, ideas, or less expression. … Courts must therefore look not only at the justification for defendant’s work as a whole (as the preamble directs) but also at the justification for each use within the whole (as the first factor directs).[12]

6.34 Patry then quotes Judge Pierre Leval on this matter:

In analysing a fair use defense, it is not sufficient simply to conclude whether or not justification exists. The question remains how powerful, or persuasive, is the justification, because the court must weigh the strength of the secondary user’s justification against factors favoring the copyright owner.[13]

6.35 The new fair dealing exception should be approached in this same way. The first step would be to consider whether the use in question comes within one of the listed purposes. This would be to test whether justification exists. The second step would be to consider whether the use was fair, having regard to the fairness factors. Even if justification exists, the first factor may not necessarily favour a finding of fairness, for example because the particular use in question was not at all transformative.

6.36 For example, photocopying an entire textbook for 30 students in a university class may be an educational use and so pass the first step in the new fair dealing exception. But because the use is not transformative, and because the university harmed the publisher’s market by not buying additional copies of the textbook, the use would be unfair and would not pass the second step. In this example, when considering the first fairness factor, the court may note that the use was for education, favouring a finding of fair dealing, but this would be unpersuasive, considering the photocopies are not transformative and act as an unfair substitute for the original textbook.