7.1 This chapter considers ‘third party’ uses of copyright material—that is, the unlicensed use of copyright material by third parties to deliver a service, sometimes for profit, in circumstances where the same use by the ‘end user’ would be permitted under a licence or unremunerated exception.

7.2 The ALRC concludes that such uses should be considered under fair use or the new fair dealing exception. These fairness exceptions are well suited to judge whether third party copying and other uses should be held to infringe copyright.

7.3 Using copyright material might sometimes be considered more likely to be fair when a third party merely facilitates a permitted use. However, other factors, such as whether the use is transformative or harms the rights holder’s market, will usually be more important.

7.4 Despite objections to commercial organisations ‘free riding’ on the investment and creative effort of others, in the ALRC’s view, if a use is for a different expressive purpose than the original and does not harm a rights holder’s market, then the use should often be fair, even if it is commercial. Such an approach to copyright exceptions better serves an innovative digital economy.