10.1 The Terms of Reference ask the ALRC to consider whether new exceptions under the Copyright Act 1968 (Cth) should be introduced to allow ‘transformative, innovative and collaborative use of copyright materials to create and deliver new products and services of public benefit’. This chapter considers whether there should be a new exception specifically to allow ‘transformative’ use of copyright materials, and discusses the possible scope and rationales for such an exception.

10.2 The ALRC concludes that transformative use of copyright material should be considered under the fair use exception proposed in Chapter 4, rather than under a new specific exception, in determining whether copyright is infringed. The proposed fair use exception can be expected to allow individuals to use copyright materials more freely in some transformative uses.

10.3 Relying on a fair use exception to deal with uses that may be characterised as transformative, rather than introducing a specific exception, is preferable in view of the difficulties involved in framing such an exception. These difficulties include defining whether a use is transformative, and determining the extent to which commercial uses of copyright materials should be covered. For similar reasons, the ALRC does not propose that any new specific transformative use exception should be introduced, even if a fair use exception is not.

10.4 The chapter also considers suggestions that the Copyright Act should provide a specific exception for quotation of copyright materials. The ALRC concludes that the use of copyright material for the purposes of quotation should also be considered under the fair use exception, rather than under a specific exception. Further, ‘quotation’ should be one of the illustrative purposes listed in the fair use exception.

10.5 If fair use is not enacted, the ALRC proposes that the Copyright Act should be amended to provide for a new exception for quotation. The Act should provide that in determining whether a dealing for quotation is fair, regard should be given to the fairness factors.