234. Australia’s copyright legislation has long provided for ‘fair dealing’. Australian legislation first used the expression ‘fairly dealing’ in its Copyright Act 1905 (Cth)—the first common law country to do so. Subsequent Acts—the Copyright Act 1912 (Cth) which declared the Copyright Act 1911 (Imp) to be in force in Australia and the current Copyright Act which replaced the 1912 Act—use the term ‘fair dealing’. These latter two Acts, including amendments to the current Copyright Act, have instituted a list of very specific exceptions under the ‘fair dealing’ rubric.
235. Fair dealing limits the boundaries of copyright and, accordingly, the fair dealing exceptions are not simply defences to infringement.
236. The Copyright Act does not define a ‘fair dealing’. Rather, specific fair dealing exceptions exist for the purposes of:
- research or study;
- criticism or review;
- parody or satire;
- reporting news; and
- a legal practitioner, registered patent attorney or registered trade marks attorney giving professional advice.
237. Not all of these exceptions are available for all types of copyright material. The Copyright Act provides that ‘fair dealings’ for these specified purposes may be made with the following copyright material:
- literary, dramatic, musical or artistic works;
- adaptations of literary, dramatic or musical works; and
- audio-visual items—defined as sound recordings, cinematograph films, sound broadcasts or television broadcasts.
238. Where the use of a ‘substantial part’ or more of the work, adaptation, or audio-visual item constitutes a ‘fair dealing’, there is no infringement of the copyright in that specific copyright material. Further, in the case of an audio-visual item, there is no infringement of the copyright in any work or other audio-visual item that is included in that audio-visual item.
239. Additionally, the Copyright Act provides that certain direct or indirect sound recordings or cinematograph films of performances, which constitute fair dealing for specified purposes, are outside the scheme affording protection to performers in their live performances. That is, the use of those recordings and films of the performances are permitted as exceptions.
When will a use be a ‘fair dealing’?
240. As the Australian Copyright Council explains:
The first step in determining whether a fair dealing defence applies is to look at the purpose; the use must be for one of the … [specific] purposes set out in the Copyright Act. The second step is to determine whether the use is fair.
241. Whether a particular use is fair will depend on the circumstances of the case.
Requirement to provide sufficient acknowledgement
242. The fair dealing provisions for the purpose of criticism or review, and those for the purpose of, or associated with, the reporting of news in a newspaper, magazine or similar periodical contain an additional requirement for a ‘sufficient acknowledgment’ of the work or audio-visual item.
243. The fair dealing exception for the purpose of research or study with respect to works and adaptations contains a quantitative test that deems the use of certain quantities of copyright material to be fair. The concept of ‘reasonable portion’ is fixed by reference to chapters or 10% of the number of pages or number of words.
General guidance as to fairness
244. The fair dealing exceptions for the purpose of research or study and s 248A(1A) (indirect sound recordings of performances) are the only exceptions which list matters to which regard is to be had in determining whether the use constitutes a fair dealing. These matters include, but are not limited to:
the purpose and character of the dealing or recording;
the nature of the work, adaptation, audio-visual item or performance;
the possibility of obtaining the work, adaptation, audio-visual item or an authorised recording of the performance within a reasonable time at an ordinary commercial price;
the effect of the dealing or recording upon the potential market for, or value of, the work, adaptation, audio-visual item or authorised recordings of the performance; and
in a case where part only of the work, adaptation, audio-visual item or performance is reproduced, copied or recorded—the amount and substantiality of the part copied, taken or recorded in relation to the whole work, adaptation, item or performance.
245. The 1976 report of the Copyright Law Committee (the Franki Committee) on reprographic reproduction had recommended that this list of matters—with respect to works and adaptations—be included in s 40. The matters listed are based to a large extent on principles derived from the case law on fair dealing.
246. In order to assess the fairness of a use that is made for one of the other fair dealing purposes, it is necessary to consider the case law. The CLRC suggested that it is ‘reasonable to assume’ that the matters listed ‘are also relevant in determining the fairness of a dealing for purposes other than research or study’. This is because the matters in s 40(2) were derived from principles in the case law and because those principles were not limited to a specific purpose.
247. The list of matters in ss 40(2) and 103C(2) are not the only relevant matters for assessment of the fairness in any of the fair dealing exceptions as these are inclusive rather than exclusive lists. The Franki committee observed that it is for the courts to decide whether particular uses of copyright material constitute ‘fair dealing’ and it was of the opinion that it would be ‘quite impracticable’ to attempt to remove this duty entirely.
To whom do the exceptions apply?
248. Unlike some other exceptions in the Act and the statutory licences, the fair dealing exceptions appear on their face to be available to any user of copyright material provided that their particular use—or ‘dealing’—falls within the bounds of one of those exceptions. That is, the dealing is for one of the permitted purposes and is ‘fair’. However, the relationship between the fair dealing exceptions and the statutory licences—particularly whether the former can be relied upon where provision is made for the latter—is a contentious issue for copyright rights holders and users.
Options for reform
249. The ALRC’s Terms of Reference direct it to inquire into whether existing exceptions such as the fair dealing exceptions are adequate and appropriate in the digital environment.
250. One issue is that the use of ‘number of words’ in the test to determine a reasonable portion for the purpose of research or study may be a problematic unit of measurement. Professor Sam Ricketson and Chris Creswell have commented:
While it is usually possible to ascertain quite quickly the number of pages in a hard copy version of work, counting the number of words is far more difficult and time consuming, if not completely unrealistic. With a work in electronic form, this can, of course, be swiftly executed if there is a word count mechanism … But for this to be done, it will normally be necessary for the whole work to be downloaded into the RAM of the user’s computer, which will mean that the whole of the work will be copied electronically before it is possible to work out how much (word by word) can be lawfully copied under s 40(5).
251. The ALRC is interested in comment about what problems there are with the fair dealing exceptions in the digital environment.
252. In 1996 the Australian Government asked the CLRC to inquire into and report on how the Copyright Act could be simplified ‘to make it able to be understood by people needing to understand their rights and obligations’. In 1998 the CLRC recommended, among other things, a number of changes to the fair dealing provisions. The CLRC recommended that the Act be simplified by:
consolidating the current fair dealing provisions (ss 40, 41, 42, 43(2), 103A, 103B and 103C) into a single section;
absorbing the provisions relating to the acts done for the purpose of professional advice in relation to subject matter other than works (ss 104(b) and 104(c)) within fair dealing;
removing the fair dealing provisions that specifically apply to external students (ss 40(1A) and 40(1B));
removing the provisions that require sufficient acknowledgment in relation to fair dealings for the purpose of reporting news (ss 42(1)(a) and 103B(1)(a)); and
adopting a modified quantitative test (s 40(3)).
253. The main part of the CLRC’s proposed consolidated statutory provision was as follows:
(1) Subject to this section, a fair dealing with any copyright material for any purpose, including the purposes of research, study, criticism, review, reporting of news, and professional advice by a legal practitioner, patent attorney or trade mark attorney, is not an infringement of copyright.
(2) In determining whether in any particular case a dealing is a fair dealing, regard shall be had to the following:
(a) the purpose and character of the dealing;
(b) the nature of the copyright material;
(c) the possibility of obtaining the copyright material within a reasonable time at an ordinary commercial price;
(d) the effect of the dealing upon the potential market for, or value of, the copyright material;
(e) in a case where part only of the copyright material is dealt with—the amount and substantiality of the part dealt with, considered in relation to the whole of the copyright material.
254. The text of this draft provision addresses the first of the two bullet points listed above. The CLRC recommended that the non-exclusive list of factors in s 40(2) specifically apply to all fair dealings. It considered that ‘this should not make a major change to the current operation of fair dealing’.
255. A key aspect of the proposed reform was the expansion of the fair dealing purposes to an open-ended model. This meant that while the exclusive purposes were to be specified in the provision (in the first sub-section extracted above), it was not to be confined to those purposes. This aspect of the CLRC’s model is addressed in the section ‘Fair use’.
256. The Australian Government has not formally responded to the recommendations made in this CLRC report. In its Fair Use Review, the Attorney-General’s Department noted that the CLRC’s recommendations ‘need to be examined against subsequent developments, including the AUSFTA obligations and implementing legislation’.
257. The Fair Use Review asked whether the Copyright Act should be amended to consolidate the fair dealing exceptions on the model recommended by the CLRC.
258. The Government did not issue a final report of the Fair Use Review. However, specific amendments to the Copyright Act were introduced. The Copyright Amendment Act 2006 (Cth) changed the fair dealing exceptions by:
- introducing new fair dealing exceptions for the purpose of parody or satire; and
- repealing the former s 40(3) and (4) and substituting new s 40(3)–(8) in order to improve clarity and certainty with respect to the quantitative test in s 40.
259. Notwithstanding this change, the fair dealing exceptions remain complex. For example, there is still validity in the CLRC’s comment that
[m]uch of the present complexity in the fair dealing provisions … is due to the fact that they operate on the basis of a particular technology or in relation to dealings with copyright materials in a particular material form.
260. The ALRC is interested in hearing views on whether the fair dealing exceptions would benefit from simplification—including consolidation of some aspects and repeal of provisions which are considered unnecessary. For example, Ricketson and Creswell have stated that it is ‘unclear what s 40(1A) adds to what is already allowed under s 40(1), in the absence of any deeming effect’.
261. The ALRC invites comments on how the fair dealing exceptions might be usefully simplified or made more coherent.
262. There have been suggestions that art 10(1) of the Berne Convention—which imposes a mandatory obligation to provide a specific exception for quotation—could be usefully employed in Australia as the basis for an exception for non-commercial transformative use; an exception permitting the quotation of copyright works in commercial works; or an exception for fair dealing for the purpose of quotation. Article 10(1) provides:
It shall be permissible to make quotations from a work which has already been lawfully made available to the public, provided that their making is compatible with fair practice, and their extent does not exceed that justified by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries.
263. The ‘quotation right’ provided for in the Berne Convention is not limited to text-based copyright material. Rather, the word ‘work’ is used so presumably it encompasses all the types of works that are listed in art 2. That is, literary and artistic works (including, for example, dramatic works, choreographic works, cinematographic works and photographic works), derivative works (including translations, adaptations and arrangements of music) and collections of works such as anthologies and encyclopaedias.
264. Ricketson has commented:
Although article 10(1) does not define ‘quotation’, this usually means the taking of some part of a greater whole—a group of words from a text or a speech, a musical passage or visual image taken from a piece of music or a work of art—where the taking is done by someone other than the originator of the work. …
No limitation is placed on the amount that may be quoted under article 10(1), although as suggested above, ‘quotation’ may suggest that the thing quoted will always be a part of a greater whole rather than the whole itself.
265. The text of art 10(1) makes it clear that a quotation must meet three requirements to be permitted under the provision.
266. The litigation over whether EMI’s recordings of the Men at Work song ‘Down Under’ had infringed the copyright in ‘Kookaburra Sits in the Old Gum Tree’ has generated significant interest in Australia. In the words of one journalist:
The catchy hit Down Under turned 1980s band Men at Work into global superstars. But three decades on, the legal battle over the song’s famous flute riff would give the rock’n’roll fairytale a bitter end.
267. On appeal, Emmett J expressed his ‘disquiet’ in finding copyright infringement in the circumstances of the case. He stated:
The better view of the taking of the melody from Kookaburra is not that the melody was taken … in order to save effort on the part of the composer of Down Under, by appropriating the results of Ms Sinclair’s efforts. Rather, the quotation or reproduction of the melody of Kookaburra appears by way of tribute to the iconicity of Kookaburra, and as one of a number of references made in Down Under to Australian icons.
268. The ALRC is interested in comments about whether there should be a fair dealing exception for the purpose of quotation or any other specific fair dealing exceptions.
Question 45. The Copyright Act 1968 (Cth) provides fair dealing exceptions for the purposes of:
(a) research or study;
(b) criticism or review;
(c) parody or satire;
(d) reporting news; and
(e) a legal practitioner, registered patent attorney or registered trade marks attorney giving professional advice.
What problems, if any, are there with any of these fair dealing exceptions in the digital environment?
Question 46. How could the fair dealing exceptions be usefully simplified?
Question 47. Should the Copyright Act 1968 (Cth) provide for any other specific fair dealing exceptions? For example, should there be a fair dealing exception for the purpose of quotation, and if so, how should it apply?
 M De Zwart, ‘A Historical Analysis of the Birth of Fair Dealing and Fair Use: Lessons for the Digital Age’ (2007) 1 Intellectual Property Quarterly 60, 89.
 Thomson Reuters, The Law of Intellectual Property: Copyright, Designs and Confidential Information, [3.360].
 The most recent amendment to note in this regard is the Copyright Amendment Act 2006 (Cth) which introduced fair dealing exceptions for the purpose of parody or satire.
 Copyright Law Review Committee, Simplification of the Copyright Act 1968: Part 1: Exceptions to the Exclusive Rights of Copyright Owners (1998), [4.01].
Copyright Act 1968 (Cth) ss 40(1), 103C(1).
 Ibid ss 41, 103A.
 Ibid ss 41A, 103AA.
 Ibid ss 42, 103B.
 Ibid s 43(2). Note s 104(c), which could be seen as the equivalent provision for subject-matter other than works, does not in fact use the term ‘fair dealing’. Similarly, ss 43(1), 104(a) (anything done for the purposes of a judicial proceeding or a report of a judicial proceeding) and 104(b) (someone seeking professional advice from a legal practitioner, registered patent attorney or registered trade marks attorney) do not use the term ‘fair dealing’. All of these exceptions are broader than the fair dealing exceptions.
 Ibid s 40(1) (research or study), s 41 (criticism or review), s 41A (parody or satire), s 42 (reporting news), s 43(2) (the giving of professional advice by certain individuals).
 Ibid s 40(1) (research or study), s41 (criticism or review), s 41A (parody or satire), s 42 (reporting news).
 Ibid s 103C(1) (research or study), s 103A (criticism or review), s 103AA (parody or satire), s 103B (reporting news).
 Ibid s 100A.
 Ibid s 14.
 As Professor Sam Ricketson and Chris Creswell have observed, ‘acts done in relation to insubstantial parts do not constitute infringement of copyright and the defences of fair dealing only come into operation in relation to substantial parts or more’: Thomson Reuters, The Law of Intellectual Property: Copyright, Designs and Confidential Information, [11.15].
Copyright Act 1968 (Cth) s 103A (criticism or review), s 103AA (parody or satire), s 103B (reporting news), s 103C(1) (research or study).
 Such recordings and films come within the definition of ‘exempt recording’. Ibid s 248A(1)(aa), (f), (fa), (g). See also s 248A(1A) which contains a list of matters—which is in largely the same form as the factors in ss 40(2) and 103C(2)—which must be regarded when determining whether a recording is a fair dealing for the purpose of research or study under s 248A(1)(aa). One important difference is that ss 40(2) and 103C(2) are stated to be inclusive lists whereas the language of s 248A(1A) is not so clear.
 Australian Copyright Council, Fair Dealing in the Digital Age: A Discussion Paper (1998), 20.
Copyright Act 1968 (Cth) ss 41 and 103A (criticism or review); ss 42(1)(a) and 103B(1)(a) (reporting news).
 See Ibid s 40(3)–(8).
 Copyright Law Committee, Report on Reprographic Reproduction (1976) (Franki Report), [2.60]. One possible reason why the Franki report did not recommend that these factors specifically apply to the other fair dealing exceptions may be due to the fact that the Franki Report was confined to investigating reprographic reproduction: M Sainsbury, ‘Parody, Satire and Copyright Infringement: The Latest Addition to Australian Fair Dealing Law’ (2007) 12 Media and Arts Law Review 292, 306.
 Thomson Reuters, The Law of Intellectual Property: Copyright, Designs and Confidential Information [11.35]; Copyright Law Review Committee, Simplification of the Copyright Act 1968: Part 1: Exceptions to the Exclusive Rights of Copyright Owners (1998), [4.09].
 Thomson Reuters, The Law of Intellectual Property: Copyright, Designs and Confidential Information, [11.15].
 Copyright Law Review Committee, Simplification of the Copyright Act 1968: Part 1: Exceptions to the Exclusive Rights of Copyright Owners (1998), [4.09]. Later, at [6.36], the CLRC also referred to comments to similar effect made by Professors Ricketson and Lahore in each of their loose-leaf services.
 Ibid, [4.09].
 Other factors may also be relevant. For example, Michael Handler and David Rolph have suggested seven factors which may assist a court in determining the fairness of a particular dealing; not all will be relevant in every case. M Handler and D Rolph, ‘’A Real Pea Souper’: The Panel Case and the Development of the Fair Dealing Defences to Copyright Infringement in Australia’ (2003) 27 Melbourne University Law Review 381, 418.
 Copyright Law Committee, Report on Reprographic Reproduction (1976), [2.59].
 For example, see Copyright Law Review Committee, Simplification of the Copyright Act 1968: Part 1: Exceptions to the Exclusive Rights of Copyright Owners (1998), [6.53]– [6.63].
 Thomson Reuters, The Law of Intellectual Property: Copyright, Designs and Confidential Information, [11.43].
 Copyright Law Review Committee, Simplification of the Copyright Act 1968: Part 1: Exceptions to the Exclusive Rights of Copyright Owners (1998), [1.03] citing paragraph 1(a) of its Terms of Reference.
 Ibid, [2.01]–[2.26].
 Ibid, [2.01].
 Ibid, [6.143].
 With respect to the substance of the other points see Ibid, [6.106]–[6.110] (removing certain provisions which are specifically applicable to external students); [6.118]–[6.126] (removing the requirements for sufficient acknowledgment); and [6.45]–[6.86] (a modified quantitative test).
 See also Ibid, [2.04], [6.36]–[6.44].
 Ibid, [6.36].
 Ibid, [2.03].
 Australian Government Attorney-General’s Department, Fair Use and Other Copyright Exceptions: An examination of fair use, fair dealing and other exceptions in the digital age, Issues Paper (2005), [6.8].
 Ibid, [6.8].
Copyright Amendment Act 2006 (Cth) sch 6 pt 3 items 9A and 9B.
 Ibid sch 6 pt 4.
 Explanatory Memorandum, Copyright Amendment Bill 2006 (Cth), [6.64]; Supplementary Explanatory Memorandum, Copyright Amendment Bill 2006 (Cth), –.
 Copyright Law Review Committee, Simplification of the Copyright Act 1968: Part 1: Exceptions to the Exclusive Rights of Copyright Owners (1998), [6.01].
 Recently the High Court of Australia observed that another provision—not a fair dealing exception—‘appears to provide protection where none is required’ and was ‘seemingly enacted from an abundance of caution’. Roadshow Films Pty Ltd v iinet Ltd  16 HCA,  (French CJ, Crennan and Kiefel JJ) and  (Gummow and Hayne JJ) referring to Copyright Act 1968 (Cth) s 112E.
 Thomson Reuters, The Law of Intellectual Property: Copyright, Designs and Confidential Information, [11.32].
 Copyright Council Expert Group, Directions in Copyright Reform in Australia (2011), 2.
 E Adeney, ‘Fair Dealing for the Purposes of Quotation: What is a Quotation Exception and Should Australia Have One?’ (Paper presented at Australasian Intellectual Property Academics Conference, Adelaide, 13–14 July 2012).
Berne Convention for the Protection of Literary and Artistic Works (Paris Act), 24 July 1971,  ATS 5 (entered into force on 15 December 1972).
 S Ricketson and J Ginsburg, International Copyright and Neighbouring Rights: The Berne Convention and Beyond (2nd ed, 2006) Vol I, 783, 788–9. Ricketson has noted that due to the mandatory character of the exception, ‘article 10(1) is the one Berne exception that comes closest to embodying a “user right” to make quotations’.
 Ibid, 788.
 As Professor Ricketson has summarised, ‘First, the work in question must have been “lawfully made available to the public”. … Second, the making of the quotation must be “compatible with fair practice”. … The third condition is that the extent of the quotation must “not exceed that justified by the purpose”.’ Ibid, 785–6.
 For example, it was the subject of a feature article in the Sydney Morning Herald Good Weekend. See D Leser, ‘The Biggest Hit’, The Sydney Morning Herald (online), 23 July 2012, <http://www.smh.com.au/entertainment/music/the-biggest-hit-20120716-224×7.html>.
EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd (2011) 191 FCR 444, .
 Ibid, .