Reviews that have considered fair use

4.14 The Terms of Reference direct the ALRC to take into account recommendations from related reviews. A number of reviews, in Australia and in other jurisdictions, have considered the merits, or otherwise, of introducing fair use.

Recent international reviews

4.15 In the UK, the Hargreaves Review was specifically asked to investigate the benefits of a fair use exception and how these benefits might be achieved.[9] Professor Hargreaves found that the current state of European Union (EU) law meant that there would be considerable difficulties in introducing a fair use exception into the UK.[10] For this reason, Professor Hargreaves did not recommend fair use, ‘the big once and for all fix’,[11] but instead considered how the benefits of fair use could be achieved through other means.

4.16 The Copyright Review Committee (Ireland) also released a report in late October 2013. It took a different view from the Hargreaves Review, in that it considered that ‘there is scope under EU law for member states to adopt a fair use doctrine as a matter of national law’ and recommended the enactment of a fair use exception.[12]

4.17 The Ireland Review considered that a fair use exception should be enacted in that jurisdiction for two reasons. First, it considered that ‘it is simply not possible to predict the direction in which cloud computing and 3D printing are going to go, and it is therefore impossible to craft appropriate ex ante legal responses’.[13] Secondly, ‘it will send important signals about the nature of the Irish innovation ecosystem’ and ‘it will provide the Irish economy with a competitive advantage in Europe’.[14]

4.18 The fair use exception recommended in the Ireland Review differs from the US provision, and from the exception recommended in this Report, in that it provides for the existing exceptions to be regarded as examples of fair use and for the fairness of other uses to be assessed on the basis of up to eight separate factors.[15]

Australian reviews

4.19 This Inquiry is not the first Australian review to consider whether the Copyright Act should recognise the fair use of copyright material,[16] although some stakeholders consider that it has not been given ‘a sufficiently thorough examination in Australian law reform processes’ to date.[17]

The CLRC simplification review

4.20 In 1996, the Australian Government asked the Copyright Law Review Committee (CLRC), chaired by Professor Dennis Pearce, to consider how the Copyright Act could be simplified ‘to make it able to be understood by people needing to understand their rights and obligations’.[18]

4.21 In its 1998 report, the CLRC recommended the introduction of fair use—or at least, an open-ended fair dealing provision that is largely indistinguishable from fair use.

4.22 The CLRC recommended the consolidation of the fair dealing provisions into a single section[19] and the expansion of fair dealing to an ‘open-ended model’ that would not be confined to the ‘closed-list’ of fair dealing purposes.[20] The CLRC recommended that the non-exhaustive list of five fairness factors in s 40(2) of the Copyright Act specifically apply to all fair dealings.[21]

4.23 The CLRC recommended the following text for the consolidated statutory provision:

(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.[22]

4.24 The CLRC considered that its model was ‘sufficiently flexible to accommodate new uses that may emerge with future technological developments’ and that it also contained ‘enough detail to provide valuable guidance to both copyright owners and users’.[23] The model was described as a ‘neat and elegant one that will bring the existing multiplicity of exceptions into a coherent and orderly relationship’.[24] The Australian Government did not formally respond to the CLRC’s recommendations.

4.25 It is interesting to reflect on whether Australia might have been better placed to participate in the growth of the nascent digital economy, had the CLRC’s fair use exception been enacted in 1998.

Intellectual Property and Competition Review Committee

4.26 In September 2000 the Intellectual Property and Competition Review Committee, chaired by Henry Ergas (Ergas Committee), considered the CLRC’s recommendation for expansion of the fair dealing purposes. It reported that it did ‘not believe there is a case for removing the elements of the current Copyright Act, which define certain types of conduct as coming within the definition of fair dealing’.[25] In the context of reviewing copyright in terms of competition policy, the Ergas Committee considered that, at that time, the transaction costs of introducing fair use would outweigh the benefits.[26]

The Attorney-General’s Department’s Fair Use Review

4.27 The Australian Government Attorney-General’s Department’s Fair Use Review (AGD Fair Use Review) considered the CLRC and Ergas Committee’s respective relevant recommendations, as well as a recommendation that had been made by the Joint Standing Committee on Treaties (JSCOT) in considering whether the Australia–United States Free Trade Agreement (AUSFTA) would be in the national interest.

4.28 JSCOT had recommended replacing fair dealing with something closer to the US fair use doctrine ‘to counter the effects of the extension of copyright protection and to correct the legal anomaly of time shifting and space shifting’.[27]

4.29 A final report was not issued. However, after the Review, a number of reforms were enacted—notably exceptions for time and format shifting and fair dealing for parody and satire.

4.30 The Australian Government did not enact a fair use exception, stating that, in the public consultation phase, ‘no significant interest supported fully adopting the US approach’.[28]

[9] I Hargreaves, Digital Opportunity: A Review of Intellectual Property and Growth (2011), 101.

[10] Ibid, 46. Some scholars have challenged the view that a member state of the EU cannot introduce flexible copyright norms. See, eg, B Hugenholtz and M Senftleben, Fair Use in Europe: In Search of Flexibilities (2011). More recently, Professor Hargreaves has described fair use as ‘the backbone of a healthy Internet-economy ecosystem in the US’: I Hargreaves and B Hugenholtz, ‘Copyright Reform for Growth and Jobs: Modernising the European Copyright Framework’ (2013) 13 Lisbon Council Policy Brief 1.

[11] I Hargreaves, Digital Opportunity: A Review of Intellectual Property and Growth (2011), 52.

[12] Copyright Review Committee (Ireland), Department of Jobs, Enterprise and Innovation, Modernising Copyright (2013), 91.

[13] Ibid, 93.

[14] Ibid. It was also considered beneficial because it would ‘give Irish law a leadership position in EU copyright debates’.

[15] Ibid, 11, 89–97.

[16] For an overview of the history of the review, see M Wyburn, ‘Higher Education and Fair Use: A Wider Copyright Defence in the Face of the Australia—United States Free Trade Agreement Changes’ (2006) 17 Australian Intellectual Property Journal 181.

[17] R Burrell, M Handler, E Hudson, and K Weatherall, Submission 278.

[18] Copyright Law Review Committee, Simplification of the Copyright Act 1968. Part 1: Exceptions to the Exclusive Rights of Copyright Owners (1998), [1.03].

[19] However, the CLRC recommended that the quantitative test be included in ‘a stand-alone provision separate from the new fair dealing provision’: Ibid, [6.10].

[20] Ibid, [2.01]–[2.03].

[21] See also Ibid, [2.04], [6.36]–[6.44].

[22] Ibid, [6.143].

[23] Ibid, [6.08].

[24] S Ricketson, ‘Simplifying Copyright Law: Proposals from Down Under’ (1999) 21(11) European Intellectual Property Review 537, 549.

[25] Intellectual Property and Competition Review Committee, Review of Intellectual Property Legislation under the Competition Principles Agreement (2000), 15.

[26] Ibid, 129.

[27] The Joint Standing Committee on Treaties—Parliament of Australia, Report 61: The Australia-United States Free Trade Agreement (2004), Rec 17.

[28] Explanatory Memorandum, Copyright Amendment Bill 2006 (Cth), 10. However, it should be noted that a number of submissions—presumably defined as coming before ‘the public consultation phase’—did argue in favour of a broad, flexible exception. Further, ‘personal consumers’ had supported an open-ended exception: Explanatory Memorandum, Copyright Amendment Bill 2006 (Cth), 12.