Statutory licences not compulsory for users

8.71 Educational institutions and governments should not be required to rely on the statutory licences. Statutory licences were intended to be compulsory for rights holders, not for licensees. The Copyright Act should be amended to make this clear.

8.72 Arguably, the statutory licences are already, as a matter of law, ‘voluntary for users’. Some stakeholders pointed out that educational institutions and governments can choose not to rely on the licences by not using copyright material when such uses are covered by a licence.[82] Screenrights submitted that the education sector has the option ‘simply not to take out a licence’.[83]

8.73 However, others suggested that, in practice, educational institutions and governments have no choice about whether to use certain copyright material, and therefore must rely on the statutory licences. Some also submitted that collecting societies have not offered educational institutions and governments any other type of collective licence, and so the only licences these users have available to them are the statutory licences.

8.74 Some stakeholders submitted that the statutory licences were becoming ‘increasingly irrelevant’, and could therefore be repealed. Although the ALRC does not recommend the licences be repealed at this time, it should be made clear in the Act that educational institutions and governments are not required to rely on the statutory licences, if they choose not to. They should instead be free to seek to obtain a licence for the use directly from rights holders, or to negotiate alternative licences with collecting societies outside the terms of the statute.[84]

8.75 Some have suggested that direct licences are meeting almost all the needs of some licensees, removing much of the need for the statutory licences. Most of the copyright material that is licensed to educational institutions and governments is licensed directly, rather than through a collecting society. Often, these licences include certain limited rights to copy and otherwise use the material. Digital technologies are making such licences more comprehensive and flexible, for example, by better monitoring usage.

8.76 CAG Schools submitted that in 2012, the Australian school sector spent over $665 million buying educational resources, in addition to over $80 million in licensing fees to collecting societies.[85] Universities Australia submitted that the ‘vast majority of educational content used for teaching purposes in Australian universities is purchased directly via commercial licences’.[86] NSW Government departments spend millions of dollars annually on licences obtained directly from publishers, and the range of material covered by the government statutory licence is diminishing:

Books, journals and similar material are increasingly delivered online under agreements that include copyright licences, as noted above. Digital technology and the advance of ebooks have changed the shape of the publishing industry, and major publishers have incorporated many of the smaller publishing houses. The combined effect is that Governments increasingly deal directly with publishers, and those agreements now cover most of the External Material used by Government staff.[87]

8.77 If a government or educational institution does not need a blanket licence—if they can obtain licences for what they need directly from publishers—then they should not be compelled to rely on a statutory licence.[88]

8.78 Educational institutions and governments should also seek, and collecting societies should offer, licensing solutions outside the terms of the statutory licence, if voluntary licences are indeed more flexible and useful than statutory licences. Later in this chapter the ALRC recommends the statutory licences be made less prescriptive and more flexible. But some of these benefits may not need to wait for legislative change. Collecting societies should be able to offer flexible commercial licences to educational institutions and governments. Such licences may not need to have onerous survey requirements, or seek payment for purely incidental copying. The ACCC might encourage collecting societies to offer such alternative licences.

8.79 Although the ALRC recommends legislative amendment to ensure the Act is clear that collecting societies can offer licences to educational institutions and governments outside the terms of the statute, the ALRC encourages the parties to seek to make such agreements now. It is clear from submissions to this Inquiry that the educational institutions and governments are unhappy with the current terms of the statutory licences.

8.80 In some limited circumstances, it may also be appropriate for educational institutions and governments to ‘risk manage’ their copyright responsibilities. This would involve using copyright material without permission, while setting aside funds should a rights owner seek payment. Such an approach may be appropriate where:

  • information about the use is open and public;

  • the use is not one for which rights holders traditionally seek remuneration;

  • obtaining permission from all rights holders (for example, for a mass digitisation project) is impossible or impractical; and

  • if a rights holder does seek remuneration, the means for obtaining remuneration are readily available.

8.81 These may be government uses that are in the margins of fair use, or otherwise not clearly covered by an unremunerated exception, and not traditionally offered for licence. The existence of the statutory licences should not preclude educational institutions and governments from managing their copyright liabilities in such ways.[89] The downside to this approach for educational institutions and governments will be that they do not avail themselves of the protection of the statutory licence, and therefore expose themselves to potential liability for copyright infringement.

Recommendation 8–2 The Copyright Act should be amended to clarify that the statutory licences in pts VA, VB and VII div 2 do not apply to a use of copyright material where a government, educational institution, or an institution assisting people with disability, instead relies on an alternative licence, whether obtained directly from rights holders or from a collecting society.

[82] ARIA, Submission 731: ‘As it is our understanding that the statutory arrangements are not compulsory for users, and co-exist with any other commercial arrangements the educational institution wishes to negotiate.’

[83] Screenrights, Submission 646.

[84] As discussed above, they should also be able to rely on unremunerated exceptions, if the exceptions apply.

[85] Copyright Advisory Group—Schools, Submission 707: ‘To put this in context, the amount spent by schools and others on purchasing educational content is more than seven times the amount Screen Australia received from the government in 2012 and more than three times the amount the Australia Council for the Arts received from the government in 2012.’

[86] Universities Australia, Submission 754. For example, in 2011, ‘university libraries spent $256.7 million, the majority of which was on electronic resources (ie, journals and ebooks). It can be expected that this direct spending will increase over time, especially as a result of the increasing penetration of e-books and their associated add-ons.’

[87] NSW Government, Submission 294.

[88] ABC, Submission 775: ‘Availability of direct licensing: If it is the case that government users must only licence through the statutory licensing scheme in Part VII of Division 2, then the ABC supports such users being given the freedom to licence outside that scheme, as it understands is the case for educational users.’

[89] The NSW Government submitted that it should not be required under the Copyright Act to enter licensing arrangements with collecting societies, but rather, governments should be able to make a ‘commercial decision on how to manage their copyright liabilities’: NSW Government, Submission 294.