146.R Xavier
ALRC Review on Copyright and the Digital Economy
Submission on IP 42
Thank you for the opportunity to submit to this review.
Before I get to the questions asked in the issues paper, I'd like to start by commenting on three issues that are fundamental to setting up Australia's copyright system to be able to deal adequately with the digital economy. These are the way reproductions incidental to use are treated by the Copyright Act, fair use (which could have a whole issues paper of its own), and technological protection measures (TPMs).

Reproductions for the purpose of use
One major difference between old-style non-electronic material and electronic material is that electronic material generally cannot be used without creating a copy of it in the memory of the device used to access it. The creation of this copy is likely to infringe copyright unless covered by an exception, as a result of an amendment to the Copyright Act's definition of "material form" made by Schedule 9 of the US Free Trade Agreement Implementation Act 2004. This amendment reversed large parts of the decision in Australian Video Retailers Association Ltd v Warner Home Video Pty Ltd [2001] FCA 1719 with the apparent result that any use of electronic copyright material will involve copyright infringement.
The USFTAI Act also added exceptions (s43B and 111B) to cover temporary reproductions made as part of a technical process of using a copy. As the explanatory memo for Schedule 9 item 188 said:
The extended definition of ‘material form’ effectively extends the application to all reproductions made in using copyright material. It will include, for example, electronic copies of a transitory nature made in the random access memory (RAM) of digital devices such as computers, DVD and compact disc players. In order that users of copyright material are not potentially liable for copyright infringement for the normal use of non-infringing copyright material an exception is required.
There are two problems with these exceptions.
The first is that the change to the definition of "material form" also appears to have reversed the decision in Australian Video Retailers that watching a DVD did not involve an infringement of the copyright in the computer program on the disc that provides menu functions and controls playback (see paragraphs 99 to 104 of the judgement). There is an exception for normal use of a computer program, in s47B, but it is subject to an "express direction or licence given by, or on behalf of, the owner of the copyright in the computer program" (s47B(2)). This seems to mean that if a copy of a film, work etc is wrapped or encased by a computer program in the way that a film on a DVD is, mere use of it can be made subject to any s47B(2) direction or licence given for the program. It may be that even the act of opening most types of electronic document involves making a copy of a "computer program" in the form of any macros, scripts or formatting instructions contained in the document. 
The second problem is that s43B and 111B, as amended by the Copyright Amendment Act 2004, are now limited by s43B(2)(a) and 111B(2)(a). s43B(2)(a) is as follows:
(2)	Subsection (1) does not apply to:
(a) the making of a temporary reproduction of a work if the reproduction is made from:
		(i) an infringing copy of the work; or
(ii) a copy of the work where the copy is made in another country and would be an infringing copy of the work if the person who made the copy had done so in Australia; or
s43B(2)(a)(i) is reasonably straightforward, although it would be improved if it only applied to a copy if the person using the copy knew or ought reasonably to have known that the copy was an infringing copy, similar to the exceptions for the sale of parallel imports in s38 and s103.
But s43B(2)(a)(ii) is baffling. The explanatory memo for the amendment that introduced it (Copyright Legislation Amendment Act 2004, Schedule 1 item 3) says:
Acknowledging that some temporary reproductions will be made from infringing copies of works outside Australia that are accessed online by a person in Australia, new sub-paragraph 43B(2)(a)(ii) provides that the exception also does not apply to a copy of the work where the copy is made in another country and would be an infringing copy if the person who made the copy had done so in Australia.
This makes little sense. There is nothing in the wording of the exclusion that limits it to reproductions of infringing copies outside Australia that are accessed online from Australia, and it is hard to see any ambiguity that is resolved by the explanatory memo. The exclusion seems to result in s43B not applying to any imported copy unless the person who manufactured the copy overseas also had a licence to do so in Australia. How anyone who just wants to listen to a CD is supposed to know these details of the licensing arrangements involved in its manufacture is unclear.
Section 111B is worse, because an "infringing copy" of a film includes a copy that a person imports for his or her own personal use, e.g. by mail order or by bringing it back in a suitcase. This is true even if the copy was made legitimately overseas, was legally imported for personal use and has never been involved in any kind of copyright infringement.
This may all seem a bit academic, as (at least to my knowledge) the limits to s43B and s111B and the s47B(2) exclusion for things encased in a computer program have not seen much enforcement, if any. But:
•	The framework of rights and balancing exceptions established by Berne and maintained by TRIPS and other agreements is based on giving creators control over the right of reproduction and publication, while exclusive rights of use are a consequence of technology that could not have been foreseen when Berne set the foundations for the world copyright system. Exclusive rights of use threaten the availability of all other exceptions and tip the balance heavily in favour of rights-holders,
•	The s47B(2) exclusion could, if rights-holders so chose, be used to shut down library lending, renting, secondhand sales, parallel imports for personal use and many other uses of any type of material that can be encased in a computer program (in some cases, s47B(2) may already have been activated by terms of use or other licences, or by wording on the packaging of physical media). It may also be possible to use s47B(2) directions to completely exclude non-computer program material from various other exceptions that do not apply to computer programs, such as the exceptions in Part VB,
•	Even a completely trivial infringement that would never lead to enforcement means that the exclusive right of access created by the TPM provisions in Part V of the Act is much stronger and exceptions to it cannot be created under s249(4),
•	An exclusive right of use is inconsistent with the assumption, discussed by Kirby J in Stevens v Sony (2005) HCA 58, that an individual should have undisturbed enjoyment of his or her possessions unless there is a good reason to interfere with that right.
I submit that:
•	Use of copyright material, and any reproductions necessary for or incidental to use, should not infringe on copyright regardless of what form the material is in,
•	If it is seen as necessary to exclude reproductions made from unauthorised copies, the exclusion should be limited to cases where the user knew or ought reasonably to have known that the copy had been made unlawfully (similar to the rule for sellers of infringement by sale and other dealings in s38 and 103), and the exclusion should not prevent the use of parallel imports (and certainly not copies of any type of material that were imported for personal use),
•	If a higher level of protection is provided for computer programs, publishers should not be able to level-up the protection of other classes of copyright material by encasing them in computer programs. This could be achieved by treating such composite works according to their essential character and applying the corresponding level of protection, similarly to the way commercial rental agreements are treated by s31(5) as a result of TRIPS.
A sufficiently broad fair use exemption could also be used to cover this ground. 

Reproductions for the purpose of use - computer programs
Computer programs are a special case, because of the s47B(2) exclusion of the s47B(1) exception (they are also a special case because s47B(1) is not limited to temporary copies, but this is necessary because of the way that using a computer program generally requires a copy of it to be installed to a hard drive or other storage device).
s47B(2) appears to be designed to allow a rights-holder to sell a copy of a computer program accompanied by a statement on the box that use of the program is unauthorised unless the user agrees to an end-user licence agreement (EULA) that is accessible only when the program is installed after purchase, and then using the conferral of a licence as consideration for the formation of a contract consisting of the EULA. For software distributed online, the s47B(2) direction and the EULA may be presented as a contract at the point of sale that the user is expected to click agreement to (A common interpretation of the Act seems to be that computer programs cannot be used at all without a licence, but this cannot be correct - in the absence of a s47B(2) direction, s47B(1) permits use).
There are a lot of problems with s47B(2):
•	It is not clear exactly what a s47B(2) direction is if it is not given as part of a contract. Is it subject to Australian consumer protection laws (like the "unfair contract term" provisions of the Australian Consumer Law) in the same way as a term of a contract would be? If it is a unilateral direction rather than an "agreement", is it subject to s47H or can it exclude or limit the other computer program exceptions? Does it only exclude the s47B(1) exception, or does it also prevent the use of a computer program under other exceptions, such as the fair dealing exceptions that apply to all kinds of copyright material?
•	It is not clear what happens if a user acquires a (non-infringing) copy of a computer program in circumstances where the user is not given the s47B(2) direction or is given it some time after acquisition. If I buy a secondhand copy of a program, or if I receive some software as a gift, or if I buy a secondhand computer with software already installed on it legitimately by its former owner, it seems possible that s47B(2) would not apply and I would be able to use the s47B(1) exception freely. Even if I was required to click-agree to an EULA at some point after "acquiring" the copy, the EULA would probably fail as a contract through lack of consideration. Software publishers may not agree with any of this, but it seems a reasonable interpretation of the Act,
•	In practice EULAs are almost always grossly imbalanced standard form documents, full of provisions that require the licensee to indemnify the licensor, purport to oust local jurisdiction (usually in favour of US jurisdiction), permit the licensor to change the terms of the licence at any time, purport to exclude various consumer rights, prohibit class actions, exclude all copyright exceptions that can be excluded, etc etc. It is not clear why publishers of computer programs should be able to use copyright law to require consumers to enter into this kind of contract after they have already paid for a copy of the program. If such a contract is going to be required, it should be entered into at the point of sale,
•	It has never been clear why computer programs require an exclusive right of use that goes far beyond the exclusive rights provided for other classes of material, other than that the people who own copyrights in computer programs benefit from being able to claim that any use that is not expressly authorised is forbidden,
•	Two particularly significant and often reasonable ways that licence agreements are used to control use, by permitting a certain number of people in an organisation to use a piece of software or by limiting the length of time software can be used, could be dealt with in the absence of s47B(2) by selling additional licences to use a single copy and by framing commercial licensing agreements as rentals.
I submit that:
•	s47B(2) should be removed. The person who possesses a legitimate copy of a computer program should be able to make normal use of it without infringing copyright.
•	However, if something like s47B(2) is to remain, the status of a direction not to use a computer program should be clarified. Any such direction should be required to be contractual in nature and should be subject to the normal rules of contract, including any new rules resulting from ALRC recommendations about the exclusion of exceptions by contract.

Fair Use
So many of the problems with the current Copyright Act would be eliminated by the enactment of a general fair use exception that it really needs to be dealt with before getting to any of the more specific questions raised in the issues paper.
The recent US case of The Authors Guild, Inc. v. Hathitrust (available at https://www.eff.org/sites/default/files/HathiTrust%20decision%20copy%202.pdf) presents a paradigmatic example of the benefits that can flow from fair use. This case considered the book scanning project engaged in by Hathitrust (a group of US universities) working with Google, which has created, at http://www.hathitrust.org/, a searchable database of millions of books comprising billions of pages. This database is of immense value to researchers and to future generations who will have the benefit of this permanent digital archive (unless the judgement is reversed on appeal).
Some essential aspects of fair use noted by the judgement are:
•	Whether a use is commercial or not is an important factor, but not decisive,
•	Fair use can in some cases involve the reproduction of the entire work (here, this was acceptable because while Hathitrust holds digital copies of all reproduced books it does not generally provide the text of copyrighted books to users, instead responding to searches with references to the print editions),
•	A rights-holder cannot pre-empt transformative fair use by arguing hypothetical future markets; a market for licences for the use must actually exist. In this case, the judge observed that the Hathitrust project would be impossible if licences were required due to the cost (estimated at around $569,000,000), and also the difficulty involved in identifying and tracking down the holder of copyright in each of millions of works,
•	The availability of a specific exception does not exclude from fair use uses that are similar to those covered by the exception,
•	Fair use can take into account broader public policy objectives, such as access for the disabled consistent with the Americans with Disabilities Act (Hathitrust provides special access for print-disabled individuals).
As the judge says: "I cannot imagine a definition of fair use that would not encompass the transformative uses made by Defendants’ MDP [mass digitization project] and would require that I terminate this invaluable contribution to the progress of science and cultivation of the arts that at the same time effectuates the ideals espoused by the ADA." 
Needless to say, a project like Hathitrust could not exist in Australia under the present Copyright Act. Australians are, however, able to benefit from the flexibility of US copyright law by searching Hathitrust's database - our lack of fair use is not protecting anyone's rights, just ensuring that innovation happens offshore.

Fair use in the Issues Paper
The issues paper does a good job of setting out the arguments for and against fair use. I think the most important arguments for fair use are:
•	A broad test of fairness or reasonableness would allow courts to cut through absurdities like the limits on the s111B exception discussed above, and produce exceptions that actually make sense,
•	The obvious benefit of a flexible doctrine that can adapt to advances in technology. It's crazy that in Australia in 2012 it is apparently illegal to operate an Internet search engine, and in general fair use gives US-based Internet companies a huge advantage,
•	Judges are susceptible to argument rather than lobbying, and are less likely than politicians to favour narrow but focused interests over the broader public interest (no doubt this is a large part of the reason why fair use has been opposed so strongly),
•	The Internet and the global exchange of culture it allows means that Australians must compete for their audience not only with traditional content production and distribution businesses, but also with creators of commercial and non-commercial transformative works, mostly in the US, who are able to take advantage of fair use to build on existing cultural artefacts in ways that we cannot,
•	Works by Australians are already subject to fair use when they are published over the Internet, including to Australians, by people in the US or any of the other countries that have fair use. The lack of fair use in this country doesn't protect Australian creators from this; it just ensures that any money that can be made from providing services like Google Image Search under fair use flows overseas. This factor alone, I think, counters many of the arguments against adopting fair use in Australia,
•	It may make projects like Hathitrust possible here.
Some of the arguments against fair use presented in the issues paper have some force, but all could be dealt with by careful framing of the exception.
Uncertainty of application
The Copyright Act is already full of uncertainty, not least in its application to new forms of technology. It's striking to compare Australian judicial decisions on copyright, which are required by the Act to engage in endless hair-splitting about things like how many bytes of information must be reproduced in computer RAM before a reproduction in material form has occurred, with the principle-based weighing up of precedents and public policy considerations in US fair use decisions like Hathitrust. Fair use in fact presents an opportunity to simplify and streamline copyright law around precedents based on generalisable principles, rather than technology-specific interpretations of obsolete statutory provisions that have to be reargued every time someone invents a new type of online service.
But to the extent that uncertainty is a problem, it could be dealt with. I suggest a provision along the lines of s107 of the US Copyright Act followed by a list of examples of uses that may, depending on specified factors corresponding to s107(1)-(4), be considered fair use. This list should be non-exhaustive and non-limiting, and care should be taken to avoid narrowing the scope of fair use by providing examples that are subject to express limits other than the four factors and the basic test of fairness. For example, the list could include:
•	the reproduction of a fair amount of a literary work in a review,
•	the making of a backup copy of a computer program,
•	"non-consumptive" use of a work enabled by technology that does not directly trade on the underlying creative and expressive purpose of the work (as recommended by the Hargreaves Review),
•	the making of incidental copies (temporary or otherwise) in order to use copyright material for its intended purpose,
•	format-shifting or time-shifting for personal use,
•	etc.
The existing exceptions would still be needed at least temporarily; those that become unnecessary could be gradually pruned out of the Act as the scope of fair use becomes clearer. However, the various limitations that they are subject to, such as hard upper limits on the proportion of a work that can be reproduced, should not be permitted to limit the scope of fair use. It would be best to retain the existing exceptions in the Copyright Act alongside an express provision that they do not limit the fair use exception, similarly to the way that the US Copyright Act section 108 exception for libraries is expressed not to limit section 107 fair use.
Likelihood of higher transaction costs/overly cautious response by users
Any possibility that fair use could make things harder for users than they are now, eg by some kind of "chilling effect", could be dealt with be retaining the existing exceptions and by providing clear guidance as to the minimum scope of fair use.
I doubt any effect on rights-holders' costs of enforcement would be significant. The real problems of enforcement faced by Australian rights-holders are mostly problems with detection, jurisdictional limitations and the bad PR that would be associated with US RIAA-style campaigns of litigation against individuals accused of infringement. None of this would be changed by fair use.
The ALRC should not accept arguments that fair use would encourage infringement without evidence. As I understand it Australians are among the most prolific file-sharers in the world, but this is far more likely to be the result of the rough deal we get from geographic market segmentation than anything to do with exceptions to copyright.
The need for litigation to determine the scope of permitted uses, and the lack of jurisprudence
This is an inevitable result of fair use, true. But it could be dealt with in large part by explanatory material making it clear that Australian fair use is intended to start from more or less the point where US fair use is now and to develop from there. Australian courts should be able to deal with this, although the legislation may need to expressly encourage them to interpret fair use broadly and to incorporate principles like freedom of speech that have been central to the development of fair use in the US.
Besides, litigation is already needed to determine the scope of the existing exceptions and their application to emerging technologies - fair dealing law is full of conflicting precedents. Moving to a more principle-based regime could well make the law more predictable rather than less.
Potential access to justice problems
This argument presupposes that fair use will make creators' rights more difficult to enforce. But practically all economically significant forms of infringement will be just as unlawful under fair use as they are now. If anything fair use could improve access to justice by encouraging activity to occur within Australia, subject to local jurisdiction, rather than offshore where enforcement will be far more difficult.
Compliance with Australia's international obligations with respect to the three-step test
The US has had fair use for a long time now, and it doesn't seem to have caused problems for them in joining Berne or TRIPS. The fact that the US was a large part of the driving force behind ACTA without any suggestion that ACTA's three-step test requirement excluded fair use, and that this was apparently accepted by other signatories, adds strength to the argument that the consistency of fair use with the three-step test has become established as a matter of custom. The fact that the AUSFTA requires the three-step test but appears not to have resulted in the US abandoning fair use suggests that the Australian government has accepted this argument. It would be ridiculous for Australia to feel constrained to adopt a reading of the three-step test that excludes fair use while the United States, the world's largest exporter of both copyright material and copyright maximalism, does not. 
(See http://williampatry.blogspot.com.au/2008/04/fair-use-three-step-test-and-european.html for a discussion of how fair use was dealt with when the US was joining Berne and when TRIPS was being negotiated.)
However, if fair use's open list of purposes is seen as an obstacle to compliance with the three-step test, an alternative would be to set out a list of more specific fair use or fair dealing exceptions that together cover essentially the same ground. 
For example, there could be fair use exceptions for purposes like: facilitating the use of new technology, non-consumptive uses including indexing, facilitating communication, personal and domestic use, political speech etc., along with the existing fair dealing exceptions re-expressed as fair use. For all of these exceptions the decisive factor should be fairness rather than strict tests of purpose; a focus on the purposes for which fair dealings made be made rather than the aspect of fairness has seen the existing fair dealing exceptions given excessively narrow scope.
This approach would lose some of the benefit that fair use brings in dealing with unexpected technological and market developments, but it would still be a great improvement on what we have now.
"Fairness" versus "reasonableness"
The great advantage of a test of "fairness" is that it requires competing interests to be taken into account and balanced. Reasonableness would probably be interpreted as requiring some objective standard to be applied, but not necessarily one that was "fair".

Technological Protection Measures
It is not clear to what extent this review is going to consider exceptions to the TPM provisions in of the Copyright Act (the TPM provisions being Part V Division 2A and Division 5 Subdivision E, s249(4), and the definition of "access control technological protection measure") , other than the narrow s249(4) exceptions that are expressly excluded by the final paragraph of the terms of reference. Nor is it clear how much this review will consider the interaction of the TPM provisions with the exceptions to copyright in the rest of the Act, and their interaction with the new exceptions to be considered by the review. But it must do so.
In the absence of judicial consideration it is hard to predict exactly what the TPM provisions mean. But submissions to the recent Attorney-General's department s249(4) review make it clear how the TPM provisions are being interpreted and applied by those who run into them most often, mainly cultural and educational institutions: once material has had a TPM applied to it, it cannot be safely reproduced or even used in any way that is not expressly permitted. There are exceptions, but they are extremely limited (and most are in practice available only to institutions who can make use of in-house expertise to perform legal circumventions; individuals without technical skill generally cannot use the s249(4) exceptions because of the prohibition on circumvention devices and services). The provisions appear to have been carefully designed to achieve this effect, in particular through the use of the very broad term "circumvent", the lack of any need for a connection between circumvention and copyright infringement and the lack of any requirement for a TPM to be effective.
In effect, the TPM provisions have created a new class of exclusive rights of "access" that trump all of the exceptions that have been developed to achieve a balance between the interests of copyright-holders and users of copyright material. As more and more material is released only in TPM-encumbered digital form, exceptions to copyright are becoming less and less relevant.
For example, take a copyrighted film that is available only on DVD. DVDs are protected by the "content scrambling system" TPM, which controls access to them by requiring them to be used in an authorised DVD player or DVD drive that does not permit copying of a copy-protected disc. It seems that any act of digitally copying a film on DVD would require access to be gained by circumventing the CSS system, which is unlawful (except under the very limited exceptions to the TPM provisions) regardless of any exception to copyright. Moreover, even making an analogue or indirect and imperfect digital copy of a film on DVD, such as by intercepting the signal on its way to the screen or through the use of screen capture software, could be regarded as a circumvention. A court may or may not take this view, but it is certainly consistent with the provisions of the Act. It's worth noting that the possibility that the use of screen capture technology to create low-quality copies could infringe the US anti-circumvention provisions on which the Australian provisions are based was considered in the recent section 1201 rulemaking by the US Librarian of Congress, who regarded the matter as unsettled to an extent that exemptions were required.
(See 44 FR 65269, available at http://www.copyright.gov/fedreg/2012/77fr65260.pdf: "As an additional concern relating to screen capture technology, proponents maintained that even if the Register acknowledged now, as she did in 2010, that certain types of video capture software are noncircumventing, there is still no assurance that all copyright owners share this view. Proponents observed, for example, that litigation had been instituted over the use of similar methods of acquiring content protected by access controls. In light of the unsettled legal landscape, the Register determined that there is a need for limited exemptions to address the possible circumvention of protected motion pictures when using screen capture technology.")
Do fair dealing and similar exceptions have any application to copyright material that is subject to a sufficiently broad TPM? I think the answer is: very little, if any. 
To be able to properly fulfill its terms of reference, the ALRC must address the TPM provisions and their interaction with the exceptions elsewhere in the Act; the terms of reference, after all, require the consideration of all exceptions in the Copyright Act, and this includes the exceptions to the TPM provisions. The work that the ALRC has been asked not to duplicate is limited to the very narrow s249(4) process, which has nothing to do with the exceptions in the definition of "access control technological protection measure" or the other exceptions in Part V. And, to be honest, the explanation in paragraph 19 of the Issues Paper that "Currently there are international treaty discussions on exceptions in relation to technological protection measures (TPMs) and this Inquiry is not to duplicate such work" makes no sense. Current treaty negotiations are at least as likely to result in further restrictions on Australia's ability to legislate for fair use or other copyright exceptions as to require any changes to Australia's TPM laws, which are already probably the harshest in the world.
To ensure that any exceptions that it proposes will in fact be "adequate and appropriate in the digital environment", the ALRC will need to consider:
•	How the TPM provisions can be improved consistently with the AUSFTA to allow copyright exceptions to co-exist with TPMs. In particular, the extent to which the Copyright Act should be amended to give effect to Paragraph 17.4.10(c) of the AUSFTA, which provides that Article 17.4 shall not be construed as reducing or extending the "scope of applicability" of the limitations and exceptions permitted under a range of agreements including Berne and TRIPS. To argue that the TPM provisions of the Copyright Act do not reduce or limit the "scope of applicability" of exceptions permitted under these agreements is to draw a false distinction between abolishing an exception and prohibiting the use of the exception; either way, the exception does not apply,
•	How to fix the problems caused by the prohibition on circumvention devices and services for the purposes of relying on a s249(4) exception (which was described variously as a "problem", a "flaw", an "egregious flaw" and a "lamentable and inexcusable flaw...that verges on absurdity" in the House of Representatives Legal and Constitutional Affairs Committee's 2006 Review of technological protection measures exceptions (see http://www.aph.gov.au/binaries/house/committee/laca/protection/report/fullreport.pdf). One way of dealing with these problems may be a scheme similar to the schemes in the United Kingdom and Canada which provide a process for requiring rights-holders to permit the use of exceptions,
•	Appropriate exceptions that could be included in Part V of the Copyright Act, or in the definition of "access control TPM", to prevent TPMs and the TPM provisions depriving Australians of rights under a range of other laws (see my submission to the Attorney-General's department TPM review, attached to this submission, for a discussion of how TPMs are being used across borders to evade and frustrate Australian consumer protection laws),
•	How to fix the defects which result in the exception for region-locks on films in s(c) of the definition of "access control TPM" being ineffective (see my TPM review submission), and whether all forms of region lock should be excluded from the TPM provisions,
•	Whether the exceptions to the TPM provisions should be able to be excluded by contract,
•	Whether the TPM provisions could be improved by requiring TPMs to be "effective" (a word that was somehow lost between the text of the AUSFTA and the Act) and making it clear that an act constitutes a circumvention only to the extent that it in some way disables or interferes with a TPM,
•	Whether rights-holders who use TPMs should be required to inform users of the presence of the TPMs and the acts that they are intended to prevent (presently, it is hard to see how a user without specific information about the technical characteristics of a TPM would be able to determine the extent of the access right that he or she is not to infringe),
•	Whether it is appropriate for the protection provided by the TPM provisions to extend to safeguarding "business models" which may have little or nothing to do with copyright infringement (see the Australian Publishers' Association submission to the TPM review for an argument in favour of protecting "business models"). The present provisions appear to work this way, and clearly extend far beyond dealing with copyright infringement or even acts covered by copyright,
•	Whether there is any credibility to the argument, often put in support of TPM-mediated access rights, that TPMs are effective against large-scale copyright infringement. This argument has some force in one particular case: software designed to be used on special-purpose hardware, which can be effectively protected by TPMs of the kind considered in Stevens v Sony (although the current TPM provisions go far further than is necessary to support these kinds of TPMs). But TPMs do not prevent large-scale infringement of any kind of material that can be used with a general-purpose computer, as after a TPM has been circumvented once, anywhere in the world, the material can be shared without the need for any further circumvention. Rather, the main purposes served by TPMs are to prevent small-scale, mostly domestic infringements (mixtapes, format-shifting, making backups, making user-generated content etc), to reinforce anti-competitive trade practices by inhibiting interoperability, and to prevent legitimate owners of copies of material from making use of exceptions to copyright. In fact, it is impossible to properly understand the history behind the TPM provisions outside the context of a decades-long war waged by rights-holders against the US doctrine of fair use,
•	Ways to fix the procedurally flawed s249(4) process for adding new exceptions,
•	Whether the TPM provisions are constitutional (it is not at all clear that they are adequately supported by the copyright power and the treaties power),
•	Whether the government should seek to renegotiate or withdraw from Article 17.4 of the AUSFTA.
If the ALRC does not address at least some of these issues, its recommendations will be largely irrelevant to many present forms of digital media, and even more irrelevant to future forms - hardly what one would expect from a review of "copyright and the digital economy".
The above assumes, of course, that the decision to exclude TPMs was made by the ALRC in considering its terms of reference. It would be obviously improper for the ALRC to fetter the performance of its independent statutory function with regard to a request from the government, except one given transparently through the terms of reference.

The rest of this submission addresses the questions asked in the issues paper.

Question 2. What guiding principles would best inform the ALRC’s approach to the Inquiry and, in particular, help it to evaluate whether exceptions and statutory licences in the Copyright Act 1968 (Cth) are adequate and appropriate in the digital environment or new exceptions are desirable?
The proposed principles all seem reasonable enough, but they suffer from a common problem of principles used in reviews like this in that they don't really say very much. Almost any approach to copyright could be justified just by giving each principle a different weight.
This review presents a valuable opportunity for the ALRC to recommend a set of basic principles to guide not just this review but the future of copyright in this country. I suggest the following as a starting point.

Copyright policy should be supported by evidence
This is the first recommendation of the Hargreaves Review, which was unimpressed with the extent to which arguments for increased copyright protection had been accepted without any apparent evidence for their benefit. The retrospective extension of copyright terms (part of an apparent international effort to prevent any commercially significant material falling into the public domain) was subject to special criticism.
Copyright reform in Australia has taken exactly the wrong approach to evidence. Reforms favouring rights-holders are implemented on the basis of questionable models of the harm suffered as a result of copyright infringement and unsupported assertions about the benefits to Australians and the Australian economy of higher levels of copyright protection. Meanwhile, valuable exceptions are rejected on the basis that they would not benefit significant existing interests, ignoring the possibility that such interests would arise if only the exceptions existed. 
I submit that the ALRC should adopt Recommendation 1 of the Hargreaves Review as a guiding principle of the present inquiry, and should propose its application to all future reform of the copyright system.

Over-regulation should be avoided
The Copyright Act is full of rules that prohibit harmless activity, cannot be enforced, are routinely ignored and achieve nothing other than causing inconvenience for the few people who are scrupulous enough to comply with them. Prohibitions on making backups, the limits to the format-shifting exceptions and the limits on the s43B and s111B exceptions discussed above are good examples of this. All this does is encourage contempt for copyright by making everyone an infringer.
Principle 6 is a good start, but recommendation 5 of the Hargreaves Review is better; as it says, "Government should firmly resist over-regulation of activities which do not prejudice the central objective of copyright, namely the provision of incentives to creators". 
I submit that the importance of this principle means that the ALRC should state it strongly. 

Measures to prevent large-scale infringement should not be confused with measures to control personal use
It can be accepted that large-scale copyright infringement, such as through file-sharing, causes significant harm to rights-holders (although it is difficult to separate this harm from the effects that disintermediation, greater consumer choice and the vast amounts of material legitimately available free online have had on traditional industries). But claims for greater copyright protection often confusingly mix modelled statistics about potential sales lost to "piracy" with arguments for giving rights-holders greater control over harmless private uses of copyright material. As discussed below in answers to other questions in the issues paper, it should not be assumed without good reason that there is any connection between private copying for personal use and large-scale infringement.
I submit that a guiding principle for the review should be that measures to control private, personal use should be clearly distinguished from measures to prevent large-scale infringement, and should be justified accordingly.

Copyright reform processes should be transparent and democratic
Most recent copyright reform seems to have resulted from a process like this: an international agreement is negotiated between executive governments in secret, with input from rights-holders but not from users or civil society groups, while the negotiating parties assure everyone else that the negotiations will generate a balanced result and that all interested parties are being involved in the process. After signing, the agreement is presented to parties' legislatures as a fait accompli. When the agreement is exposed to independent scrutiny it becomes rapidly apparent that it has bound the parties to copyright "reforms" that are grossly imbalanced in favour of rights-holders and make it very difficult for future legislatures to enact appropriate exceptions or deal with changing technological or market conditions. The result has been a practically irreversible ratchetting-up of copyright protection.
This is what happened with the Australia-US FTA, is happening with the Trans-Pacific Partnership and looked like it was going to happen with ACTA until the ratification process for that treaty was derailed in Europe. As Kader Arif, rapporteur for ACTA in the European Parliament, wrote after stepping down in protest:
I condemn the whole process which led to the signature of this agreement: no consultation of the civil society, lack of transparency since the beginning of negotiations, repeated delays of the signature of the text without any explanation given, reject of Parliament’s recommendations as given in several resolutions of our assembly.
(http://www.bbc.co.uk/news/technology-16757142)
The ALRC should recommend that future copyright policy development be open and transparent, that binding international agreements should be entered into only when they commit Australia to policies that are clearly to the benefit of Australians and are acceptable to rights-holders and users alike, and that permanent commitments be made only when it is certain that they will be appropriate in the foreseeable future and beyond as well as the present.
It may be useful to re-establish a body similar to the Copyright Law Review Committee to contribute to balanced, evidence-based copyright policy.

Question 3. What kinds of internet-related functions, for example caching and indexing, are being impeded by Australia’s copyright law?
Question 4. Should the Copyright Act 1968 (Cth) be amended to provide for one or more exceptions for the use of copyright material for caching, indexing or other uses related to the functioning of the internet? If so, how should such exceptions be framed?
It seems clear that many basic Internet services, in particular search engines, cannot legally be based in Australia. This is true even for services that respect the "robots.txt" file, which is a mechanism by which a site can control the way it is indexed and archived. Unfortunately the Copyright Act does not recognise this kind of customary opt-out arrangement, except perhaps in awarding damages, and a search engine based in Australia would run the risk of infringing the copyright in the sites it visited simply by shuffling bits around in computer memory for the purpose of indexing (let alone caching).
Good ways to deal with this problem would be through fair use or an exception for transformative uses that take advantage of technology. 
A bad way to deal with this problem would be through the safe-harbour mechanism in Part V Division 2AA of the Copyright Act. The problem is with the conditions in s116AH(1), which could easily be interpreted by a court in a much narrower way than the conditions that apply to the DMCA safe-harbour mechanism available in the US (a particular problem is the "no financial benefit" condition, which could easily be interpreted by an Australian court as excluding most forms of commercial service). Unfortunately it seems that neither the Attorney-General's review nor the present ALRC review is going to consider the appropriateness of these conditions.
The inevitable result of failing to deal with this problem will be that Australians will continue to rely on US-based Internet services, as few will be able to develop here.

Question 7. Should the copying of legally acquired copyright material, including broadcast material, for private and domestic use be more freely permitted?
Question 8. The format shifting exceptions in the Copyright Act 1968 (Cth) allow users to make copies of certain copyright material, in a new (eg, electronic) form, for their own private or domestic use. Should these exceptions be amended, and if so, how? For example, should the exceptions cover the copying of other types of copyright material, such as digital film content (digital-to-digital)? Should the four separate exceptions be replaced with a single format shifting exception, with common restrictions?
Yes to all of these questions. There is simply no legitimate reason for the exclusive rights provided by copyright to extend to exercising this kind of fine control over private and domestic use.
A common argument against permitting format-shifting and other types of private copying is that this would encourage large-scale copyright infringement. I am not aware of any evidence whatsoever in support of this argument. There is no reason to assume that an individual will be more likely to engage in large-scale copyright infringement just because he or she is allowed to make copies for personal use. It could just as easily be argued that someone who is already an infringer because of a trivial act is less likely to care about further infringements, or that imposing unenforceable liability for common acts that cause no conceivable harm will only encourage contempt for copyright law and lead to more infringement.
New s29.22(1) added to Canadian copyright law by the recent Copyright Modernization Act is a good model for such an exception (except for 29.22(1)(c), which would be unnecessary in the Australian Act because of the existing prohibition on circumvention and would prevent the creation of appropriate exceptions under s249(4)).
(see http://balancedcopyright.gc.ca/eic/site/crp-prda.nsf/eng/h_rp01226.html)
Also, a problem with some of the existing format-shifting exceptions is the way that the act of format-shifting is retrospectively deemed to have been an infringement if the original copy is disposed of to someone else (see eg s47J(6)). This seems to mean that if a copy is made for the purposes of format-shifting, the original can never be dealt with again even if the format-shifted copy is destroyed. By contrast, s29.22(4) of the Canadian Copyright Act does not apply, and format-shifting continues to be legal, if the reproduction is destroyed before the main copy is disposed of. This is the obvious way for this kind of rule to work.
This retrospectivity should be fixed throughout the Act, as it appears several times.

Question 9. The time shifting exception in s 111 of the Copyright Act 1968 (Cth) allows users to record copies of free-to-air broadcast material for their own private or domestic use, so they may watch or listen to the material at a more convenient time. Should this exception be amended, and if so, how? For example:
(a) should it matter who makes the recording, if the recording is only for private or domestic use; and
(b) should the exception apply to content made available using the internet or internet protocol television?
There is no reason to confine this exception to broadcasting services. It should apply to content made available by any means (including online) at a specific time, or within a limited period. However, it seems reasonable, considering the purpose of this section, to require the copy to be made by the person who is going to use it or a member of that person's family or household. 

Question 10. Should the Copyright Act 1968 (Cth) be amended to clarify that making copies of copyright material for the purpose of back-up or data recovery does not infringe copyright, and if so, how?
Definitely. Much as for the arguments against permitting format-shifting, the "gateway drug to piracy" arguments against permitting backups are weak, and the benefits to users of being able to make backups of fragile and expensive digital media would be considerable - especially for optical discs, which seem almost designed to be easily damaged. I think parents would particularly appreciate this exception.
It would also make little sense to permit format-shifting but not backups, or vice-versa, as in many cases a format-shifted copy also functions as a backup.
Ideally, this would be covered by fair use. Alternatively, the exception in section 47C (including the fact that it cannot be contracted out of, under s47H) for computer programs could be extended to cover all forms of copyrighted material. However, s47C(4)(b) is unnecessary (as this rule is already covered by the TPM provisions and a special provision would prevent an appropriate s249(4) exception being created) and s47C(4)(c) suffers from similar problems to 47B(2), discussed above.

Question 11. How are copyright materials being used for social, private or domestic purposes—for example, in social networking contexts? 
I think it's fair to say that few people, and especially few young people, pay much attention to copyright when interacting casually online. It's common to post, on services like youtube, imgur and a vast range of discussion forums, derivative works such as home videos with music in the background or edited in, screen-captured videogame playthroughs, altered images, image macros (images with overlaid text), quotes from other websites, excerpts from films etc.
Copyright is very rarely enforced against people doing this, most likely because infringements are difficult to detect, the harm caused is trivial or zero and any remedies would be small and difficult to recover. When enforcement action is taken it is usually through a DMCA takedown notice sent to a US-based content host.

Question 12. Should some online uses of copyright materials for social, private or domestic purposes be more freely permitted? Should the Copyright Act 1968 (Cth) be amended to provide that such use of copyright materials does not constitute an infringement of copyright? If so, how should such an exception be framed?
Yes. The Canadian Copyright Modernization Bill's s29.21(1) on "non-commercial user-generated content" provides a good example of how this can be dealt with. I submit that a similar exception would be appropriate for Australia, as this kind of activity is ubiquitous online and does not significantly affect the interests protected by copyright.
(see http://balancedcopyright.gc.ca/eic/site/crp-prda.nsf/eng/h_rp01226.html) 
Of course, this would only deal with the users' side of social networking. Until the problems with authorisation liability and the inadequacies of the safe harbour system are fixed, there will be no possibility of social networking hosts setting up in Australia.

Question 13. How should any exception for online use of copyright materials for social, private or domestic purposes be confined? For example, should the exception apply only to (a) non-commercial use; or (b) use that does not conflict with normal exploitation of the copyright material and does not unreasonably prejudice the legitimate interests of the owner of the copyright?
It seems reasonable to restrict an exception based on the Canadian example to non-commercial use; this would be a better way of defining the scope of the exception than something like "social, private or domestic purposes", which could exclude the personally expressive and creative purposes that drive much of this type of activity. However, the person who creates material under this exception should be able to authorise the publication of the material on content platforms that may be commercial and may themselves make money from the publication, e.g. by charging hosting fees or by serving advertisements alongside the material, as long as he or she does not benefit personally.
If the use is limited to use that "does not conflict with normal exploitation of the copyright material", the limit should not contain an additional express limb about the "legitimate interests of the owner of the copyright". Including both limbs could imply that the interests referred to in the second extend beyond the interests protected by copyright, giving the second limb an indeterminate scope, and a person seeking to rely on the exception would be unlikely to be able to work out what kinds of "interests" a rights-holder might claim to have. Compliance with the three-step test doesn't require the test to be transposed directly into legislation; s29.21(1)(d) of the Canadian Act appears to be a way of giving effect to the test without quoting it directly.
This exception would also be difficult to rely on if there were severe penalties for actions that almost fell within it but failed, perhaps on a technicality. The remedies available against a person relying on this exception reasonably and in good faith should be limited to an order to stop publishing to the extent that the person is capable of doing so (the Canadian Copyright Modernization Act limits damages for non-commercial infringement, although the damages that can be awarded would still be crippling to many of the people who would be likely to rely on this exception). Similar rules may be needed for other exceptions designed to be relied on by individuals engaging in non-commercial activity.
This exception would probably not be covered by fair use, as it is not limited to the kinds of purposes covered by fair use.
Also, if this exception is added alongside fair use it should be clear that it does not limit fair use.

Question 14. How are copyright materials being used in transformative and collaborative ways—for example, in ‘sampling’, ‘remixes’ and ‘mashups’. For what purposes—for example, commercial purposes, in creating cultural works or as individual self-expression?
Question 15. Should the use of copyright materials in transformative uses be more freely permitted? Should the Copyright Act 1968 (Cth) be amended to provide that transformative use does not constitute an infringement of copyright? If so, how should such an exception be framed?
Question 16. How should transformative use be defined for the purposes of any exception? For example, should any use of a publicly available work in the creation of a new work be considered transformative?
Reasonable sampling, where small parts of an existing work are quoted as small parts of a new work, should be covered by an exception for "quotation" and should not need a special transformative use exception. 
Many other cases of this kind of transformative use would also be covered by the exceptions discussed in questions 11-13 or the existing parody/satire fair dealing exception.
Otherwise, this exception would best be treated as part of a broad fair use exception, although in many cases "sampling", "remixes" and "mashups" would not be sufficiently transformative to be covered by fair use in the absence of a special factor like parody or critique.
It would be best to use transformative use in the same way as it is used by US copyright law, where it is a legal concept, with a special meaning, that can form part of the basis for fair use. Repurposing the concept for a separate exception for derivative works would just be confusing.

Question 18. The Copyright Act 1968 (Cth) provides authors with three ‘moral rights’: a right of attribution; a right against false attribution; and a right of integrity. What amendments to provisions of the Act dealing with moral rights may be desirable to respond to new exceptions allowing transformative or collaborative uses of copyright material?
The first two rights are probably okay as is.
The right of integrity is a bit more complicated, especially now that the Act provides a parody/satire fair dealing exception. It may be that parody or satire would be considered reasonable and thus non-infringing, but it would help if the Act made it clear that a fair dealing does not infringe the right of integrity.

Question 23. How does the legal treatment of orphan works affect the use, access to and dissemination of copyright works in Australia?
Question 24. Should the Copyright Act 1968 (Cth) be amended to create a new exception or collective licensing scheme for use of orphan works? How should such an exception or collective licensing scheme be framed?
An orphan works exception would be a very positive reform. Ideally it would involve as little bureaucracy as possible, although it would be reasonable to require records to be kept of attempts made to discover the holder of copyright before a work is treated as orphaned.
If after an orphan work is used an owner is identified, the owner's remedies should be in the form of future profits (and perhaps past profits if not too much time has passed). Giving the owner the power to prevent further use would make the orphan works scheme too risky for most purposes.
I was surprised to read the suggestion in the Attorney-General's Department paper on orphan works that one disadvantage of an orphan works scheme would be the "Possibility of reducing competition as users may prefer to use 'cheaper' orphan works, rather than other copyrighted works". This factor (which would be better characterised as increasing competition) should not be taken into account in any circumstances; the same logic would support measures to limit the public domain or inhibit the voluntary use of free licences like creative commons or open-source software licences, which would be highly undesirable. I submit that the ALRC should expressly reject as a factor to consider in developing any aspect of copyright policy the effect that the use of a work under an exception may have on the demand for unconnected works.

Question 25. Are uses of data and text mining tools being impeded by the Copyright Act 1968 (Cth)? What evidence, if any, is there of the value of data mining to the digital economy?
Question 26. Should the Copyright Act 1968 (Cth) be amended to provide for an exception for the use of copyright material for text, data mining and other analytical software? If so, how should this exception be framed?
If this is not covered by fair use, an appropriate exception could be something along the lines of that suggested by the Hargreaves Review - an exception for transformative uses that do not trade on the expressive content of the original material. The Hargreaves Review sets out a good series of arguments in favour of this exception, which apply as much to Australia as to the UK. The decision in Hathitrust also contains good reasons for supporting such an exception.

Question 27. Are there any alternative solutions that could support the growth of text and data mining technologies and access to them?
Exceptions for these kinds of use are sometimes argued against on the basis that rights-holders might be willing to licence material for the purposes of data-mining. This argument is fanciful. To be useful, data-mining must cover a very large range of material; rights-holder organisations generally seek to charge too much for permission if they are willing to allow data mining at all (some seem to use "data-miner" as a term of disdain similar to "pirate"), and obtaining licences from individual copyright holders would be impracticable. The chance that a market for licensing this kind of activity will develop is very small, and if there was such a market it would be taken into account in assessing a claim for fair use.

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?
A quotation exception would be a very good thing. It is already the case that reproductions that are not "substantial" do not infringe copyright, but "substantial" has been interpreted so as to cover reproductions of almost any expressive elements of a work. No legitimate purpose or interest is served by preventing fair quotation, and legal action taken on the basis of quotations is often blatant rent-seeking.
This exception should be a fair dealing exception based on art 10(1) of Berne rather than the three-step test, which does not apply to mandatory exceptions such as art 10(1). Importantly, it should not be limited to a specified purpose or purposes (which means that it has a different scope to fair use). It should cover all classes of works, including cinematographic works, and it should at the very least be capable of covering quotations like the one in Down Under.
It would be worth emphasising the fact that this exception is mandatory, and that Australia currently appears to be in breach of art 10(1).

Question 50. Should any other specific exceptions be introduced to the Copyright Act 1968 (Cth)?
I suggest the following exceptions (some of which may be to some extent covered by fair use). 

Making and retaining copies of digital ephemera
One consequence of the shift to digital distribution of content is that everything becomes ephemeral. 
A book, newspaper or CD is a physical object that can be relied on to continue to exist in its present form, while traditional broadcasters are required to retain recordings of everything that they broadcast for a particular time. There are also legal deposit schemes for some classes of publication.
Online material can be withdrawn at any time, and modified undetectably. Online publishers have no obligations to retain records of what they publish, and few are in Australia's jurisdiction in any case. But people have many reasons for needing to make and retain copies of such material. These include:
•	For the purpose of taking legal action, such as action for defamation, on the basis of material published online (for this purpose they are likely to start retaining copies before they have decided to seek professional advice from a lawyer, so s104(b)(i) may not apply),
•	In order to keep records of public statements (for example, retaining a copy of an article published on the website of a politician or other public figure as evidence of what was said, in case the article is removed or altered),
•	To catch companies engaging in practices such as false advertising,
•	To keep records of a company's statements in relation to the supply of goods or services, so as to hold the company to them,
•	To directly protect one's legal interests, for example by saving an electronic copy of a contract on a website that one is agreeing to be bound by in case the contract is removed or altered,
•	To save the time and bandwidth involved in downloading a large document by keeping a local copy,
•	And, of course, establishing that one's own copyright is being infringed online by someone else.
Presently, retaining a copy of online material such as a web page is likely to involve infringement, as a non-temporary reproduction will not be covered by the exception in s43A. This achieves nothing, as such infringement is common, is unlikely to ever be detected, does not harm the interests protected by copyright, and would be unlikely to give rise to significant remedies. Prohibiting such reproductions has the potential to severely prejudice people whose interests are affected by ephemeral material (although this potential is unlikely to be realised as in practice the prohibition is simply ignored).
A new exception should be created for the making and retention of permanent copies of digital material that a person reasonably believes to be ephemeral. The exception should not be limited further by purpose, as the purpose may not become apparent until the need to use the copy arises. 
This exception would also achieve a significant public policy purpose by helping to deal with the lack of a legal deposit scheme for material published online.

Forwarding emails (and otherwise dealing with material in a way that is implicitly permitted)
I doubt many people who use email think about copyright infringement when they click on the forward button, but forwarding an email is likely to infringe copyright. This is particularly likely to be an issue in a business environment when material sent to a single person needs to be shared within an organisation. It may even be infringement to include someone else's email in a reply that is sent only to that person, or perhaps to a list of addresses to which the original email was sent as well. Nobody would bother to obtain a licence to do these things, as everyone simply assumes that it is okay to deal with emails in this way unless there is a good reason to think that it isn't.
While an implied licence could be argued to exist in such cases, this would not be reliable and many email signatures contain legal boilerplate inconsistent with an implied licence. This is another example of copyright law failing to keep up with the day-to-day use of technology.  
There should be an exception to cover dealing with material in a way that is implicitly permitted by the form in which it is embodied. To deal with future changes in technology, this should not be limited to email or to any other particular form of communication.
However, as this exception is based on implied permission it should be subject to contract or to a sufficiently prominent exclusion (small print at the end of someone's signature block would not be sufficiently prominent).

Parallel importation
Restrictions on parallel importation were once justified by the significant fixed costs associated with producing and distributing physical copies of copyright material in different parts of the world. Online digital distribution has rendered these concerns irrelevant. Restrictions on parallel importation - especially for personal use - are probably the most resented and most commonly ignored parts of copyright law, and more than anything else encourage casual acceptance of copyright infringement. 
The restrictions on parallel imports of films are a particular problem, as any parallel-imported copy will be an "infringing copy" that cannot be watched without infringing copyright (as discussed in comments on a general exception for use above). The market for films is probably the most distorted by parallel import restrictions, as the infringing copy rule and the common use of region-locking TPMs means that a wide range of films are completely unavailable to Australians. Films that are available are likely to have a small range of language options (usually limited to European languages) and are almost always more expensive than in other comparable countries. 
Restrictions on parallel importation of legitimately produced material should be removed. At most, a scheme similar to the "non-infringing copy" scheme for software and sound recordings should apply to commercial importers and sellers of all classes of copyright material, so that copies that can be proved to have been made legitimately overseas can be imported for sale. A scheme with a lower standard of evidence could apply to parallel importation for personal use.

"First sale"
I agree with the arguments for a "first sale" doctrine made by eBay in its early submission to this review.

Question 54. Should agreements which purport to exclude or limit existing or any proposed new copyright exceptions be enforceable?
Question 55. Should the Copyright Act 1968 (Cth) be amended to prevent contracting out of copyright exceptions, and if so, which exceptions?
One of the results of the shift to digital distribution of copyrighted material is that it is now possible for publishers to require consumers to enter into long, detailed and onerous contracts as a precondition for granting any form of access. This is very different from traditional ways of distributing copyright material, where it is hard to get people to sign pages of fine print before they receive a broadcast or buy a book, CD or newspaper at retail.
Where contracts can be conveniently required, it is pretty much standard to include broad wording that purports to prevent the use of exceptions to copyright and may well be effective in doing so (although depending on whether the material can be used without a licence the remedy for a failure to comply may be contractual, rather than an action for infringement). 
For example, take the "terms and conditions" for the website for The Australian newspaper (www.theaustralian.com.au/help/termsconditions). The section on intellectual property includes the following:
You may download and view content or print a copy of material on this Site for personal, non-commercial use provided you do not modify the content in any way (including any copyright notice). All rights not expressly granted under these terms of use are reserved by News. Unless expressly stated otherwise, you are not permitted to copy, or republish anything you find on the Site without the copyright or trademark owners’ permission.
The "General conditions for use" for Fairfax websites (see http://www.fairfax.com.au/conditions.html) are similar, although interestingly they do permit a single permanent copy for personal reference:
Except where expressly provided otherwise in the Conditions, you may reproduce and display the Material on the Fairfax Network for your own personal, non-commercial use only. Except for the temporary copy held in your computer's cache and a single permanent copy for your personal reference, the material may not otherwise be used, stored, reproduced, published, altered or transmitted in any form or by any means in whole or part without our prior written approval or the written approval of our licensor.
In particular, you may not use any Material on the Fairfax Network to establish, maintain or provide, or assist in establishing, maintaining or providing your own publications, Internet site or other means of distribution. 
While these kinds of conditions may not be binding on a person who simply visits the website and reads a couple of free articles, they may well bind a person who enters into a subscription contract to access material behind a website's paywall or who signs up to contribute comments.
The terms of use for some other online services do expressly preserve copyright exceptions, such as the Terms and Conditions for the Crikey website (see http://www.crikey.com.au/about/terms-conditions/):
You are authorised to download and view content for your own personal, non-commercial use but you must not, without the prior written permission of the publisher, exploit any of our site materials for commercial purposes. And except as permitted under the Act (for example for the services of the Crown or in reliance on one of the fair dealing exceptions i.e. fair dealing for the purposes of research or study) no part of this website may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission.
Although even here it is not clear that fair dealing is permitted if it is for a commercial purpose.
The iTunes store Terms and Conditions (at http://www.apple.com/legal/itunes/au/terms.html) are much more complicated. Some rights to use or reproduce material are preserved or extended, but as all uses that are not specifically authorised are forbidden there is little if any scope for fair dealing or other exceptions to apply. The service also relies heavily on TPMs, and the Terms and Conditions include an agreement not to circumvent or tamper in any way with these TPMs.
Terms and conditions for other online services are generally consistent with one or other of the above examples.
It's clear that any exception that can be contracted out of will be for a substantial proportion of digital material. This will be done through standard-form contracts, and there will be no possibility whatsoever of negotiating the terms of these contracts with large companies whose business models rely on automated transactions and minimal customer service and who may not themselves have the right to negotiate on behalf of creators. If a publisher goes out of business, its contracts may not be available to a user who wants to check what rights they have. Australian consumer law may not have jurisdiction over these transactions, to the extent that it applies to intellectual property at all, and even if it does enforcement may be impossible.
There seems little point in providing for exceptions to copyright if they can be excluded as a matter of course by a paragraph in a standard-form contract that most users simply click past.
Limits to contracting out are especially important for exceptions that support freedom of speech, such as the news, reporting, commentary, parody and satire exceptions and many uses potentially allowed by fair use. These limits are needed not because contracts that exclude copyright exceptions are necessarily unfair, but because of the public interest in ensuring that exceptions to copyright can be used in practice. 
The Hargreaves Review understood this, and recommended (at paragraph 5.40) that UK law be changed "to make it clear no exception to copyright can be overridden by contract". The UK government accepted this recommendation, concluding in its response that an important factor in copyright reform would be "That unnecessary restrictions removed by copyright exceptions are not re-imposed by other means, such as contractual terms, in such a way as to undermine the benefits of the exception" (see http://www.ipo.gov.uk/ipresponse, p8).
I submit that it should not be possible to contract out of any exception, other than exceptions that formalise implied permission. 
If there are to be limits on the extent to which contracts can exclude exceptions to copyright, the limits should also apply to contracts that purport to exclude exceptions to the TPM circumvention provisions (such as s249(4) exceptions). In fact, limits on contracting out would highlight the problems inherent in the TPM provisions: it doesn't make a lot of sense to prevent a contractual condition excluding an exception to copyright when a TPM can be used to enforce exactly the same condition non-contractually.

I would be happy to discuss anything in this submission further.

Attachments
The following are my submission to the Attorney-General's review on TPM exceptions and a follow-up response to the submissions made in the second round of the review, as referred to in my submission above.

Review of Technological Protection Measure exceptions made under the Copyright Act 1968 

Submission 1: Circumventing access control technological protection measures that are used to enforce conditions on the use of a computer program contrary to Australian law 
It was clear when the TPM provisions of the Copyright Act were enacted that they would effectively eliminate most exceptions to copyright for digital material by permitting rights-holders to prohibit the actual use of the exceptions, even though the exceptions might remain notionally available. This has happened exactly as was predicted.
What was perhaps not as widely understood was the effect that the TPM provisions would have on Australians’ rights under other laws in ways that have little or nothing to do with copyright. In particular, the effect that they have had on Australian consumer protection laws as they apply to computer programs.
If an Australian consumer purchases software or a service involving the supply of software from a supplier in Australia, the consumer has access to the Australian Consumer Law and the full range of consumer protections. The supplier is required to provide certain guarantees, and cannot enforce unfair contract terms against the consumer. The TPM provisions of the Copyright Act do not prevent a consumer from relying on these protections to, for example, obtain a refund if a TPM results in software not being fit for purpose, prevent a supplier applying a TPM in a way that amounts to unconscionable conduct, or require a supplier to give undisturbed possession to software covered by a TPM.
If an Australian consumer purchases software from an overseas supplier the consumer will not have access to the full range of these protections (although the unfair contract term provisions of the Consumer Law don’t depend on the supplier being in Australia). It is commonly understood that an Australian who purchases software from an overseas online supplier is unlikely to have effective recourse against the supplier for a breach of Australian law even if the supplier is “doing business in Australia” and therefore in theory subject to laws such as the Consumer Law.
However, many such online software suppliers apply TPMs that allow them to exercise complete control over consumers’ use of the software. It is common for a supplier to apply TPMs as follows:
·	A TPM will prevent the user from using the software unless the TPM can connect to an Internet server (the TPM may require a constant connection or occasional check-ins). This allows the supplier to directly control the TPM, and prevent access to the software at will.
·	A TPM will prevent the user from using the software unless the user has agreed to be bound by a “licence agreement” containing a range of unreasonably harsh terms. Common terms include clauses requiring the user to indemnify the supplier, mandatory arbitration clauses, limitation of liability clauses, clauses purporting to exclude local law in favour of the laws of the supplier’s jurisdiction, etc. These kinds of terms are likely to be unenforceable in Australia. 
·	However, some of these kinds of terms can be enforced through the use of the TPM. If the user breaches them, or fails to comply with them, access to the software is prevented. Standard terms of this type include clauses giving the supplier, but not the user, complete discretion to modify the terms of the licence agreement, clauses permitting the supplier to modify the software (through online patches) at will, clauses that give the supplier the discretion to withdraw access to the software at will, etc.
·	The supplier may claim that the supply of the software is merely a “service”, “subscription” or “licence” rather than a product and that as a result consumer protections will not apply. This is unlikely to be correct under Australian law.
·	The TPM may also be used to enforce conditions of use that are not terms of the licence agreement or of any contract, and may not be disclosed to users.
·	The same TPM may be applied to multiple computer programs from a single supplier. If it prevents a user from accessing one of them, it may prevent access to all of them.
·	The supplier will not offer a refund or in any other way compensate the user for the user’s loss of access to the software in these cases.
·	A TPM that achieves the above will be part of, or indistinguishable from, the measure or component that prevents copyright infringement, meaning that it is likely to be an “access control TPM” under the Copyright Act.
Much of this would be unlawful or even subject to penalty under the Competition and Consumer Act if done by an Australian company. However, the TPM provisions of the Copyright Act produce the bizarre result that, if a foreign company tries to do these things, the Australian government will not merely permit it to do so but will help it to do so by requiring all Australians to comply with whatever conditions of use are imposed through the TPM.
Further, if an Australian software developer licenses the distribution of its software to a foreign company, and the foreign company supplies the software to Australians subject to a TPM, the developer will be able to take action (as the rights-holder) under the TPM provisions of the Copyright Act to enforce the conditions of use against Australian consumers while Australian consumers will have no effective recourse against anyone (since the actual supplier is overseas).
To give an example, the software company Valve runs a service called Steam that is used to supply software (mostly games). This service can be described as a combination of two related services: an online shop that supplies computer programs in exchange for money, and a free “subscription” service that allows a subscriber to connect to the Steam servers. A TPM generally prevents software sold through the shop from being used without connecting to these servers at least occasionally. In addition, some software obtained otherwise than through the shop uses the same TPM and also must connect to the Steam servers in order to be used. This TPM gives Valve complete control over the use of the software.
The Steam Subscriber Agreement (available at http://store.steampowered.com/subscriber_agreement/) contains a number of rather dubious clauses. See in particular clause 2 (which sets out the nature of the services), 3 (which provides that there will be no refunds, with the only apparent exceptions being for users in the EU), 9 (which allows Valve to amend the agreement at any time) and 10 (which is about account cancellation).
Recently this agreement was amended to include a number of new clauses, including a mandatory arbitration clause. Subscribers are given the choice of accepting or declining the change. Declining activates a TPM and prevents the use of all software that relies on Steam.
Circumventing the TPM is unlawful in Australia, and may be criminal in some circumstances. Providing a means to circumvent the TPM is also unlawful.
This result is highly unusual: the government is actively assisting a foreign company in using extra-legal self-help measures against Australian consumers in circumstances where it would be unlawful for an Australian company to do so. This cannot have been what the TPM provisions were intended to achieve.
The present review is too limited in scope to deal adequately with this problem. Presumably the ALRC’s copyright exceptions review will be examining the broader effects of the TPM provisions aside from the narrow section 249 exception that is the subject of the present review (and thus excluded by the ALRC’s terms of reference), but any recommendations it makes will not be implemented for years. In the meantime, it is appropriate to use section 249 to provide the following exceptions.
An exception for the act of using a computer program (including making a reproduction under section 47B(1) and (3) of the Copyright Act) where a TPM is being used to enforce a term of a contract that is an “unfair contract term” under the Australian Consumer Law, or to enforce a condition of use that would be an unfair contract term if expressed as a term of a contract.
An exception for the act of using a computer program (including making a reproduction under section 47B(1) and (3) of the Copyright Act) where a TPM prevents access to the computer program in a way that contravenes an Australian law (including the Australian Consumer Law and any law of a State or Territory), or would do so if the supplier of the computer program or the person who controls the TPM were doing business in Australia or the relevant State or Territory.
The relevant “person” for these exceptions is an “Australian consumer” (under the Australian Consumer Law).
Criteria for an exception:
(A) Is the work, performance or phonogram for which an exception is being sought protected under the Copyright Act?
Yes.
(B)(i) Is the use an infringement under the Copyright Act?
No. Simply using a computer program is not an act covered by copyright (section 31 of the Copyright Act).
Where using a computer program requires a temporary copy of the program to be made, the reproduction is covered by section 47B of the Act. This exception is qualified by section 47B(2)(b), which refers to an express direction or licence given by the copyright-holder when the user acquired the copy, but it is reasonable to assume that these references must be read as references to a lawful direction or licence (if this assumption is wrong, and an unlawful direction or licence does activate section (2)(b), then there are problems with the application of Australian consumer protection laws to supplies of computer programs that go far deeper than anything this submission can address).
(C)(i) Does the Copyright Act limit the non-infringing use to a certain type of user? (eg. Educational institutions)
No.
(D) Has an access control TPM been applied to the work, performance or phonogram? 
This submission covers those computer programs that are subject to an access control TPM. There are many computer programs in this category.
(E) Has the use of the TPM had an adverse impact on the non-infringing use by the person or body seeking the exception, or is it likely that it will have such an impact?
Yes. The exception applies only where the TPM is being used to deprive an Australian consumer of rights to non-infringing uses that the Australian consumer would otherwise have under Australian law.
It may well be impracticable to actually effect a circumvention in many cases covered by this exception. However, the Copyright Act does not require a submission to demonstrate the practicality of achieving the relevant circumvention; it would be unreasonable to require a submission to explain how to do something that is unlawful.
(F) Would the exception impair the adequacy of legal protection or the effectiveness of legal remedies against the circumvention of the TPM?
No.
A rights-holder who applies a TPM in a way that is consistent with Australian law will lose none of the protection or effectiveness of legal remedies against the circumvention of the TPM.
A rights-holder who applies a TPM in a way that is not consistent with Australian law would not in practice be able to make much use of Australian legal remedies against the circumvention of the TPM.
The fact that an Australian rights-holder can sell Australian distribution rights to an overseas company that applies a TPM, so that the rights-holder can enforce the TPM provisions against users while users have no effective rights against the supplier, is an anomaly that should be corrected. The legal protections and remedies in the TPM provisions of the Copyright Act would hardly be “inadequate” or “ineffective” merely because they failed to assist in the enforcement of an unlawful condition or the contravention of an Australian law.
Importantly, these exceptions would not permit circumvention merely because the supplier was requiring a consumer to accept an unfair contract term, or was engaging in unlawful practices. They would permit circumvention only to the extent that the supplier was using the TPM to enforce these things against the user.
A supplier who was unhappy about these exceptions would have two easy ways to avoid them: comply with Australian law when supplying software to Australians, or implement the unfairness-enforcing TPM separately from any TPM used to prevent copyright infringement so that the first TPM can be circumvented without circumventing the second.

Submission 2: Circumventing region locking systems on films
The Copyright Act's definition of "access control technological protection measure" includes a special exception for circumventing region-locking, as follows:
…but does not include such a device, product, technology or component to the extent that it:
	(c)	if the work or other subject‑matter is a cinematograph film or computer program (including a computer game)—controls geographic market segmentation by preventing the playback in Australia of a non‑infringing copy of the work or other subject‑matter acquired outside Australia…

This exception appears to have been included to give partial effect to recommendation 4 of the Committee on Legal and Constitutional Affairs’ 2006 report on Technological Protection Measures Exceptions, which was as follows:
The Committee recommends that region coding TPMs be specifically excluded from the definition of ‘effective technological measure’ in the legislation implementing the Australia-United States Free Trade Agreement.
Should the government include region coding TPMs within the definition of ‘effective technological measure’, the Committee recommends that exceptions proposed for region coding TPM circumvention under Article 17.4.7(e)(viii) be granted wherever the criteria for further exceptions under Article 17.4.7(e)(viii) are met.
(see http://www.aph.gov.au/binaries/house/committee/laca/protection/report/fullreport.pdf)
There are two significant problems with the exception in the Copyright Act.
First, it relies on the concept of “non-infringing copy”. This is a concept used to extract certain types of legally imported material from the definition of “infringing copy”, with the result that a copy of such material that is made legally overseas but imported into Australia without the licence of the copyright-holder is not an “infringing copy”.
This is okay for some types of material, such as computer programs and sound recordings (see the definition of “non-infringing copy”). Unfortunately, though, the Copyright Act does not contain a concept of “non-infringing copy” of a film. All copies of films imported into Australia without the licence of the copyright holder are “infringing copies” unless the importer could have made it themselves without infringing copyright (which will never be the case in circumstances where the exception is intended to apply). This appears to have resulted from the special treatment of commercial parallel imports of films, but it is true even if:
·	The copy was made overseas legitimately,
·	The copy was imported for personal use, which does not infringe copyright, and
·	The film is used in Australia only in a way that does not infringe copyright.
That is, a copy of a film that someone imports into Australia for their own personal use will almost always be an “infringing copy” even if it has never been involved in any kind of copyright infringement. The exception in section (c) of the definition of "access control technological protection measure" has no meaningful application to films (aside from a speculative and probably unintended possible application to some online streaming video services). Actually, the way the whole of the Copyright Act applies to films imported for personal use is a bit of a mess.
The second problem is that, even if the exception did work, it would apply only to copies acquired outside Australia. It is not clear what this means, but it could be interpreted as including only copies that the user personally acquires overseas then brings back with them.
If this is correct, it is not clear why this limitation was included as it is not part of the Parliamentary Committee’s recommendation and it is apparent from the discussion in the Committee’s report that the recommendation was not intended to be limited in this way.
The limitation is probably of little relevance anyway, because of the basic problem described above and also because in practice a region-locking measure covering a copy of a film will not be able to tell whether a person trying to circumvent it personally went overseas and brought the copy back, or imported the copy some other way. Still, there is no sensible reason to distinguish between copies of films on this basis.
Submission:
An exception for the act of watching a cinematograph film, to the extent that an access control TPM that controls geographic market segmentation prevents the act.
The relevant person for this exception is: any Australian.
Again, this exception will not deal adequately with the problem. But it is necessary as an interim measure while we wait for the ALRC’s review.
Criteria for making an exception:
(A) Is the work, performance or phonogram for which an exception is being sought protected under the Copyright Act?
Yes.
(B)(i) Is the use an infringement under the Copyright Act?
No. Watching a film is not an act included in its copyright (Copyright Act, section 86).
(C)(i) Does the Copyright Act limit the non-infringing use to a certain type of user? (eg. Educational institutions)
No.
(D) Has an access control TPM been applied to the work, performance or phonogram? 
Many films (especially in the form of DVDs and Blu-ray discs) have region-locking access control TPMs applied to them. This submission covers those films that are subject to such access control TPMs.
(E) Has the use of the TPM had an adverse impact on the non-infringing use by the person or body seeking the exception, or is it likely that it will have such an impact?
Yes.
Many people have foreign DVDs (or films in other formats) that they cannot watch without either using a region-free player or using up the limited number of times that a computer’s disc drive can be region-switched. They may have obtained the foreign versions of a film because the film is not available in Australia, is not available in Australia in the user’s language or is being used for language learning, or just because geographic market segmentation always seem to result in Australians paying much higher prices for everything.
The copies may have been personally brought back from overseas, purchased online from overseas or received as gifts. None of these ways of acquiring a film infringes the copyright in the film.
Note that the exception in this submission must not require the copy of the film to have been made legitimately in a particular country. While this may seem like a reasonable condition, under section 116AN of the Copyright Act a person seeking to rely on an exception must prove that the exception applies, and it would be practically impossible for a defendant to prove that a particular copy of a film was made under the appropriate licences in accordance with the law of a foreign country. It may be reasonable to require the person relying on the exception to prove that the copy appeared to have been made legally outside Australia, although this would achieve little as any actual pirated copy will have had the region coding removed.
(F) Would the exception impair the adequacy of legal protection or the effectiveness of legal remedies against the circumvention of the TPM?
No.
Section (c) of the definition of “access control technological protection measure” makes it clear that the TPM provisions of the Copyright Act were not intended to provide legal protection or remedies for the kinds of measures described in that section, even if the section fails to give effect to this intent for the reasons discussed above.
A region-lock TPM has no way of telling whether a copy of a film from overseas was acquired overseas personally by the person attempting to use it, was acquired in Australia from overseas or was acquired in Australia as a result of some other person importing it or acquiring it overseas. If there is no legal protection or remedy against a circumvention of the TPM to use a copy acquired overseas by the person who is using it, there seems little point in pretending that there are effective legal protections and remedies against a circumvention of the TPM to use a copy acquired within Australia.
No doubt it will be argued that region-locking TPMs are effective measures against copyright infringement consisting of commercial importation and sale (section 102 and 103 of the Copyright Act). This is not the case; a region-locking TPM cannot stop a film being imported or sold, and is not effective in preventing its use within Australia due to the entirely legitimate presence here of foreign-coded disc players and region-switched computer disc drives.

Submission 3: Circumventing region locking measures on computer programs
Section (c) of the definition of “access control technological protection measure” has at least some application to computer programs, because there is such a thing as a “non-infringing copy” of a computer program. Still, it may be necessary to extend this exception to cover computer programs imported for personal use but not personally carried into Australia. The arguments in the previous submission apply here as well.
Submission:
An exception for the act of using a computer program (including making a reproduction under section 47B(1) and (3) of the Copyright Act) to the extent that an access control TPM that controls geographic market segmentation prevents the act.
The relevant person for this exception is: any Australian.
Criteria for making an exception:
(A) Is the work, performance or phonogram for which an exception is being sought protected under the Copyright Act?
Yes.
(B)(i) Is the use an infringement under the Copyright Act?
See submission 1.
(C)(i) Does the Copyright Act limit the non-infringing use to a certain type of user? (eg. Educational institutions)
No.
(D) Has an access control TPM been applied to the work, performance or phonogram? 
Many computer programs, especially games, have region-locking access control TPMs applied to them. This submission covers those computer programs that are subject to such access control TPMs.
(E) Has the use of the TPM had an adverse impact on the non-infringing use by the person or body seeking the exception, or is it likely that it will have such an impact?
Yes. The reasoning in submission 2 applies equally to computer programs.
(F) Would the exception impair the adequacy of legal protection or the effectiveness of legal remedies against the circumvention of the TPM?
No. The reasoning in submission 2 applies equally to computer programs.

REVIEW OF TECHNOLOGICAL PROTECTION MEASURE EXCEPTIONS UNDER THE COPYRIGHT ACT 1968
Further submission in response to second-round submissions
1) General comments
The Copyright Act, other than the TPM provisions (i.e. s116AK-116D, 132APA-132APE, s249(4)), establishes a balance between the interests of copyright-holders and the public interest in the free flow of information and the rights of individuals to enjoy the use of their property without arbitrary interference. However, as the APA's submission says, TPMs "cut across exceptions". If a particular work or subject-matter exists only in a form covered by a TPM that prevents the use of the exceptions that contribute to the balance of rights, then those exceptions have little or no effective application to that work or subject matter. As more and more material is available only in TPM-encumbered digital form, the exceptions in the Copyright Act are becoming less and less relevant and the balance is being overturned.
For all of its many limitations, the s249(4) process is the safety valve that provides some scope for copyright exceptions to survive the introduction of TPMs. A decision to give this process a narrow application is in effect a decision to abolish fair dealing and most other exceptions as they apply to material covered by TPMs. 
For this reason, submissions that seek to place arbitrary legalistic obstacles in the way of the process, or that argue for the extension of the TPM scheme to cover the protection of "business models" as well as copyright, should be rejected.
2) The nature of the s249(4) process
Many of the second-round submissions argue for first-round submissions to be rejected on the basis that they fail to satisfy some technicality of the review process.
The fact that this process is not an adversarial one with one side bearing some particular burden of proof is well demonstrated by the procedure chosen for the review, which departs significantly from the standards of procedural fairness that would be expected to apply in an adversarial context. Rather, all the Act requires is for a submission to activate s249(4)(a), and once this has been done the rest of the criteria are open to be satisfied by whatever means the Attorney-General thinks appropriate, including independent inquiry. Considering that many submissions have been made by individuals (who may or may not have any legal training) or organisations advocating on behalf of diffuse public interests, and that these submissions are opposed by representatives of large commercial organisations with considerable resources, it would frustrate the purpose of s249(4) for the first-round submissions to be interpreted narrowly or dismissed because of some technicality. The TPM provisions are already a pretty extreme example of regulatory capture; there is no need to make them any more skewed they already are.
Two matters in particular stand out from the second-round submissions.
First, there is an argument that submissions that do not identify a class of works or subject matter recognised specifically by the Act (e.g. cinematograph films, literary works, sound recordings) should be reejcted. Against this is the submission by CAG and others that any class that can be sensibly identified can meet the requirement. 
The Copyright Act does not require a narrow concept of "class" to be applied, and to do so would be to place a legalistic obstacle in the way of the operation of s249(4) for no identifiable benefit.
Also, most of the existing exceptions in the Copyright Regulations identify classes by implication (in a way consistent with CAG's submission), and the guidance material for this review did not mention any requirement at all for submissions to identify a class of material. It would be grossly unfair to reject submissions for failing to do something that they were not asked to do in order to satisfy a criterion that they could not have predicted would apply.
In considering whether to prescribe an exception, the Attorney-General should adopt the approach to classes suggested by CAG.
If a narrower approach is adopted, anyone who made a submission that does not satisfy the class requirement should have the opportunity to restate their submission having identified a class. Alternatively, the Attorney-General could read down submissions so as to identify a suitable class which satisfies the other criteria, or split submissions and deal with them separately to the extent that they relate to separate classes.
Second, there are arguments that the first-round submissions failed to include sufficient evidence, or included "anecdotes" by way of evidence. This is not surprising, considering that the guidance material referred only to "examples". If the Attorney-General intends to reject submissions that fulfill the requirements of the guidance material by providing examples on the basis that they are not supported by sufficient evidence, submitters should be given the chance to provide further evidence (and more guidance should be given on what form of evidence is expected), or the Department should conduct its own research. It would only compound the imbalanced nature of this process to impose onerous or expensive requirements for evidence on submitters.
I will now address in more detail some of the arguments made in the second-round submissions
3) Various submissions: TPMs used to protect business models
A number of the second-round submissions (particularly the APA submission) argued that part of the purpose of the TPM provisions of the Copyright Act is to protect business models even when this has little or nothing to do with protecting copyright. One consequence of this interpretation would be that the "protection and effectiveness of the remedies" that must not be impaired, as referred to in s249(4)(e), extends to protection and remedies against any act of circumvention that threatens a business model, regardless of whether it has anything to do with an infringement of copyright.
There are good reasons for rejecting this argument, and intepreting s249(4)(e) as applying only to protections and remedies against circumventions performed for the purposes of copyright infringement.
First, the interpretation that favours protecting business models greatly increases the damage that the TPM provisions do to the exceptions in the Copyright Act.
Second, the business models that would be protected would be those that rely on preventing the use of fair dealing and any other exceptions to copyright. This would be clearly undesirable.
Third, this interpretation would leave the TPM provisions resting on uncertain constitutional foundations. I am not sure that extending their application to the protection of business models would be supported either by the copyright power or by the treaties power via the "Intellectual Property Rights" chapter of the AUSFTA.
The Attorney-General should take only protection against circumventions for the purpose of copyright infringement into account in assessing whether submissions meet s249(4)(e). Since s249(4) exceptions cannot be used to excuse infringing acts, this suggests that the criterion in s(4)(e) should be met unless a proposed exception is so broad that it would make the TPM scheme ineffective in regard to a class of works or subject matter.
4) Various submissions: what is meant by "controls access"
It is argued that many of the first-round submissions are irrelevant, because they relate to things done after access is granted at which point an "access control" TPM is no longer relevant (see e.g. page 5 of the APA's submission). I see no reason why the Copyright Act would be interpreted this way; the expression "controls access" appears to have been chosen because it is capable of applying both to TPMs that prevent access and to TPMs that impose conditions on use while material is being accessed or after it has been accessed. 
It seems to be because of this narrow reading that some submissions (e.g. the APA's again) argue that a PDF cannot be considered to be an access control TPM. I see no reason why this should be the case, if the PDF format is used "in connection with the exercise of the copyright", as the PDF system clearly controls access to the work by requiring it, in the normal course of use, to be obtained through a PDF reader. Arguably any action (including, of course, a non-infringing action) that results in the work, or any part of it, being accessible in some other way could be regarded as a circumvention, especially because the Copyright Act does not require that an access control TPM be "effective".
Indeed, one interpretation of the TPM provisions is that they create a new exclusive right of access (covering also use during access, and reproduction) to any copyrighted material that is covered by a TPM, with the scope of the exclusive right being limited only by any acts that the TPM is not designed to prevent and by the few exceptions to circumvention that are permitted (and not, of course, by any exceptions to copyright). 
Judging by the submissions from educational and cultural institutions, this is how the TPM provisions are being interpreted and applied in practice. It is possible that a court would give the TPM provisions some kind of narrower reading, but by no means certain. Until these provisions have been judicially considered, it would be a brave IP lawyer who would advise that TPM-protected material can safely be used or reproduced in any way that the TPM could possibly be seen as having been designed to prevent or control, even if the TPM is not particularly effective in doing so. 
The need for s249(4) exceptions, and the "adverse impact" referred to in s249(4)(d), arise in large part from the potentially great breadth of the TPM provisions and the uncertainty of their application.
5) AFACT/AHEDA submission: "acquired overseas"
AFACT/AHEDA appear to misunderstand my submission on geographic market segmentation. I am not sure what AFACT/AHEDA means by "Both those types of works or subject matter are exempted from the TPM scheme (see definition of “access control technological protection measure” in s 10 of the Act)" but assuming that their point is that region-lock TPMs for films and software are excluded from the definition of "access-control TPM", it is not at all clear that they are correct. The reasons for this are set out in my previous submission: only region locks for copies "acquired overseas" are excluded. This could be interpreted to mean only copies that the relevant person brings back personally from another country. My submission related to whatever types of copies are not covered by the "acquired overseas" condition.
6) AFACT/AHEDA submission: "non-infringing copy"
The AFACT/AHEDA submission is correct that the "non-infringing copy" scheme does not apply to films. The term "non-infringing copy" has no meaning in regard to films. The problem is that the exception in s(c) relies on this term, and without a definition it is not clear how the exception operates. This may have been an error. My submission explains the problems with interpreting "non-infringing copy" of a film to mean the inverse of "infringing copy", i.e. that this would result in the s(c) exception not covering any copy of a film imported by an individual for personal use, which would defeat the entire purpose of the exception.
As I said in my submission, a s249(4) exception will not solve this problem adequately. The definition needs to be changed to recognise the different ways that commercial and non-commercial parallel importation are treated under the Act. But a s249(4) exception is better than nothing.
However, if the report on this review can explain how it is possible for an individual to bring a copy of a film into Australia for personal use without the copy ceasing to be a "non-infringing copy" and thus ceasing to be covered by the s(c) exception, I will happily withdraw this submission.
7) Business Software Alliance submission: geographic market segmentation
The BSA states that this proposed exception is already adequately provided for in the Copyright Act. I am not sure that this is the case, again because of the "acquired overseas" limitation. This exception is intended to apply where a person seeks to use a non-infringing copy of a piece of software that he or she did not personally travel overseas to acquire. 
8) Business Software Alliance submission: unfair contract terms and remedies
The BSA submits that the range of remedies under the ACL are sufficient to remedy a breach of the ACL. However, this exception would be used as a defence in proceedings under the TPM provisions, where it may not be possible for all of the remedies under the ACL to be considered or applied. Also, it is most likely to arise where an online software provider based overseas applies a single standard form contract to customers all over the world, and will probably be impossible for proceedings to be instituted against such an entity in an Australian court even though they would probably be "doing business in Australia".
However, if this part of the BSA's submission is accepted, the proposed exception could be limited to cases where remedies under the ACL are unavailable because the supplier of the computer program is outside the jurisdiction of the ACL, as discussed in my submission.
9) Business Software Alliance submission: infringement
The BSA states that "neither the ACL, the Copyright Act nor any other law provides for any exception or statutory licence to permit the consumer to engage in act that would otherwise infringe copyright because of a breach of the ACL in a license or other contract term associated with the copyright work". This is correct as far as it goes, but this proposed exception only covers use (which is not an infringement in itself) and temporary reproductions for the purposes of use (which are covered by the exceptions in s47B).
In my submission I argued that a direction or licence agreement that claims to active s47B(2) but is void or unlawful should be regarded as ineffective in excluding the s47B(1) exception, regardless of whether it is contractual in nature. Even if this is not accepted, any unfair contract term contained in a contractual licence to make temporary reproductions would still be void, and the licence provided by the contract will be available despite that term. Using the software in accordance with the licence, ignoring the term that is void, will not infringe copyright.
The BSA's argument should be rejected, for the reasons described above and also because it would be absurd for the law to recognise a self-help measure for enforcing a condition of use through technical means when the legislature has decided that an identical condition should not be enforceable as a term of a contract.
10) Business Software Alliance submission: "claims"
The BSA states that "this proposed exception, if made, could therefore be claimed by anyone who circumvents a TPM and who then asserts that a related contract term is in breach of the ACL, until the enforceability of the particular contract term claimed was resolved in court". 
It is not clear what the BSA means when it says that the exception could be "claimed". The exception is a defence that must be proved in court action under the TPM provisions, where it may also be possible to decide on the enforceability of the relevant contract term. The exception does not provide a positive right to circumvent a TPM. If a person seeking to rely on this exception wanted certainty they could apply for a declaration under s250 of the ACL (although even without such a declaration an unfair term of a standard form contract is void by force of s23). The argument that an exception should not be prescribed where it could be "claimed" to apply in a case where in fact it does not misunderstands the nature of these exceptions and would, if applied generally, exclude any exception whose application depends on a question of law. Clearly this test was not applied to the existing exceptions in the regulations, and it should not be applied here.
In any case, it's not clear how this argument is relevant to any criterion of the s249(4) test. It cannot be relevant to s249(4)(e), as the possibility of someone incorrectly "claiming" to be covered by an exception is irrelevant to the question of whether the protections and remedies are effective against them.
11) Business Software Alliance submission: further arguments
The BSA makes three further arguments:
1. That the act is an infringement of copyright: this is not the case, for the reasons discussed above.
2. No adverse impact has been credibly demonstrated: this argument raises again the standard of evidence required for an exception, which I have addressed above. My submission contains an example, as requested by the guidance material. For further examples, see any "terms of use" document for any other online games service (e.g. see clause 13 etc. of the Xbox Live terms of service at http://www.xbox.com/en-GB/Legal/LiveTOU and clause 14 etc. of the Playstation Network terms of service at http://legaldoc.dl.playstation.net/ps3-eula/psn/e/aunz_tosua_en.html). However, I realise that most of the examples I have been able to find relate to games, which is probably because of differences in the business models used to supply games versus other types of software. If necessary this exception could be confined to computer programs that are games, which seems likely to deal with many of the BSA's concerns.
3. Circumvention could be undertaken to facilitate copyright infringement under the guise of seeking redress for an unfair contract term: I am not sure what this argument means. As I said in my submission, I doubt that the protection and remedies of the TPM provisions would in practice be available to defend an unlawful practice, except in a particular anomalous (and probably very rare) case. Even if the protections and remedies were available, this exception would not prevent their use against a person who circumvented a TPM for the purposes of infringing copyright. And any argument that this exception fails to comply with the criteria because a circumvention covered by the exception could conceivably also be a circumvention for the purposes of copyright infringement should be rejected, as by this logic no exception could ever be prescribed.
As stated in my submission, this exception would be insufficient to deal with the damage that the TPM provisions have done to consumer protection laws and their application to software. But it would be a useful first step.
12) Confidential submission
I note that one of the second-round submissions is confidential. I hope that if it raises any arguments against my first-round submission that I will be given a chance to respond. Actually, this makes me wonder what would have happened if I had made by first-round submission confidentially - would anyone have had a chance to respond to it? It's hard to believe that it would be considered appropriate to provide a new exception without the rights-holders likely to be affected by it being given the opportunity to comment, and submissions should not be refused on the same basis.
Really, the only thing that can save this rather flawed process is for a document to be published setting out which exceptions are granted and which refused, and why, and a further round of submissions invited.