166. B Scott

Subject: Submission to IP Issues Paper 42

Dear Executive Director,

Submission to Issues Paper 42 

*** About submitter and this submission

I am a lawyer, based in Sydney.  I was admitted to practise in 1993.  I first worked for Mallesons Stephen Jaques (now King and Wood Mallesons) then for Gilbert & Tobin, each in Sydney.  In 2003 I established my own firm.  My work relates to negotiating agreements in relation to technology and associated commercial advice, including, for example, giving advice on copyright infringement and the tracking of intellectual property within organisations.  I am a past president of the NSW Society for Computers and the Law and a previous editor of their journal.  I am a current editor of the Free and Open Source Software Law Review and of the Butterworths Internet Law Bulletin.  I make this submission on my own behalf. 

This submission is primarily directed at questions 1 and 2 of the Inquiry.

*** Background
Given the broad scope of the issues paper I am not in a position to respond in particular on each of the questions asked.  I propose, instead, to respond in short form, with an emphasis on underlying principles to be addressed.  Broader arguments supporting these principles are set out in more detail as referenced. 

I have used the term “work/works” in this submission as a convenience.  All references to “works” should be read as a reference to any material in which copyright subsists. 

*** Comment on discussion paper
The paper includes a handful of references to “reduced recognition that copyright is a form of property” (para 7) and similar phrases.  In my experience, the only people I have ever encountered which have discussed copyright as property are those with a vested interest in that characterisation.  I do not believe there is,or has been, a general perception in the community that copyright is property.  I believe most people have been either ignorant or contemptuous of the copyright law, as much is evidenced by the reported rates of copyright infringement.  

Question 1(c) discusses costs or inefficiencies on users/creators etc of copyright works.  However, the main costs created by the Copyright Act are compliance costs.  These costs are borne by everyone (eg maintaining an IP register), not just users/creators.  
Reference: http://brendanscott.wordpress.com/2012/11/16/ip-issues-paper-42-costs/

*** Owners v Users should be abandoned
Reference: http://brendanscott.wordpress.com/2012/11/16/ip-issues-paper-42-reframing-the-owners/

The bar for the subsistence of copyright is very low.  The great majority of people within Australia are, technically “copyright owners”.  However, these copyright owners are almost completely unrepresented, with policy set by a tiny minority of vocal, well financed copyright owners.  Indeed, this vocal minority traduces the majority of copyright owners, their interests and those which best represent them.  The historical distinction between “owners” and “users” is no longer relevant today.  Policy makers should recognise that content production is now being overtaken by the silent majority of copyright owners and laws should shift to recognise their interests. 

*** More Weight Should be Given to those Representing the Copyright Majority
Reference: http://brendanscott.wordpress.com/2012/11/16/ip-issues-paper-42-reflecting-the-views-of-owners/

Policy makers ought to give much more weight to the views of those organisations primarily responsible for the creation and dissemination of content by the copyright majority – that is, organisations such as Google, Wordpress, Firefox, Sourceforge, Github, Blip.tv and so on.  These organisations are responsible for assisting or facilitating the creation or dissemination of orders of magnitude more copyright works by the copyright majority than are produced by the copyright minority. 

Conflicts note: While I hold accounts with some of these services, but have not been engaged for reward by any companies associated with them. 

*** After markets - Copyright Ought to be more Property Like
Reference: http://brendanscott.wordpress.com/2012/11/16/ip-issues-paper-42-after-markets/

Copyright gives copyright holders the ability to control after markets for the things they sell.  For example, a person who sells computer software is able, despite that sale, to prohibit that software from being rented out by the purchaser.  Such an approach in relation to physical property would be unacceptable.  By allowing control of after markets the copyright law both strips actors in the economy of the certainty they need to make economic decisions and imposes increasingly large transaction costs on all participants in the economy.  When a person buys an article in which copyright works are embedded they do not have the same scope of possibility open to them as they do when they buy property.  

This control of aftermarkets occurs through the grant of licences in relation to those aftermarkets.  This means that the rules governing the aftermarket of each article is different depending on the article (the rules are determined by the licence terms).  In turn, this means any use of articles involves a substantial transaction cost (ie construing the licence terms) to determine the scope of rights, let alone secure permission to engage in after market activity.  This structure may be sustainable where there are a small number of copyright holders setting terms, but will be unsustainable in the general case.  

*** Moral Rights:
Reference: http://brendanscott.wordpress.com/2012/11/16/ip-issues-paper-42-moral-rights/
There ought to be broad based exceptions to moral rights where a work is made public.  To the extent rights protecting a person's individuality, spirit or honour are appropriate they should be the subject of sui generis legislation and not grounded in copyright.  

*** Principles:
Copyright policy should recognise that the underlying nature of the production of works is in flux.  Policy should attempt to foresee how the production of works will evolve and assist the transition of existing businesses.  The purpose of copyright law should not be to preserve existing businesses, industries or business models.  Existing businesses, industries and business models should be given incentives to adapt to the new environment.  

To the extent that copyright law makes ordinary practice illegal, or criminal, there should be a measurable objectives being sought to be achieved, and the continued illegality ought to be dependent upon the achievement and continued maintenance of that objective. 

Exceptions to the copyright law ought to be structured in a way which permits after markets to be established. 

So far as is possible, principles for the development of the copyright law ought to be amenable to measureable outcomes.  Reviewing statistics published by copyright interest groups there has been, for example, no meaningful decline in infringement despite repeated extensions to the Copyright Act over the past 10 years.  Equally, there is evidence from the United States that the production of musical works has increased over the past 10 years.  There should be a rejection of “lobbynomics” per the UK's Hargreave Report. 

Yours faithfully, 

Brendan Scott

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Brendan Scott IT Law Open Source Law http://www.opensourcelaw.biz Liability limited by a Scheme approved under Professional Standards Legislation