Communications, Entertainment & Technology Law Committee

Copyright and the Digital Economy 
Issues Paper 42

5 November 2012

Submission to the Australian Law Reform Commission

1.1.	
About NSW Young Lawyers
NSW Young Lawyers is a division of the Law Society of New South Wales. Membership of NSW Young Lawyers is free and automatic for all NSW lawyers under 36 years and/or in their first five years of practice, and law students. Membership of its committees is voluntary.
The Communications, Entertainment & Technology Law Committee (collectively referred to as we, us, CET or the Committee) aims to serve the interests of lawyers, law students and other members of the community concerned with areas of law relating to:
•	information and communication technology (including technology affecting legal practice);
•	intellectual property;
•	advertising and consumer protection;
•	confidential information and privacy;
•	entertainment; and
•	the media.
As innovation inevitably challenges custom, CET promotes forward thinking, particularly about the shape of the law and the legal profession as a whole.
Contributors to our written submission included Leah Egiziano, Patrick Gardner, Aemelia Grounds, Liam James, David Larish, Chloe Martin-Nicolle, Matt Morosin and Richard Prangell. 
The submission was compiled and edited by Annabel Clemens with thanks to CET Submissions Officer, Stephen Chang. 
If you have any questions about our submission, please contact Ju Young Lee, Chair of CET, at cet.chair@younglawyers.com.au.

Ju Young Lee
Chair, Communications, Entertainment & Technology Law Committee
NSW Young Lawyers

1.	
Introduction
1.1.	We thank the Australian Law Reform Commission for the opportunity to participate in an open discussion on how the government, industry and the community can work together to address the challenges and risks arising from greater digital engagement and copyright law reform.
1.2.	Our submission addresses a number of the ALRC’s questions, as noted in the Table of Contents. Briefly, the Committee believes that Australian copyright law:
(a)	needs to be simplified;
(b)	needs to be clarified;
(c)	needs to allow for changing technology by the use of technology-neutral drafting; and
(d)	needs to create and maintain a balance among: 
1.2.d.1.	copyright owners’ rights; 
1.2.d.2.	encouragement for creators; and 
1.2.d.3.	access for users. 
1.3.	Generally, instead of pursuing the enforcement of copyright to exclude or prevent the display or use of protected material, we have the opportunity for copyright law to assist and enable the copyright owners to generate a revenue stream from their works. Australian copyright law can provide the framework under which authors have an exclusive right to monetise their works, and encourage and require continued innovation.
Table of Contents
1.	Introduction
2.	Table of Contents
3.	Question 2
4.	Question 3
5.	Question 4
6.	Question 5
7.	Question 6
8.	Question 7
9.	Question 9
10.	Question 10
11.	Question 11
12.	Question 12
13.	Question 13
14.	Question 14
15.	Question 15
16.	Question 16
17.	Question 17
18.	Question 18
19.	Question 19
20.	Question 20
21.	Question 21
22.	Question 22
23.	Question 23
24.	Question 24
25.	Question 25
26.	Question 26
27.	Question 35
28.	Question 36
29.	Question 37
30.	Question 38
31.	Question 45
32.	Question 47
33.	Question 52
34.	Question 53

2.	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?
Introduction
2.1.	Intellectual property law has gained increasing significance and greater public awareness with the evolution of the digital economy. The dawn of the twenty-first century has witnessed a struggle for identity and supremacy between the laws and institutions of the pre-digital environment. This struggle encompasses entire heads of constitutional power such as telecommunications, copyright and international trade regulation.  Frameworks outside of the legislative sphere, such as codes framed by communication and standards bodies and the practices of high tech manufacturers are being scrutinised. The struggle is raising questions about the laws and institutions of the pre-digital economy and the form they should take in the information age.
2.2.	The economic benefits of copyright law are sometimes questioned. It is often assumed that copyright protection is essential to fostering investment and ensuring optimal research and development of resource allocations. The social losses imposed by the monopoly exploitation are recognised, but the loss is balanced by the fact the rights are available for a limited period. In contrast, a report commissioned by the United Kingdom states that these economic principles cannot form the basis for copyright law as copyright inhibits cultural development and inefficiently diverts investment. 
2.3.	Copyright law is frequently described as complex. Speaking extra-judicially, French CJ considered intellectual property law viewed via the principles of public law as being akin to participating in a wrestling match with Proteus. The substantive law in Australia has been described by parliament as a ‘muddle’ for ordinary citizens, the legislation being ‘impossible to understand, dense, and impenetrable’. 
Response to principle 1: Promoting the digital economy
2.4.	Despite increasing awareness of copyright protection, the digital age has only heightened the difficulties associated with defining and enforcing protections against infringement. Likewise, utilising exceptions to protect the public interest has become an increasingly complex area of law fraught with uncertainty. The purpose and attributes of copyright protection do not appear to succumb to a consistent set of legal or economic theories.
Response to Principle 2: Encouraging innovation and competition
2.5.	Sir Isaac Newton reflected: ‘If I have seen further than other men, it is by standing on the shoulders of giants’. It is important that knowledge at all levels in the digital economy can be properly protected, but it is equally important that the same protection does not obstruct innovation and growth. 
Response to Principle 3: Recognising rights holders and international obligations
Model law possibility
2.6.	A model copyright law or principles could help to enlarge upon international treaty obligations. Drafters could articulate what they believe to be the ‘best’ rule based on the model principles, even if this rule conflicts with a treaty requirement, then a ‘second best’ rule might accommodate a compromise without losing a sense of the guiding principles.
Response to Principle 4: Promoting fair access to and wide dissemination of content
2.7.	For some, the creative commons existing in cyberspace is the ‘central institutional structure enabling the anarchist triumph’. Free software, such as Linux, is developed so that free access is available and modification is encouraged at every stage in the development process. Fast Lamarckian mode development allows each favourable acquired characteristic of others’ work to be inherited; defection is impossible so free riders are welcome. It was these principles which allowed Linux to flourish and overtake its proprietary rivals. Other examples include the fifty thousand volunteers (and growing) who have co-authored Wikipedia, and give it away for free; also SETI@Home involved 4.5 million volunteers contributing their leftover computer cycles to create the most powerful supercomputer on Earth.
2.8.	If the commons lead to overuse and destruction; the anti-commons leads to underuse and waste. Copyright restrictions limit artists’ abilities to sample and build on older works of art. According to Heller, the more common resources are divided into small, fenced-off lots, the more difficult it is to build something new. Innovation, investment, and growth end up being stifled. Lost opportunities to create are not easy to identify; however the effects of overuse are readily observable. 
Response to principle 5: Responding to technological change
2.9.	The removal of the physical constraints on information production and exchange has magnified the power of human thought and creativity and placed it at the centre of the digital economy.
2.10.	The physical world once imposed practical limits on copyright work. In the digital world there is:
(a)	no loss of quality when copying within a device or between devices; and
(b)	no degradation of work when being viewed or used.
2.11.	Viewings and uses of a work are now only limited by the storage capacity or bandwidth available to users. Technological advances have continuously increased storage and network capacities to a level where capacity concerns are no longer a limiting factor for the majority of digital works. Where capacity is a concern then technologists respond by inventing technology which reduces the digital size without detracting from the substance of the work.
2.12.	Copying data is an innate function of devices in the digital environment. On computer systems, files are often copied rather than moved. Even when a move operation is performed, the computer operating system must copy the file as a first step and then remove the source file as a final step. On a typical computer, the act of viewing a file requires the file to be first copied into memory. In the Internet environment, copying steps are replicated many times over as the image of a file from a remote computer is conveyed through a number of network nodes in order to service the request of an Internet connected device.
2.13.	Backups are commonly performed on digital devices, proliferating copies of digital works. Backups have a limited number of counterparts in the pre-digital environment. Master copies and duplicates were created for markedly different purposes. Modern backups perform the function of preserving data, minimising recovery time, facilitating the transfer of data between devices or simply tracking content at particular points in time. The use of files included in a backup may unintentionally change as time passes.
Managing copyright entitlements
2.14.	In the digital environment, people can freely view or make use of a work at any time, on any platform or at any place they choose. A work can be moved or copied to different devices, it can be converted into different formats and it can be placed in a location that is public or private. Whilst the Internet has been designed and built as a conduit to facilitate these processes of data sharing, copyright protection laws have arguably been framed to specifically prevent all of these processes except in circumstances where explicit authorisation is provided.
Response to principle 6: Acknowledging new ways of using copyright material
2.15.	The Hargreaves Review raised the concern that ‘widespread flouting of copyright through private copying in particular brings the law into disrepute’. Unlawful private copying tends to be tolerated where it is not commercially damaging; however law should be designed to apply in both commercial and non-commercial circumstances. 
2.16.	Arguably, the use of copyright to protect software has had some unanticipated effects. Menell explores the limitations and utility of copyright protection with respect to the market failures associated with the creation and diffusion of computer software. Moglen proposes that for Microsoft the ‘maintenance of control over the basic operation of computers manufactured, sold, possessed, and used by others represented profound and profitable leverage over the development of the culture’ and the resultant quality of the software was ‘disastrous’. Although a wealthy and powerful corporation employing an army of programmers, Microsoft could not afford the number of testers, designers, and developers required to produce ‘flexible, robust and technically-innovative software appropriate to the vast array of conditions under which increasingly ubiquitous personal computers operated’.
2.17.	Copyright has been utilised to promote various public policies. However, some public policies may not be consistent with the overarching purpose of copyright protection. For instance, traditionally, copyright law targets cultural objectives, but recent changes to the Copyright Act 1968 (Cth) (Copyright Act) to include an exception for the use of documents by competitor pharmaceutical companies have broadened that scope to include public health objectives. Whilst the public health objective of itself is clear, this purpose is entirely different to the traditional cultural objectives. The objectives of copyright protection are not clear and consistent.
Response to Principle 7: Simplify copyright law
2.18.	Francis Gury, the Director-General of WIPO suggests copyright is part of an instrumental approach for achieving public policies and that these policies depend on a wide range of legal areas: 
intellectual property is not an end in itself. It is an instrumentality for achieving certain public policies, most notably, through patents, designs and copyright, the stimulation and diffusion of innovation and creativity on which we have become so dependent and, through trad marks, geographical indications and unfair competition law, the establishment of order in the market and the countering of those enemies of markets and consumers: uncertainty, confusion and fraud.
Copyright in a digital environment
2.19.	Along with the potential for layers of copyright to exist in a single work, layers are apparent in the copyright protection itself. Some levels of copyright protection may be bypassed by exceptions or statutory licenses. It can be ambiguous whether an exception or license is intended to apply to some of the protection layers and in what circumstances. The term ‘ubercopyright’ was coined to describe copyright protection that has the potential to lock out uses that are provided for under exceptions to copyright protection or via statutory licences. For instance, certain technical protection measures can grant a protection level paramount to ubercopyright.
Judicial interpretation and copyright 
2.20.	Selecting a sole or dominant purpose to apply against a background of constantly changing technologies risks unintended consequences. Justice McHugh  observed that the legislative provisions were the product of a 'compromise agreed to, or forced upon, interest groups in the industry affected by the legislation.' Justice Kirby used Professor Ricketson's metaphor of 'the dance' and observed: 
the multiplicity of participants and interests now involved in its rhythms inevitably affect the contemporary judicial task of resolving contested questions of interpretation of the Copyright Act.
2.21.	The Convergence Review discourages Parliament from making legislation that ‘either favours or disadvantages any particular communications technology, business model or delivery method for content services’. The Review advocates a principles-based approach to avoid regulations that can become obsolete in a rapidly changing environment and to avoid unforeseen interpretations. Principles may assist courts in working their way through the compromises observed in the judgements discussed above; however, applying specific principles to changing technologies may result in unexpected results. 
Model law possibility
2.22.	A model law or principles document might provide useful guidelines. It could help with ambiguous provisions, apply the statute to circumstances that Parliament did not or could not have contemplated, or provide the principles behind provisions which are codified. Pamela Samuelson provides suggestions on the elements that could be included in a model law.
Use of appropriate and accurate evidence 
2.23.	According to the Australian Government Best Practice Regulation Handbook the guiding principle for government regulation is to ‘deliver effective and efficient regulation - regulation that is effective in addressing an identified problem and efficient in terms of maximising the benefits to the community, taking account of the costs’.
2.24.	The Hargreaves Report identifies two particular difficulties in the area of intellectual property law: ‘a near-total lack of high-quality evidence on some issues and an overabundance of effective lobbying’.
Response to Principle 8: Promoting an adaptive, efficient and flexible framework
2.25.	Copyright has been framed variously as a type of:
(a)	property right; 
(b)	public good; or 
(c)	contract. 
2.26.	Each of these models has limitations in the digital environment.
Copyright as property and exclusive rights
2.27.	Applying principles of property ownership to information can be illusory. Information is not confined to a particular space, particularly in a virtual world. In addition, information is not necessarily discrete or readily measureable. This characteristic poses challenges to the traditional principles and instruments of property management such as entitlement based on possession and registers recording ownership and dealing details.
2.28.	Software by its nature consists of bitstreams, regardless of the function it performs. It may be an operating system, a virtual operating system, an executable programs, music, visual art, weaponry or novel. These homogenous and indistinguishable bitstreams are subject to a variety of legal categories. This unstable diversity of rules is caused by the need to distinguish among kinds of property interests in bitstreams. This need to treat bitstreams as property arises from those who stand to profit from these socially acceptable forms of monopoly. Bitstreams are at the centre of the digital revolution, they make everything else possible, but propertarian regimes not only discourage innovation, they can detract from and inhibit what might have otherwise been possible.
2.29.	People will not recognize and much less observe rights unless the reasons for those rights and the boundaries defining such rights are definable and have a comprehensible moral basis. DVDs have sometimes carried a copyright warning message drawing on the analogy of the theft of a car. Chief Justice French speaking extrajudicially draws on the work of Professor Stevens and points out that this is weak because 'in a world which is not one of limitless abundance, we need rules for determining who is entitled to physical things, but these rules of first possession have little application to ideas or information which cannot be possessed.' Professor Stevens notes the anti-piracy message developed by the United Kingdom, which uses satire under the title 'You make the movies', to convey the proposition that infringing copyright deprives producers of the revenues that enable them to make good films.
2.30.	Production based on cooperative principles rather than propertarian principles are responsible for the famous stability and reliability of free software. Eric Raymond termed this ‘Linus’ law’ meaning that with enough eyeballs, all bugs can be discovered and resolved. Free access to source code puts the power to fix problems in the hands of every user, but ironically this means users rarely get the opportunity to fix a problem because someone else has already seen it and fixed it. 
2.31.	The economic success of free software has prompted economists such as Benklar to explore how thousands of free software developers have been able to successfully compete with the giants in the business and produce the GNU/Linux operating system. Benklar provides some economic observations about copyright as property.
2.32.	The assumption that proprietary strategies dominate in the production of information has many counter examples in education, the arts and in political and theological discourses. Even market oriented industrial R&D focuses on improving efficiency and customer relations without relying on proprietary claims of exclusion. The increasing dominance of the property model of copyright aligned with the rent-seeking lobbying of industrial producers contributed to major expansion in copyright protection in the 1970s and the 1990s.
2.33.	The expansion of copyright operates as a tax on non-proprietary models. Access to information is more expensive for all whilst increasing rights to exclusivity only benefits a few. Universities now pay royalties which impedes the information sharing that occurred in the past. Older films have been hidden from public view due to the cost and complexity of clearing the reach of the newly expanded rights which apply to every piece of footage or trademark that the camera happened to capture.	
2.34.	The technologies of information processing, storage, and communication have made non-proprietary models more feasible, reachable and attractive. Low-cost processors, storage media, and networked connectivity have made it easy for: 
‘individuals, alone and in cooperation with others, to create and exchange information, knowledge, and culture in patterns of social reciprocity, redistribution, and sharing, rather than proprietary, market-based production’.
2.35.	Peer production challenges conventional thinking about the economics of information production. It even challenges understanding of market and non-market roles. The rise of peer production is not an exception or a fad but is a response to the conditions created by the digital environment.
2.36.	When regarded as property, information shares some of the characteristics of public goods. Information is non-rival, it is used and not consumed and it is non-excludable as there is no limit to the number of people capable of consuming a piece of information. Public goods are often shared using property rights principles by granting individuals rights of use. 
2.37.	Dilemmas associated with public rights and public goods are no different when these principles are applied to information. Public goods have limited access to the influence of market mechanisms and this introduces the risk that they will be under or over produced. Governments tend to fund public goods, often by paying private parties, granting an exclusive licence, or issuing prizes and rewards. Payment is apportioned via taxes or subsidies. This model places the government in the position of market maker and decision maker. Arguably, government is not best placed for determining requirements for technological progress or the content of cultural consciousness. 
2.38.	The Australian Government's Convergence Report recommends support for Australian content forms including drama, documentary and children’s programs. PricewaterhouseCoopers Australia research proposes ‘content services enterprises’ should invest a portion of their revenue in Australian content or contribute to a fund. Determining who is a ‘content services enterprise’ would depend on whether the provider controls the content, delivers professional content and derives a high level of revenue from the content. Professional content is distinguished from other content, including user-generated content. User-generated content is portrayed by this report as amateur and the control of the provider is limited to removing the content. This report ignores the relationship user-generated content has with professional content and the user agreements between uploaders and providers which often provides for much more than take down arrangements. However, this report does allow that providers of user-generated content could become ‘content service enterprises’ in the future.
Copyright as a contract
2.39.	It is not always clear how far a creator needs to go in order to dismantle the effects of copyright protection. It is also not clear if the creator is able to override the exceptions and statutory licences provided by legislation. This is complicated by the effect of cross-jurisdictional issues and international protections.
2.40.	Copyright exceptions aim to remove unnecessary, dysfunctional or unreasonable restrictions imposed by copyright. Contractual terms often re-impose these restrictions and the intentions of the exceptions are not realised. As an example, if a library does not possess the encryption key to unlock encrypted material, content remains locked. Whilst the regulations allow for preservation activities, broader uses such as incorporating the work into a search engine may not be consistent with the specific preservation and administrative purposes outlined in s 51A. These uses may be covered by s 200AB, which provides for text and data mining to be used to develop a deeper understanding of a collection, but many contracts and licences seek to override these exceptions.
2.41.	The content of the licencing schemes aiming to dismantle the unwanted effects of copyright provide some insight into the complications and challenges involved in avoiding some or all components of copyright protection.
3.	
Question 3 	
What kinds of Internet-related functions, for example caching and indexing, are being impeded by Australia’s copyright law?
3.1.	Caching is afforded specific definitions within the Copyright Act, which are similar, but not identical. However, as alluded to within the Issues Paper, such definitions are limited to applying to entities defined as those “administering an educational institution,” or a “carriage service provider.” The potential inadequacy of the scope of the definition of “carriage service provider” has previously been the subject of attention from the Attorney General’s Department, and attempts to broaden this definition may correspondingly impact upon the scope of the exception contained within the Copyright Act.
3.2.	A second issue arises from the definitions, being that the purpose of any ‘caching’ reproduction must be to provide efficient access ‘to that material’ or ‘to the works and other subject-matter.’ These terms are in some ways ambiguous. Although the process of caching is essentially the reproduction of copyright material, the definition does not make it sufficiently clear whether the facilitation of efficient access is to the original material, or the reproduced version. In circumstances where the caching of material serves to supplant access to the original material, this exception may therefore not apply.
3.3.	Practically speaking, the impact of such a distinction can have serious consequences. While some entities use caching to allow the searching of, and access to, the original copyright work (such as, for example, Google Image Search, which has nevertheless encountered resistance and litigation as a result of its activities), other caching services do so in specific circumstances whereby the original work is not accessed (such as, for example, where it is no longer available, or for historical purposes). Both types of service can have great utility, in providing efficient access, historical data relating to a site, or access to an otherwise inaccessible site.
3.4.	However, in circumstances where much of the profits of a website can be driven through advertising which is based upon the number of ‘hits’ a website receives, and in circumstances where the profits of a search engine can be driven through the same business model, a tension arises as to who receives the ‘hit’ for the serving of the cached content. 
3.5.	By providing a cached copy of a website rather than access to that site, it may be argued that such a service provider is ‘hijacking’ the user and thereby preventing the underlying content creator from benefiting from their work. 
3.6.	Caching of websites can offer a range of benefits for both content owners and consumers. Where caching allows for efficient access to a site, both consumers and content-owners can benefit. Where caching provides further information as to the historical state of a site, or where caching can assist in providing access to an otherwise inaccessible site, the consumer will benefit. 
3.7.	However, where caching discourages or prevents access to the underlying work, the ‘cacher’ will benefit, and arguably, both the content owner and the consumer may be harmed – the owner through being denied the “hit” and potential advertising revenue that can be collected from a consumer’s visit to a site, and the consumer through being provided a potentially out of date version of the content they sought.
4.	
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?
4.1.	Any exception provided for caching has to take into account the benefits and risks for both users and content-owners accordingly.
4.2.	While the purposive approach currently utilised by the Copyright Act to some extent serves its purpose, it is hampered by its restriction to specific types of entities who are permitted to “cache content.” Other entities, relying upon the uncertain provisions of s43A and s43B, are in a far less certain position. 
4.3.	Accordingly, we recommend that the exceptions for caching within the Copyright Act be broadened and unified to allow for caching wherever it is done to provide efficient access to underlying works. 
5.	
Question 5
Is Australian copyright law impeding the development or delivery of cloud computing services?
Summary: Question 5 should be considered from both the enterprise perspective and also a personal user perspective.
5.1.	The term ‘cloud computing services’ has no specific definition and can potentially refer to a number of different ‘cloud’ based computing solutions, including:
(a)	the remote provision of hardware including servers, storage space and other network devices (Infrastructure as a Service or IaaS);
(b)	remote infrastructure with an additional layer of functionality, such as an application development environment, database services or other capabilities (Platform as a Service or PaaS); or
(c)	the provision of access to, and use of, software (generally via a subscription model) (Software as a Service or SaaS).
5.2.	The extent of adoption and use of each of the above categories of cloud computing services varies between the two main groups of users, being enterprise users and personal users. It follows that the impact of Australian copyright law on the development and delivery of cloud computing should be considered from the perspective of both enterprise and personal users. 
5.3.	We note that we have limited our responses to questions 5 and 6 to a consideration of the impact of Australian copyright law on the adoption, development and delivery of cloud computing services in Australia.
Enterprise user perspective
Summary: from an enterprise perspective, Australian copyright law has not materially impeded the development or delivery of cloud computing services within Australia.
5.4.	In its recent research paper ‘BSA Global Cloud Computing Scorecard - A Blueprint for Economic Opportunity’, Business Software Alliance (BSA) concluded that of the top 24 countries that account for 80% of the global ICT market, Australia ranked the second most ‘cloud computing ready’ nation. However, despite it being well-equipped to implement and take advantage of the potential benefits such new technology has to offer, Australia has been a hesitant adopter of cloud computing at the enterprise level and substantially trails our economic peers in this space., 
5.5.	Has Australian copyright law caused or materially contributed in any way to the uncertainty of Australian business when considering shifting aspects of their ICT infrastructure or applications to the cloud? The Australian copyright framework certainly has not substantially reduced the number of cloud services, solutions and applications available in the Australian market – conversely, one of the primary advantages of moving to the cloud is that there is no requirement for a vendor to have a physical presence in Australia in order to offer and provide services such as remote hosting or software to Australian clients. As a result, Australian enterprises can engage with all major cloud players such as Amazon, Salesforce, EMC, Google, IBM and HP and gain access to the latest in cloud technology.
5.6.	Most cloud service providers would also acknowledge and accept that Australian enterprises expect to retain full and sole ownership of all intellectual property (including copyright) in any material submitted to, or stored or processed by, a cloud solution, and accordingly vendors will generally not attempt to obtain any interest in, or ownership of, such intellectual property stored in or submitted to the cloud. Again, copyright law, and in particular, issues around ownership of copyright, have not materially affected enterprises’ adoption rates of cloud services.
5.7.	Instead, the lack of uptake by Australian enterprises in respect of cloud computing services has generally been attributed to technical or commercial issues, such as the high existing incidence of in-house virtualisation, data security concerns, privacy and data transfer restrictions and latency, as opposed to perceived restrictions or limitations imposed by the Copyright Act. These are the primary concerns of organisations considering moving elements of their ICT systems or processes to the cloud, which may be indicative of the early stage of the adoption cycle for cloud services in which Australia is currently placed – the key areas of focus in such stages are the immediate operational and risk issues (e.g. how does the solution work, what happens if unauthorised access occurs).
Personal user perspective
Summary: Australian copyright law has not materially impeded the development or delivery of personal “private” cloud computing services within Australia. Copyright and licencing issues have delayed the release of some US based “public” cloud services to Australian users. Copyright law and infringement is a constant concern for providers of “public” cloud services, but is generally addressed in a pragmatic manner by the operator of the relevant service through clear user policies, correct attribution and assisting owners to generate revenue streams from their original works.
5.8.	Cloud services have been available to individual users for a relatively long time. Early online email services (such as Hotmail and Rocket) were effectively SaaS providers – instead of installing email client applications, users instead logged into their webmail account to access and send emails. 
5.9.	Currently there are a large and growing number of personal cloud solutions available to the general public. One of the fastest expanding areas of personal cloud services is remote personal cloud storage (e.g. Dropbox, Amazon Cloud Drive, Microsoft SkyDrive, Google Drive and iCloud). A sub-category of these cloud services includes ‘digital lockers’, like Amazon’s Cloud Player, which enable users to access and stream the digital media libraries from various devices regardless of their physical location.
5.10.	Cloud services such as Dropbox and Cloud Drive can be considered as ‘private’ personal cloud services – access is generally limited to an individual account holder, and their primary purpose is to enable a user to store and retrieve their own data from the cloud. While such services can enable users to share material with other people in breach of copyright, this concern has not affected or slowed the rate of growth or uptake in such services, which continues to be driven by the increased storage needs of individual users (especially in respect of mobile devices). There is also an argument that such private cloud services may reduce online music piracy.
5.11.	There are also a number of ‘public’ personal cloud providers, which enable users to publically upload, access and share content with other people online – Facebook, YouTube and Pinterest are potential services that may enable the unauthorised distribution and reproduction of copyright works.
5.12.	Copyright law (both of Australia and other countries) has had a much more visible impact on the development and delivery of these personal public cloud services. For example, the delay of the Australian launches of popular music streaming services Pandora and Spotify were generally understood as resulting from royalty and licencing issues with the recording labels and artists.,
5.13.	However, Australian copyright law did not ultimately prevent the introduction of those cloud services to the Australian market.
5.14.	Operators of public personal cloud services also generally acknowledge the importance of preserving an author’s intellectual property in their work, including copyright. YouTube and Google were famously sued by Viacom in 2007 for $1 billion (a case which is still ongoing) for breach of copyright in a number of Viacom’s cable television programs. This case did not result in the shutdown of YouTube – instead, the site put in place a robust set of content management and copyright protection policies, and also developed a proprietary application called ContentID, which enables account holders to automatically detect and be notified when another user uploads footage that entirely or partially comprises the account holder's original uploaded content. Once an infringing video has been detected, owners can elect to block the video, monitor its use or even monetise the video via YouTube’s advertising platform.
5.15.	Similarly, Pinterest (a photo sharing site), instead of actively preventing users from ‘pinning’ copyright protected images through its service, has developed systems and processes which enable users to correctly attribute the source of images they share on the site, which directs traffic back to the rightful owners of those works and provides them an opportunity to monetize the traffic generated by the initial user’s ‘pinning’ of the content. 
5.16.	YouTube and Pinterest have adopted a highly commercial and pragmatic approach to the management of copyright issues – instead of pursuing the enforcement of copyright to exclude or prevent the display or use of protected material, these sites have instead attempted to assist and enable the copyright owners to generate a revenue stream from their works. Copyright law (including Australian copyright law) provides the framework under which authors have an exclusive right to monetise their works, and ultimately has, and will continue to, encourage and require continued innovation by such cloud service providers.
6.	
Question 6
Should exceptions in the Copyright Act 1968 (Cth) be amended, or new exceptions created, to account for new cloud computing services, and if so, how?
6.1.	Notwithstanding our comments in the response to Question 5 above, the exceptions to infringement in the Copyright Act are dated, technology specific and largely irrelevant considering the cloud services currently available to both enterprises and individuals in Australia.
Private and domestic use
Summary: the definition of “private or domestic use” should be based on whether any commercialisation of copyright or the work occurs. 
6.2.	The increased presence of social media in our everyday lives has changed our understanding of what constitutes ‘private and domestic use’, including in relation to the use of copyright material. For example, most people would consider posting an image to Facebook is a ‘personal use’ of the image, despite the fact that hundreds (or thousands) of their ‘friends’ would immediately be able to view and access the image once posted. As a result, ‘[p]ersonal worlds that previously could be partitioned—work, family, friendships, matters of sexuality—become harder to keep apart.’
6.3.	Mirroring the approach adopted by YouTube and Pinterest, the Copyright Act should be amended to shift its focus from contemplating whether the use of copyright material was ‘private or domestic’ in nature, to whether the use was ‘commercial’ or ‘non-commercial’. A person should be entitled to communicate, reproduce, publish and otherwise deal with a copyright protected work if they derive no commercial or financial benefit or gain from doing so. However, unless a person is the author or otherwise owns or is licensed to use the copyright in a work, they must not commercialise or monetise the work.
6.4.	Further, a person must be required to attribute the original author of the work in any reproduction, communication or other non-commercial dealing with the work. The attribution should clearly identify the author and, where possible, provide a hyperlink or some other means by which the author may gain traffic or monetisation opportunities in respect of the work.
6.5.	The above approach permits a user to post a picture by their favourite photographer on Facebook, Pinterest or personal blog without risk of potentially infringing the copyright of the original author (subject to proper attribution of the author), while preventing another individual from offering unauthorised prints of the same photograph for sale.
6.6.	Cloud services that derive revenue from advertising or subscription fees, such as YouTube, would clearly not be using copyright material for a “personal or private use” under the proposed new definition. 
Further exceptions
Summary: the Copyright Act needs to include exceptions for reproduction, communication and publication of copyright works as required to store those works in the cloud or access those works using various devices via the cloud. 
6.7.	The Copyright Act should be amended to ensure that a person’s or organisation’s reproduction, communication, publication or other dealing with a work does not constitute an infringement of the copyright in that work if:
(a)	such dealings are performed in connection with a service or device that enables a person to use the work for a non-commercial use; and
(b)	the person is using the work for a non-commercial use.
6.8.	The above exception should include the reproduction, communication and other dealings required to replicate or store such works in countries outside of Australia.
6.9.	In addition, similar exceptions as set out in section 109A of the Copyright Act are required for works other than sound recordings, including cinematograph films, literary works and computer programs. Section 110A should be amended to refer to films embodied in any physical or digital format.
7.	
Question 7
Should the copying of legally acquired copyright material for private and domestic use be more freely permitted?
7.1.	We submit that copying legally acquired copyright material for private and domestic use should be more freely permitted and that it should apply equally to all works and subject matters other than works. 
Amendments should reflect current and potential uses
7.2.	The Copyright Act is out of sync with consumer behaviour and contemporary attitudes to copyright and technology. Technology and the myriad applications available to consumers provide consumers with new, cheap (often free) ways to use and store material, including copyright material, particularly for personal use. 
7.3.	Compliance with the Copyright Act should not be difficult for the public. It is less likely that users will comply with copyright law when they are easily able to access or download for little or no cost: 
(a)	infringing copies of copyright works;
(b)	websites that direct users to infringing copies of copyright works (e.g. The Pirate Bay); and 
(c)	applications and devices which facilitate copyright infringement (e.g. torrenting software). 
7.4.	This is especially the case where users have already bought a legitimate copy of a work (e.g. a VHS tape of a film or a long play vinyl record of a sound recording) and wish to access the work using modern technology. 
7.5.	Personal and domestic uses of copied material should be permitted where the copying does not have a detrimental impact on the copyright owner and does not undermine the economic incentives afforded to copyright holders. 
Copyright owners’ rights are expanded at the expense of users
7.6.	When a person buys a book (a copyright literary work) and lends that book to a friend, that use is not illegal. However, when a person buys an electronic version of a copyright literary work and wants to lend the work to a friend, the user must make a copy and this use is therefore illegal. The person does not profit by either use, but the copyright owner’s rights are effectively expanded at the expense of the private user, who is expected to get a new licence for uses that are analogous to unlimited legitimate uses of works in hard copy, but which are illegal when using current technology. 
7.7.	The personal and domestic use must not prejudice the legitimate interests of the owner of the copyright, but the rights of the copyright owner need to be balanced with the user’s right to use a legitimately acquired work. 
Difficulties defining private and domestic use
7.8.	What is private and domestic use? Currently section 10(1) of the Copyright Act contains a definition of ‘private and domestic use’ means such use ‘on or off domestic premises’. However, it is unclear whether this concept encompasses use of material in a digital or online environment such as an individual’s use on a social media page or a personal blog that is published online.
7.9.	Today, commonly understood private or domestic use includes communicating that work online to a wider audience, and ultimately the public.
7.10.	The failure of the current Copyright Act to clearly define and recognise the normal, non-commercial activities which do not have a financial detriment to the copyright holder undermines the credibility of the Copyright Act. 
There needs to be greater certainty
7.11.	Dealing with material protected by copyright is commonplace and it is therefore important that people understand what they can and cannot do with the material that they have legally acquired.  
7.12.	Section 43C of the Copyright Act is restrictive and not clear. It provides that, if the owner of a book, newspaper or periodical publication makes from it a reproduction (the main copy) of a work contained in the book, newspaper or periodical publication, and the main copy is made for private and domestic use, it does not infringe copyright. Section 43C should recognise that material may be in electronic form. 
7.13.	Section 47J deals with reproducing photographs in different formats for private use. The making of a copy of a photography will not infringe the Copyright Act if the owner of a photograph makes a reproduction of it for his or her private and domestic use and the original photograph is not an infringing copy and at the time the owner makes the main copy, the owner has not made, and is not making, another reproduction of the original photograph that embodies the original photograph in a form substantially identical to the form of the main copy.
7.14.	However, the exception will not apply if the owner has disposed of the original photograph to another person. This carving out is not practical in a digital environment, especially when the majority of photographs are taken digitally and it is difficult to determine which is the original copy. 
8.	
Question 9 
The time shifting exception in section 111 of the Copyright Act 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 the exception be amended, and if so, how?
8.1.	‘Copyright’ is the exclusive right of a copyright owner to authorise, and to prohibit particular acts in respect of matter that is protected. The right allows creators and copyright holders an economic right. In line with Principle 1 that any reform should promote the development of the digital economy by providing incentives for innovation in technologies and access to content, the time shifting exception in section 111 of the Copyright Act needs to be amended.
8.2.	It is important that the exception allow for fair and reasonable use and does not prevent the development of new technologies. 
9.	
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?
9.1.	Yes, the Copyright Act should be amended to make it very clear that making copies of copyright material, legitimately acquired, for the purpose of back-up or data recovery does not infringe copyright. It is important that people be able to protect the material that they have legitimately acquired against loss. Because so much material is created and stored digitally it is important that consumers and businesses are able to prevent the material being lost.
9.2.	This permission does not cause the copyright owner any harm. 
10.	
Question 11 	
How are copyright materials being used for social, private or domestic purposes—for example, in social networking contexts?
10.1.	The following are some examples of uses of copyright material for social, private or domestic purposes involving the uploading and sharing on the Internet of non-commercial ‘user-generated content’:
(a)	posting of copyright content containing a small variation to the original form/content. For example: 
10.1.a.1.	an Internet user uploading a recording of a movie or a television broadcast on YouTube containing the user’s commentary appearing in text at the bottom of the footage; 
10.1.a.2.	an Internet user copying a photograph or drawing with the addition of their own caption;
(b)	splicing together of copyright content to create a new work entirely composed of copyright content. For example, an Internet user creating a sporting highlights compilation from a variety of different television broadcasts;
(c)	creation of a predominantly new work which incorporates copyright material. For example, a film created on YouTube in which an excerpt from a cinematograph film is included as part of the plot of the film; and
(d)	tweets/posts etc of links to the abovementioned material.
11.	
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?
11.1.	Our view is that online uses of copyright materials for social, private or domestic purposes should be more freely permitted. The current law in this respect is unduly restrictive and requires user-generated content to fit within specific exceptions such as review or satirisation of the copyright work. Due to the narrow ambit of these exceptions, many infringements of copyright which do not harm the interests of copyright owners are impermissible, which (if the law were widely known and adhered to) would have the effect of restricting the creation of, and the creativity and self-expression within, user generated content online. However, we agree with Professor Pamela Samuelson’s statement that ‘ordinary people do not think copyright applies to personal uses of copyrighted works and would not find acceptable a copyright law that regulated all uses they might make of copyrighted works’. We would add that as a result of this common perception, a large proportion of creators of user generated content would be unaware that this content is infringing copyright or, even if they were cognisant of the situation, would proceed regardless, on the basis that the law would not be enforced against them personally. 
11.2.	In our view, the Copyright Act should be amended to allow for greater online uses of copyright materials for social, private or domestic purposes. The exception should be framed such that where:
(a)	copyright material is disseminated online;
(b)	whether in its original, unamended form or incorporated in user generated content;
(c)	there is no commercial purpose to either the dissemination of or the ongoing use of the copyright material; 
(d)	the use of the copyright material does not conflict with the owner’s rights to exploit the copyright material; and
(e)	the use of the copyright material does not unjustifiably harm or is not likely to unjustifiably harm the legitimate interests of the copyright owner, whether economic or otherwise,
such dissemination of copyright material is not an infringement of the Copyright Act.
11.3.	Our view is that the exception should not only apply to user generated content incorporating copyright material but should also apply to the dissemination of the copyright material in and of itself. There would appear to be no basis for the creation of an exception which applies to user generated content only.
11.4.	We submit that it is important that the dissemination of the copyright material should not have a commercial purpose. Where a commercial purpose exists, this would appear to be beyond the social/private/domestic purposes which form the underlying rationale for the exception; we also note that where a commercial purpose exists it is appropriate for the would-be copyright infringer to approach the copyright owner and negotiate a licence, assignment etc. We note that in some cases, a commercial purpose may develop after the user generated content was originally disseminated (for example, an Internet user posting a clip on YouTube which becomes so successful that it generates advertising revenue for the Internet user). In these cases, our view is that the exception should not apply to the infringement of the copyright from the time that the commercial purpose develops.
11.5.	We are of the view that the use of the copyright material should not conflict with the owner’s rights to exploit the copyright material. Given the broad terms of the exception, without this form of consideration the value of and purpose behind copyright would be undermined.
11.6.	Finally, we think that the use of the copyright material should not cause unjustifiable harm to the legitimate interests of the copyright owner. As it is arguable that in most instances there will be some degree of harm to the copyright owner from use of its copyright material, the use of the qualifying term ‘unjustifiable’ is critical in striking a balance between the copyright owner’s interests and the public’s interest in generating new content incorporating the copyright material. Further, it is critical that the interests of the copyright owner be ‘legitimate’ in order to promote objectivity in the assessment of whether the exception applies. The copyright owner’s interests should, however, be defined broadly in order to encompass interests such as reputation, the avoidance of consumer misconceptions and so on.
12.	
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?
12.1.	We submit that the exception for online use of copyright materials for social, private or domestic purposes should apply to uses that are non-commercial, do not conflict with the normal exploitation of the copyright material and do not unjustifiably harm the legitimate interests of the copyright owner.
12.2.	Our reasons for this view are contained in our response to question 12. 
13.	
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?
13.1.	Perhaps the most prominent recent example of transformative use is in music, either as an original work, or in user-generated covers, parodies, remixes and other interpretations. At one end of the spectrum, professional musicians frequently make use of samples and one need look no further than Australian artist Gotye and his worldwide hit song Somebody That I Used to Know, to see how works from unexpected backgrounds and historic contexts go on to form a novel part of more contemporary expression and culture.
13.2.	Further from the professional end of the spectrum, Gotye’s work has spawned much user-generated content, capitalising on the song itself, as well as accompanying musical videos. Such a phenomenon is not, however, wholly attributable to the online domain and to services such as YouTube or social media channels that make sharing of such works possible for more people.
13.3.	In an Australian legal context, as in the Kookaburra Case, it is clear that an iconic portion of a work can be substantially transformed and reused within a very different context, but remain a copyright infringement. This is noted in the discussion paper, with particular reference to the comments of Emmett J. This case provides an important historic context that pre-dates sharing of material online and raises important questions which highlight the difficulty we face in adequately demarcating between a sufficiently “transformed” work and one that merely garners for its own author, some improper commercial advantage.
13.4.	Further to this, the collection of parties whose interests may be affected by such an exception extends beyond merely the original rights holder and the progenitor of some subsequent work. Third party content and carriage service providers also stand to make gains (such as by increased revenue from subscribers to their services, or through display of advertising). Australian legislation currently lacks provisions of the same gravity as safe-harbour provisions available to content and carriage service providers under the US DMCA. An exception which adequately addresses these current risks would potentially provide added business certainty.
14.	
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?
14.1.	We are of the opinion that such an exception would potentially reflect common consumer expectations and behaviours. A carefully drafted exception would not be at odds with similar positions being explored internationally.
14.2.	In framing a transformative use exception, the main considerations are:
(a)	what constitutes a transformative work;
(b)	how the activity of the person creating the transformed work interacts with content and carriage service providers who may host or otherwise make the work accessible; and
(c)	whether there are some uses of a work which are acceptable (for example, non-commercial use by the party creating the work) and some which are unacceptable (such as those which may infringe on the moral rights of the original author).
14.3.	The Copyright Act already provides substantial protections for authors’ and copyright holders’ rights to be protected. These protective mechanisms are not only with respect to legal actions available for the breach of copyright itself, but also protect copyright owners from others authorising infringement and restrict access to works. Any exception created should also consider these factors. Too narrow an exception may be of limited utility if the potential commercial gain of a third party (for example; YouTube or Facebook, which may display advertising in connection with a transformed work) or onerous use of technological protection mechanisms renders the creation or display of a transformed work impossible.
14.4.	Recent legislative developments in Canada have framed such an exception as a ‘User Generated Content’ exception. Dr Michael Geist has written extensively on a bill before Canadian Parliament, C-32, which provides for such an exception. In explanatory material, the Canadian Government specifically gave the example of ‘YouTube Remixes’ as a usage scenario that shouldn’t give rise to ordinary actions for copyright infringement. The Canadian Bill couches this firmly in non-commercial terms, but frames the role of intermediaries (such as content or carriage service providers), as being authorised by the party who created the work and would not attract liability. Such a provision was seen in the recent High Court of Australia decision, Roadshow Films Pty Ltd v iiNet Limited whereby the applicants (unsuccessfully) argued that an ISP acts to authorise a party’s infringement of copyright by hosting or otherwise distributing infringing material.
15.	
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?
15.1.	As noted in our response to Question 14, it is difficult to circumscribe an acceptable set of indicative characteristics, or minimum required stylistic or contextual variances that might adequately allow for the definition of a transformative work. What may be more useful is the creation of a list of circumstantial uses of a work that would be presumed to be transformative, in conjunction with a list of characteristics which may help identify transformative works.
15.2.	In terms of modelling the exception to handle publicly available works, it may be useful to look towards software or media licensing schemes such as the GNU Public License (GPL) or Creative Commons License (CC). Both of these have options under which a derivative work (which bears much resemblance to a transformative work) is required to be distributed to others on the condition that they receive reciprocal rights which vary depending on the licence chosen, but may include that attribution is required or that the derivative work be distributed in a fashion that provides subsequent users with substantially identical rights in respect of the derivative work.
16.	
Question 17
Should a transformative use exception apply only to: (a) non-commercial use; or (b) use that does not conflict with a normal exploitation of the copyright material and does not unreasonably prejudice the legitimate interests of the owner of the copyright?
16.1.	As noted in our response to Question 15, defining an exception in too narrow a fashion may have the effect of limiting practical and common existing practices engaged in by users.
16.2.	It is also important to consider that use by third parties ought not to be necessarily thought of as in binary opposition to author’s rights. Such a position is particularly topical in the wake of the recent Internet sensation, Gangnam Style. The South Korean progenitor, Psy, is widely reported to have waived copyright in the work. Following this, the track has garnered widespread international commercial airplay and unusually high volume of sales. While increased protections for copyright may afford some measure of certainty about commercial exploitation of a work by third parties, they necessarily limit certain avenues of display or circulation online that may work to the advantage of the original author.
17.	
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?
17.1.	Authors’ moral rights play an important role in recognising a personal aspect to the nature of creative, scientific and literary endeavours, where some portion of the value derived by the author in a commercial context may indeed accrue from the connection of the work with their person.
17.2.	The current moral rights provisions of the Copyright Act are tempered by whether or not the infringement was ‘reasonable’ and include provisions allowing authors to grant permission for treatment that would otherwise infringe their moral rights. These provisions seem to have been effective in their practical application as is shown by the minimal litigation based on moral rights infringement since their introduction in 2000. 
17.3.	As we have noted in other parts of our submission, we are of the view that there should be a differentiation between commercial and personal uses of works, including moral rights infringements; those who wish to profit from transforming others’ works need to seek a licence to do so. 
17.4.	It is our view that the clear, general and practical provisions existing in the Copyright Act on moral rights can continue to apply as well online without amendment; however, it is important that creators and users are aware of authors’ moral rights and how to avoid infringing them. 
18.	
Question 19 	
What kinds of practices occurring in the digital environment are being impeded by the current libraries and archives exceptions? 
18.1.	A problem for libraries and archives is that they do not automatically acquire copyright in works or other subject matter they collect. 
18.2.	Current Australian copyright laws restrict libraries, educational institutions, archives and institutions assisting those with a disability when it comes to digitisation of collections. 
18.3.	While the rights of copyright owners need to be taken into consideration and upheld, the current laws are not sufficient or clear enough to allow libraries or learning institutions to digitise their analogue collections so that collections are readily available for online access. 
18.4.	In an age where information, including books and articles, is readily available online, these laws obstruct further access to materials that are educational and culturally enriching. Allowing libraries, educational institutions, archives and institutions assisting those with a disability to digitise collections would be a step forward in access and education and would benefit Australia culturally. 
18.5.	Libraries generally have three options when looking at digitising collection items for cataloguing:
(a)	reliance on the statutory exceptions in the Copyright Act; 
(b)	reliance on knowledge that copyright has expired in the collection item; or
(c)	licensing or assignment of rights from the copyright holder.
18.6.	Libraries now need a licence or assignment agreement that encompasses the right to digitise and make copies for the purpose of digitisation. However, copyright is a bundle of rights and obligations. It is not clear to what extent a library or archive can rely on the exceptions to the Copyright Act  and therefore what the terms of such a licence or agreement should cover. 
18.7.	When looking at ways to make it  easier for institutions to digitise catalogues, the exceptions and fair dealing provisions need to be addressed first. The current legalities around exceptions remain unclear to most people without, and even some with, law degrees. In instances where it is unclear whether an exception may apply to a collection work, the institution may often take the cautious approach and not use the work. Library staff at smaller institutions have referred to the difficulties in finding time to understand copyright law, which they have stated as ‘incredibly complicated and continually changing’. Copyright is also described by library employees as ‘an absolute minefield’ and ‘a big headache’, and that understanding the law is ‘like learning another language’. 
18.8.	Where a statutory exception does not apply and copyright exists in the collection item, it is up to the collection holder to locate the copyright owner to determine whether a licence or assignment of right can be granted over the collection item. Often institutions do not have the resources to locate an owner, or the work is orphaned. This bears a high administrative and resource exhaustive cost on the institution. As there are no orphan work exceptions in the Copyright Act, these works may become trapped in an analogue means of access. Current copyright exceptions do little to promote online access.
18.9.	We suggest that the public interest role of an archiving organisation could include adopting copyright in orphaned works, subject to leaving it open for the copyright in the works to be re-assigned if the correct author was found. 
18.10.	We consider there needs to be:
(a)	more clarity in the legal exceptions so that institutions are not afraid of using the legislation and can use it to its full capacity, which might be achieved by capping the liability of these institutions; 
(b)	further exceptions to allow easy digitisation where an owner cannot be traced; and 
(c)	general and clear orphan work exceptions in the Copyright Act. 
18.11.	However, we recognise that all these amendments need to be balanced with the rights of copyright owners.
19.	
Question 20 	
Is s 200AB of the Copyright Act 1968 (Cth) working adequately and appropriately for libraries and archives in Australia? If not, what are the problems with its current operation?
19.1.	Section 200AB of the Copyright Act is still relatively new and its operation is yet to be tested in Court. One reason for this may be that leading institutions are taking a cautious approach when applying this provision. Although this section is flexible in its operation, and can be viewed as one of the most flexible exceptions in the Copyright Act, there is less certainty around its application due to this flexibility.
19.2.	Despite the possible flexibility offered by s 200AB, there is still the practical limitation that encrypted work cannot easily be unlocked without an encryption key. Some archives choosing not to store encrypted work, for instance, the Victorian Electronic Records Strategy, states that the Public Record Office Victoria will not accept any records where the content is encrypted.
19.3.	Whilst s 200AB probably provides for text and data mining to be used to develop a deeper understanding of a collection, some contracts and licences seek to override these exceptions. For example, the Irish Historic Towns Atlas is supplied under licence stating that ‘document changes, commenting, page extraction, content copying and printing are not permitted’, and these types of licence may defeat the purpose of s 200AB if they are allowed to stand. 
19.4.	It seems that this section may need adjusting so that there is more certainty surrounding its application. This would encourage use of this provision by libraries more often and allow more material to be interpreted as falling under a fair dealing or exception provision. 
20.	
Question 21	 
Should the Copyright Act 1968 (Cth) be amended to allow greater digitisation and communication of works by public and cultural institutions? If so, what amendments are needed?
20.1.	We submit that the current legislation needs to be clarified to make it simpler to understand where exceptions are applicable in so that people who do not work in law can understand copyright. In particular, orphan works need to be adequately addressed in the legislation. This would help make it easier for institutions to digitise content, which in turn will allow greater access to archived works which would otherwise be very difficult to reach.
20.2.	However this needs to be drafted in a way which considers such projects like Google Books and does not make it easy for corporations to exploit the system for a profit at the expense of authors and copyright owners. 
21.	
Question 22 	
What copyright issues may arise from the digitisation of Indigenous works by libraries and archives?
21.1.	Copyright is not currently associated with a cultural group or tradition. Some Indigenous works are particularly exposed to infringement in the digital environment due to the current inability to protect them.
21.2.	A Report on Australian Indigenous Cultural and Intellectual Property Rights (the Janke Report) recommended:
(a)	including moral rights for indigenous custodians providing the Indigenous cultural group whose tradition is drawn upon to create a copyright work;
(b)	introducing a new type of work – ‘an Indigenous cultural work’, defined as ‘a work of cultural significance to Aboriginal and Torres Strait Islander people’; and 
(c)	where ownership of an Indigenous cultural work is communal, as opposed to individual, then the Indigenous owners should be given a right of attribution, a right against false attribution and the right of cultural integrity.
21.3.	Cultural norms of Indigenous owners should be recognised and integrated into Australian copyright law generally, which would also apply to digitisasion of Indigenous works. Special permission from Indigenous owners is not currently required under Australian law to communicate Indigenous works. If further exceptions are drafted in the Copyright Act  which allow digitisation of works by libraries and archives, Indigenous works need to be addressed in the exception. 
21.4.	Moral rights can also become an issue in the digitisation of Indigenous works where the correct author or owner may become lost or be recorded incorrectly on the work through the digitisation process.
22.	
Question 23 
How does the legal treatment of orphan works affect the use, access to and dissemination of copyright works in Australia? 
22.1.	Australia is restricting the access and dissemination of works unnecessarily by not adequately addressing the issue of orphan works through legislative reform. 
22.2.	Orphan works are works for which the creator is not known or not locatable.
22.3.	Further to our response to Question 19, many libraries and cultural institutions struggle with copyright issues in relation to orphaned works, as they cannot seek owners’ permission to access or disseminate these works, but do not want to expose themselves to liability for infringement. Orphan works cannot become available in the public domain at the expiration of copyright because the duration of the copyright protection is not known. 
22.4.	The orphaned status of works hinders access and dissemination not only in libraries and cultural institutions, but also for the general public. 
22.5.	The extension of copyright duration in Australia to the author’s life plus 70 years following the Australia-United States Free Trade Agreement has further exacerbated the orphan works problem and Australia’s copyright regime has not adequately addressed this by, for example, providing exceptions for the use of orphan works.
22.6.	The restricted status of orphan works goes against the fundamental idea that copyright protection is afforded by a statutory regime as an economic trade off to provide an incentive to create. Restricting use of orphan works is an unnecessary cultural cost to society, severely hindering access to literature, music and other works, without benefitting any rights owner.
22.7.	At present, orphan works give the greatest hindrance to cultural and learning institutions and libraries. Institutions cannot digitise orphan works meaning that orphan works have the capacity to remain trapped in the old analogue means of access.
22.8.	At present the Copyright Act provides for the following use of works for non-commercial purposes:
(a)	Sections 49 and 50, which allows digitisation of library collection items in response to a user request or other library for copies of published works for the purposes of research or study.
(b)	Sections 51 and 110, which allow for preservation work to be carried out on orphan works or where works are old, unpublished and held in publically accessible collections and can only be communicated or reproduced for the purpose of research or study. These exceptions are very narrowly constructed and very limited in the way that they can be used. 
(c)	Section 51A (2) for administrative purposes.
(d)	Section 200AB, which is an open-ended and flexible provision for libraries, educational institutions, archives and institutions assisting those with a disability to allow use of copyright material for certain socially useful purposes provided that a three-step test that is to be met to allow use. Where a work is used under this provision there is no legislative limitation to liability for using orphan works on the basis of reasonable enquiries. Adoption of this provision has been slow as the provision has failed to provide certainty for copying of works by cultural institutions and is too limited.
(e)	Fair dealing provisions (sections 40-43 and 103A-103C) provide defences for interpreted use of collection items provided that it is used within the means outlined and the use falls within the tests outlined. 
22.9.	As most institutions are advised to take a risk management approach it is more likely that they will not use a work that is considered orphaned. Further there are no general provisions in the Copyright Act that allow for orphan works to be used. The current treatment of orphan works prevents access and dissemination of works at a cost to society. The law has not adequately addressed orphan works in Australia and requires amendment to specifically allow general exceptions for use of orphan works so that the law no longer hinders access and dissemination of such works in Australia.
23.	
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?
23.1.	We submit that the Copyright Act should be amended to create general statutory exceptions for the use of orphan works. We note and agree with the provisions set out as per Brennan and Fraser in paragraphs 164-166 of the Issues Paper. We submit that this would be a cost efficient and simple option against the licensing model, as long as the legislation is drafted in a way that is clear and concise and which encourages people to use orphan works within the legislative framework. 
23.2.	We submit that the following aspects be incorporated into the drafting of general exceptions:
(a)	Orphan works should be clearly defined in the Copyright Act as works with no locatable copyright owner. 
(b)	There should be general exceptions for libraries, educational institutions, archives and institutions assisting those with a disability to use orphan works for non-commercial purposes (similar to section 200AB, however framed for the purpose of addressing the problem of orphan works).
(c)	There should be an onus on the party wishing to use the orphan work to perform a diligent search and to maintain evidence of this search to ensure that the party has attempted, and cannot locate the copyright owner. 
(d)	A distinction should be made between published and unpublished orphan works. An exception should be made for the use of unpublished orphan works without the copyright owners’ permission by natural persons for non-commercial use, as long as a diligent search has been performed.
(e)	Liability of an unauthorised user should limited in situations where an owner of copyright comes forward after the work has been used without permission. Where the unauthorised user can show evidence that there were searches undertaken to determine the copyright owner a nominal or reasonable licence fee should be payable to the copyright owner rather than court proceedings. This amount could be determined by a board established to deal with this issue. 
24.	
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 
24.1.	No specific exception presently exists in the Copyright Act in relation to data mining. Data mining raises issues as to whether a substantial part of a work is being reproduced in the process of being ‘mined’, whether the resultant reproduction of a portion of the underlying work is in fact of an expression within that work, and rightly protected by the Copyright Act, or an extraction only of the underlying facts or ideas contained within the work, and therefore not protected, as well as whether any such reproduction is part of a technical process of use.
24.2.	For example, the indexing of a site may capture the frequency of the use of a certain word, phrase, or image within that site, or the links from that site to another site. By performing an analysis on this information, a search engine is then able to rank websites according to its algorithm and present results for a user to access. The analysis of the frequency of use of a specific word is unlikely to be seen as a reproduction of an expression or substantial part of that work, while reproduction of the word or phrase within an index may be a reproduction of an expression but is unlikely to be seen as a ‘substantial part’ of the work. 
24.3.	On the other hand, where the data mining involves the creation of a data-warehouse containing the entirety of a work in a material form (as distinct from, for example, a statistical analysis of the frequency of usage of each term within that work), it would be quite likely that such a process would involve the reproduction of a substantial part of a work.
24.4.	Much of the potential damage that might be done to content owners as a result of data-mining results from the extraction of data from few, or single sources, on account of the fact that compilations mining few or single sources are far more likely to result in reproducing the initial source, or information which appropriates the value of that source, rather than in generating new data arising from an analysis of the underlying information.
25.	
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?
25.1.	Consideration should be given to achieving these goals through the employment of a flexible and purposive ‘fair use’ exception. 
25.2.	Due to the breadth of content potentially available for data mining across numerous industries and in numerous forms, it would be difficult to develop a licensing model which would adequately cover all forms of uses for all types of content in an equitable manner. However, in specialised fields involving access to specific forms of data, and where the degree of reproduction of an underlying use would fall outside a more general exception taking into account the factors above, there would be both commercial and practical utility in developing licensing schemes to allow for the access to and mining of such information.
26.	
Question 35 	
Should the retransmission of free-to-air broadcasts continue to be allowed without the permission or remuneration of the broadcaster, and if so, in what circumstances?
26.1.	Yes, we are of the view that retransmissions should continue to be allowed without permission or remuneration of the broadcaster. 
26.2.	Further, the retransmission scheme should be expanded to maintain technology neutrality, consequently allowing for retransmission over the Internet and via Internet protocol television.
26.3.	In its current form, the retransmission regime promotes uncertainty, offers considerable complexity and is obsolete. The existing ban on retransmission over the Internet is, at best, a technical limitation. At worst, it damages innovation, grants unfair advantage to established technologies and limits access and dissemination of Australian content.
26.4.	We submit that rebroadcasting exceptions should be rolled into a broad, principles based, technology neutral fair dealing exception. This exception should focus upon the facilitation of communications regardless of origin to an intended recipient or licensee, in circumstances where the intended communication is not reasonably available.
26.5.	We consider that such an exception would not erode or diminish an incentive to create for artists. Instead it encourages the dissemination of original copyright materials and enables Australian to access, use and interact with content.

27.	Question 36 	
Should the statutory licensing scheme for the retransmission of free-to-air broadcasts apply in relation to retransmission over the Internet, and if so, subject to what conditions—for example, in relation to geoblocking? 
27.1.	No. 
27.2.	The media context in which the copyright exceptions for the retransmission of free-to-air broadcasts exists has changed significantly since those exceptions were originally introduced to improve distribution and access to free-to-air services around Australia.
27.3.	We are of the view that the obligatory statutory licencing regime for the retransmission of free-to-air broadcasts is uncertain and obsolete. By virtue of its technology specificity, it is also damaging to innovation, and creates a market imbalance in favour of established communication technologies.
28.	
Question 37 	
Does the application of the statutory licensing scheme for the retransmission of free-to-air broadcasts to Internet protocol television (IPTV) need to be clarified, and if so, how?
28.1.	Yes. 
28.2.	As it currently stands, after much legislative back and forth, the end result has been a small improvement to the rights of free to air broadcasters, a complex web of exemptions for re-broadcasters, and a scheme that offers some remuneration for underlying rights holders against re-broadcasters.
28.3.	The trade off is a legislative framework for free-to-air retransmission that creates substantial difficulties for statutory interpretation by virtue of the confusing interplay between the Copyright Act and the Broadcasting Services Act 1992 (Cth). It contributes to the complexity of copyright law, and likely leads to uncertainty amongst creators and users.
28.4.	The establishment of exemptions for Internet and satellite retransmission is also directly contradictory to the stated principles of reform concerning a response to technological change. Indeed, the very existence of the scheme pre-supposes a technology specific public interest in the distribution of free-to-air services, and only free-to-air services.
28.5.	We are of the view that, when considering contextual changes to the media and technology that have taken place, Internet and satellite retransmission prohibitions have entrenched the status quo of traditional wireless and cable technologies rebroadcast rights against competition from new and future technologies.
28.6.	For example, in its current form, the copyright free-to-air rebroadcasting scheme contributes to a general prohibition in Australia against the existence of Internet-based personal place shifting technologies which have seen some success internationally.
28.7.	We are also of the view that the need to improve distribution and access to copyright works and subject matter other than works may not be limited to free-to-air broadcast services, and rebroadcasting exemptions under the Copyright Act should consider this reality.

29.	Question 38 	
Is this Inquiry the appropriate forum for considering these questions, which raise significant communications and competition policy issues?
29.1.	Yes. 
29.2.	The Committee considers that the relationship between copyright, communications and competitions issues is inextricable. The copyright reform inquiry offers a unique opportunity to manage and consider the public interest in media rights. As such, the copyright reform inquiry is an appropriate forum for considering the retransmission of free-to-air broadcasts.
30.	
Question 45
The Copyright Act 1968 (Cth) provides fair dealing exceptions for the purposes of:
(a) 	research or study;
(b) 	criticism or review;
(c) 	parody or satire; 
(d) 	reporting news; and
(e) 	a legal practitioner, registered patent attorney or registered trade marks attorney giving professional advice.
What problems, if any, are there with any of these fair dealing exceptions in the digital environment? 
30.1.	The current exceptions in Division 3 of Part III and Division 6 of Part IV of the Copyright Act present some key problems in the digital environment, for example:
(a)	the requirement of “sufficient acknowledgement” in the current fair use exceptions presents problems in the context of sharing or posting a URL online or in character-limited communication such as a tweet. 
(b)	also, in many cases the identity of the original author of the work being linked is not clear (or unknown);
(c)	the Internet provides many channels and opportunities through which a person may provide criticism or review about a vast number of topics that includes or refers to copyright-protected material – e.g. linking to material when commenting on a Facebook page or status, or linking to content in a tweet. 
(d)	the appearance of “criticism and review” has evolved online, and now includes material that can vary from structured feedback given on websites such as TripAdvisor to a one sentence tweet about a product or service on Twitter, which (especially in the case of celebrities) has the potential to influence millions of people around the world. The Copyright Act is ill-equipped to deal with these new forms of communication; and
(e)	the applications of ‘parody’ and ‘satire’ have broadened considerably since the fair dealing exceptions were drafted, due primarily to the enablement of individuals to quickly generate their own content and distribute it to a global audience. While the quantity of such content online has grown exponentially over the past 5 years (with the emergence of social networks and services such as YouTube entering into the mainstream), the quality of that content varies greatly. As a result, distinguishing between legitimate “parody and satire” and other material that is claimed to be satirical or a parody (but which in many cases can be highly offensive, racist or sexist) has become much more difficult, and it is uncertain whether the ‘fair dealing’ provisions of the Copyright Act are robust enough to effectively deal with, and provide consistent answers to, these emerging issues.
31.	
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? 
31.1.	No.   The more prescriptive the Copyright Act is regarding fair use exceptions, the more limited the individual is to use copyright material for legitimate and “fair” purposes. 
Certainty
31.2.	While a general fair use exception is attractive as it would achieve a flexible approach and may be suited to the digital environment with the constant development of technology, it may be difficult to comply with. There would be uncertainty for copyright owners and for consumers until case law was developed and it is unlikely that there would be much case law as there is little incentive, from a copyright owner’s perspective, to pursue an individual for a infringement for personal use which is unlikely to cause the copyright owner financial detriment. 
32.	
Question 52 
Should the Copyright Act 1968 (Cth) be amended to include a broad, flexible exception? If so, how should this exception be framed? For example, should such an exception be based on ‘fairness’, ‘reasonableness’ or something else?
32.1.	Our view is that the Copyright Act should not be amended to include a broad, flexible exception similar to that which operates in the United States. We accept that there are arguments in favour of an open-ended model, but ultimately we adopt the view that the disadvantages of an open-ended model far outweigh its advantages. Having such a broad exception would make the operation of copyright law far more uncertain and, as the broad exception could potentially be argued in all cases of copyright infringement, the positioning of copyright law within rightsholders/public access intellectual property spectrum would be placed too much in the hands of the judiciary and judges would have an undesirable level of discretion in individual cases, at least in the early years before a body of jurisprudence was developed.
32.2.	However, as we explained in our response to question 12, we consider that the Copyright Act should be amended to allow for greater use of copyright material for social, private or domestic purposes. Our suggested formulation in that response was limited to the dissemination of copyright material online. There is, however, no reason why this test could not also be extended to all uses of copyright material. Our suggested framework is relatively broad in its operation but importantly makes it clear that uses of the copyright work for commercial purposes or in circumstances which unjustifiably harm the legitimate interests of the copyright owner are impermissible. Under s 107 of the US Copyright Act, such factual findings would be thrown into the mix by the judge as a factor for consideration, but would not be determinative. We consider that a broad fair use exception may lead to undesirable outcomes which conflict with the fundamental aims of copyright, while a narrower but still general exception with several hurdles to overcome (such as that we proposed in question 12) would bring with it many of the advantages of an open-ended fair use model without necessarily also introducing the same disadvantages.  

33.	
Question 53 
Should such a new exception replace all or some existing exceptions or should it be in addition to existing exceptions?
33.1.	The exception we proposed in our response to question 12, as explained further in our response to question 52, should be in addition to existing exceptions. This is because most of the existing exceptions, such as review or satire, are premised on the basis that they may be for commercial purposes and may conflict with the legitimate interests of the copyright owner. In other words, using only our proposed exception and abolishing the existing exceptions would actually reduce the extent of copyright exceptions.
33.2.	Similarly, if a broad fair use exception was implemented, we are of the view that it should not replace the existing exceptions. We think that the existing broad use exception would not necessarily encompass all of the scenarios in which the more specific exceptions apply and, accordingly, there is no basis for repealing the specific exceptions.