Copyright and the Digital Economy

Tasmanian Government Submission to the Australian Law Reform Commission Issues Paper No 42

Focus

This submission addresses the questions relating to Crown Use of Copyright Material with some additional comments on need to clarify the status of material freely available on the internet.

Background

Under section 183 of the Copyright Act 1968 the Crown is entitled, unlike other copyright users, to copy any copyright works without the prior permission of the copyright owner, if done for the services of the Crown. However the Crown is required to inform the copyright owner of the copying and, if required, comply with agreed terms for the use.

In 1998, section 183A was inserted into the Act with a view to providing an administratively simple way for the Crown to discharge its copyright obligations. Section 183A provides that the Crown may enter into an agreement with a copyright collecting society and pay the relevant society “equitable remuneration” in lieu of dealing directly with each individual copyright owner.  The copyright collecting society then distributes payment to copyright owners.

Since 1998, as required by the section, Tasmania has entered into a series of statutory licence agreements with the Copyright Agency Limited (CAL) in respect to print works. Tasmania has also entered into a voluntary agreement with Australasian Performing Rights Association (APRA) for music performance. An agreement with Screenrights in respect to copying of radio and television broadcasts is in the process of being negotiated. The terms of these agreements have been negotiated in partnership with the other States and Territories.

Question 32 

Is the statutory licensing scheme concerning the use of copyright material for the Crown in division 2 of part VII of the Copyright Act 1968 (Cth) adequate and appropriate in the digital environment? If not, how should it be changed?

A statutory licensing scheme is appropriate for government as government makes extensive use of copyrighted work. It would be inefficient for government to contact each and every copyright holder whose work is used to seek permission to use a copyrighted work. 

The fact that government makes use of copyrighted works for the purpose of providing a wide variety of services to the public justifies government being subject to a specific copyright provision intended to make compliance simpler and more efficient.

Since 1998 the States and Territories have collaborated to negotiate the terms of agreements with collecting societies. The agreements have been to pay the declared collecting society an annual fee (set based on data collected in a survey) per full time equivalent (FTE) for government use of copyright material.

However, while a statutory licensing scheme is appropriate for government, experience of the scheme over almost 15 years has revealed a number of shortcomings which have been exacerbated by the growth of the digital economy and the inability to devise a survey to accurately capture digital use. 

The statutory licensing scheme should be amended to address the following issues if it is to provide a simple and efficient way for government to meet its copyright obligations.

1.	The requirement to conduct a survey

The requirement to develop, negotiate and administer a survey has imposed a substantial burden, created an on-going source of tension in dealings between governments and declared collecting societies, and increased the cost and resources required by governments to discharge their copyright liabilities.

A survey needs to estimate the number of remunerable copies made across the whole of government. This is done by sampling a range of agencies or business units across a set period of time. 

Devising a survey requires specialist knowledge of legislative provisions, government procedures, collecting society requirements, statistics and the capabilities of copying equipment and software. There are few businesses with the requisite knowledge and interest in developing and carrying out such a survey, resulting in extremely limited options of potential survey design and/or contractors to conduct the survey.

Previous surveys basically involved manual record-keeping of hard copies made at selected photocopiers and were resource intensive for government. Such surveys required substantial resources of the targeted agencies, notably in relation to staff training, survey co-ordination and completion of survey forms. Agencies saw no benefit in being selected for the sampling surveys but were obliged to devote substantial resources to them. Not surprisingly, there were problems with compliance in some agencies.

Previous surveys, while resource intensive, could be done. However, in government as elsewhere, hard copying is rapidly being replaced by communication and/or digital copying with a resultant lessening of the use of central copying facilities and an increasing difficulty in measuring remunerable copying. 

The issue of how to successfully survey digital use of copyright material has not been answered. Preliminary investigations were undertaken by one State into the possibility of using the technological capabilities of Multi-Function Devices (MFDs) to automatically record copying, but serious questions in relation to breaches of laws on privacy, confidentiality, workplace surveillance and security, as well as conflict with government procurement policies and overall costs make such a survey method unlikely.

The difficulty of devising an acceptable survey in the digital age is evidenced by the fact that there has been no survey of print copying conducted since 2002-3, despite years of negotiation and the requirement for a survey to be carried out before a new agreement can be entered. As a result recent “retrospective” agreements, entered in to so government can discharge existing copyright liabilities, are based on data which is out dated and probably no longer reflects actual use. It is understood that survey data is also used by CAL for distribution purposes so this is likely to also be out dated.

Given the difficulty of designing and agreeing on a survey, particularly in relation to digital use, it would be helpful if consideration could be given to some further statutory guidance on the scope and design of a survey. Clarification of matters such as what is a remunerable copy may assist in this regard. 

If there is any other possible basis for establishing government use other than conducting a survey, then this should be considered for inclusion in the legislation as an alternative.

2.	Equitable Remuneration

Section 183A requires a government to pay “equitable remuneration” to a collecting society in respect of government copies made over a particular period. The Act gives no guidance on how to assess what amounts to equitable remuneration, either for the parties seeking to reach agreement or for the Tribunal if agreement cannot be reached. 

One obvious question is whether government should pay “commercial” rates for use of copyright or whether, since government use is generally for the public benefit, the amount should be assessed on a different basis.

At various times there has been robust debate between government and the collecting societies on matters such as whether the remuneration rate should vary depending on how or what is copied. An example of such a matter is whether digital copying should be accorded the same rate as hard copying or whether it is an inherently more valuable form of copying, and if so why and to what extent? 

Recently, technological advances have resulted in government more often obtaining a direct licence from a copyright owner (e.g. by means of an online subscription) in relation to frequently used resources. These direct licences, obtained in the open market, may be less expensive than paying a collecting society for copying through a statutory licence, which may indicate that the “equitable remuneration” agreed in the past is not reflective of the true market value of a copy.

Because there is only a single collecting society appointed for the various forms of copying, and government must enter into an agreement with that society, government negotiations on agreement terms are constrained as the only alternative is to expend public resources before the Copyright Tribunal.

Legislative guidance on how “equitable remuneration” should be calculated, for example whether some forms of copying are more valuable than others or whether the rates should be “commercial” would greatly assist in the practical application of the section. It would be preferable if Government were not required to pay commercial rates given that the material is copied to provide services generally to the public. 

3.	What is a remunerable copy?

Much of what is copied by government is not remunerable. A large percentage of what is copied is self-generated material and therefore not subject to third party copyright. There are also other categories of material copied that should not be treated as a remunerable copy – these categories are set out below.

a)	Fair dealing and other exemptions under Part 3 Division 2

Part 3, Division 2 of the Act provides for use that does not infringe copyright. Clearly, reproduction by government for purpose of judicial proceedings or professional advice is exempt. However, CAL has frequently maintained that other exemptions, such as fair dealing for the purpose of research or study, cannot be claimed by government in respect to its statutory licence. This issue has never been resolved, partly due to the reluctance of government to expend public money on a lengthy Tribunal hearing which is likely to be subject to appeal no matter what the outcome. 

It seems nonsensical that government should not be able to avail itself of an exemption available to other persons. For example, a large part of government copying of third party works is undoubtedly for the purpose of research for policy development and good governance. The exemptions in Part 3 Division 2 should apply in the case of a statutory licence and this should be clarified in the Act.

It would also be desirable to include some further exemptions in the Act for government use of copyright material in the digital age to make allowance for the transfer of a hard copy into electronic form. For example correspondence to Government is generally scanned into an electronic file for ease of access, consultation with relevant employees and secure storage. As it currently stands this act is the making of the remunerable copy, even though the author (copyright holder) of the letter would most likely expect that the letter be dealt with in the way most conducive to the provision of a timely and comprehensive reply and therefore give implied consent to it being dealt with in this way. Such copying for the purpose of record keeping and response should be specifically exempted from the Act.

b)	Collection of fees from government for use of government material

One Agency of government may copy material produced by another Agency. From a Tasmanian perspective, the general copyright notice for government is to permit copying of government material for non-commercial purposes. Notwithstanding this, there is evidence that CAL collects copyright fees from Education bodies (which are subject to a different statutory licence) for copying government material within the same jurisdiction. For example, in the past fees have been collected from the Tasmanian Department of Education for copying brochures from the Tasmanian Department of Health in relation to control of head lice. This fee should not have been collected for two reasons – firstly the relevant copyright notice would have stated that the material could be used for non-commercial purposes and secondly both Departments are part of the Tasmanian Government.  Resources have not been available to follow through on the occasions when this has happened, but anecdotally this is not an isolated incident. It is not clear where the fault arises for the fee being levied, but clearly there is a need to ensure that this does not occur, if necessary by making a legislative change.

c)	Increasing use of direct licence agreements

Government is increasingly entering into direct licence agreements with copyright owners, for example by subscribing to on-line journals. Copies made under the terms of these agreements should be excluded from any survey of government use for the purpose of establishing the amount payable under a statutory licence and the Act should be amended to reflect this fact.

With the increase in direct licensing arrangements with copyright owners, governments may in fact be paying twice for the same material as it was most likely included in surveys conducted several years ago prior to the direct licensing arrangements.

d)	Non-inclusion of communication in section 183A

Communication includes such actions as uploading material onto a website or emailing material, both of which are increasingly common ways of dealing with copyright material in the digital age. Section 183A does not cover “communication to the public” which means that an increasing percentage of government activity is not within a statutory licence and requires the more onerous application of section 183. The failure to include communication in the statutory licence provisions is simply confusing and anomalous. 

 Section 183A should cover “communication” as well as copying. 

Question 33. 
How does the Copyright Act 1968 (Cth) affect government obligations to comply with other regulatory requirements (such as disclosure laws)?

Under the Right to Information Act 2009, government may be obliged to provide copies of third party material to an applicant. Provision of this material should be exempt from the application of the Act.

Question 34. 

Should there be an exception in the Copyright Act 1968 (Cth) to allow certain public uses of copyright material deposited or registered in accordance with statutory obligations under Commonwealth or state law, outside the operation of the statutory licence in s 183?

Yes

As the outcome in the High Court’s decision in Copyright Agency Limited (CAL) v State of NSW highlights, copying undertaken as part of a statutory obligation will not be immune from payment of equitable remuneration to copyright owners. 

Legislative change should be considered to emulate the Public Administration provisions of the United Kingdom copyright legislation.

Recognition of Implied Licence

In addition to the matters above, consideration should be given to whether free access to online material, particularly where downloading or printing is encouraged, creates an implied licence to use that material free of copyright obligations. 

This is clearly not just an issue for Government as the web has fundamentally changed how information is disseminated. On any topic of interest, an internet search will reveal a vast number of sites where information appears to be freely available. The majority of these sites allow the material to be downloaded or printed free of any charge. It is arguable that in providing the material in this manner the copyright holder is giving implicit permission for the material to be copied freely.

The vast majority of web users are unlikely to investigate whether information apparently freely available has a copyright notice attached (if there is it often very discreet) which allows copying only under certain conditions. As a result the web means that copyright law is likely more honoured in the breach than the observance. 

It is important that the Act clarify the status of material that is freely downloadable from the web. Ideally the Act would state that there is an implied licence for such material to be used for personal, non-commercial purposes, or for use by government for the public benefit.