238._org_The Combined Newspapers and Magazines Copyright Committee
Full name: Gail Hambly
If you are making this submission on behalf of an organisation, please provide the name: 
The Combined Newspapers and Magazines Copyright Committee (details of the Committee are attached as File 1)
Address: c/o Fairfax Media Limited GPO 506 SYDNEY NSW 2001
Question 1: 
The publishers represented by the Combined Newspapers and Magazines Copyright Committee (Publishers) are concerned that digital technology, while providing enormous benefits in allowing the Publishers to provide timely and flexible news and other information services, has also created an environment in which it is easy for others to 'free ride' on the investment of the Publishers and, indeed, compete with them through those 'free riding' activities.
The Publishers specifically reject any suggestion that because 'free riding' has now become easy that it should be legitimised by legislation.  This approach undermines the opportunities provided by digital technologies rather than allowing such technologies to support and grow the creative sector.
Background – The Technological Revolution in the Industry
The changes to the technology employed in the production of newspapers and magazines over the last 30 years have been extraordinary.
The first substantial change to newspaper and magazine production since the late 1800s, when the rotary press and linotype were introduced, involved the move from 'hot metal' production to 'cold type'.  In the 'hot metal' regime, an article was typed by the journalist, marked with type instructions and sent to the composing room where it was converted into metal type via lead typecast machines. Similarly, images were produced by photographing photographic prints using a graphic camera and these prints were then colour separated or photographed in single colour and made into stereo blocks. The printing process was completed by “making-up” the metal type articles and the image blocks into metal page formes, making die-casts and then making metal cylinders for printing on a rotary press.  The newspaper or magazine thus printed was then distributed in the form it was printed.  It was a labour-intensive and comparatively slow process.
Until the late 1970s the majority of printing was carried out via Rotary Letterpress or Rotary Gravure printers. Some smaller newspapers and periodicals were produced by a method called Offset (Lithography) printing. With advances in photo reproduction (allowing cheaper, quicker platemaking) and in paper making technology (allowing more grades to be run via the Offset printing process) there was a greater uptake in Australia of both Web Offset Printing (Coldset) and Heat Set Web Offset Printing (HSWO). By the mid-1980s a majority of magazines printed in Australia were printed using HSWO and newspapers printed in Australia were printed using Coldset.
With the advances in Offset technology and to supplement the improvements in platemaking technology, in the late 1970s and early 1980s 'cold type' was introduced by Australian newspaper and magazine publishers.  Under this process, articles were written by journalists on computer terminals and then sent to Compositors who produced bromides for pasting down on designated pages.  Images were now also easier to produce as they were scanned from transparencies on drum scanners, these images were then combined with the pasted-up page layouts as film and were ready for platemaking.
In the early 1990s a second wave of technological change occurred with the advent of desktop publishing, which saw the introduction of electronic layout design and typography and advanced text and image storage and manipulation.  It was now possible to create and store an electronic newspaper or magazine in digital form and communicate it in that form. This also eventually affected printing technology as images were able to be scanned and colour separations were able to be combined and produced digitally rather than by manual combination.
While this was occurring various organisations in the United States, such as Knight-Ridder & Tribune Co, Data Times and Dow Jones, started producing 'online news and information services' which they sourced from contributing publications with which they had arrangements.  Publishers both in Australia and overseas also started delivering their publications in the form of CD‑ROM in the early 1990s.
Australian publishers also began giving feeds, either electronically or on magnetic tape, to selected outlets such as libraries, research organisations and news services such as Reuters and AAP.
The late 1990s saw the uptake of Computer to Plate Technology, which allowed images to be rendered directly to the plate without photographically separated film. This was then linked with the technology known as Portable Digital Format (PDF) file (which was developed initially in the early 1990s as a digital file sharing format and subsequently adopted by the print industry as the standard for submission of files to printers), allowing publishers to layout and create pages in a digital format ready for print and, ultimately, for use in other forms of delivery, such as on a computer, iPhone or tablet.
It was not until the 2000s however that electronic delivery of published news and other information content became commonplace and 'electronic publications' became the reality they are today.
Newspapers and magazines continue to be provided in the traditional hard copy form which can be delivered to the doorstep or mailbox or purchased from a newsagent or other retail outlet.  However many of these publications can now be accessed in the same or similar format on a computer, iPhone or tablet.  Some publishers also provide associated electronic publications which are continually updated so that the news can reach the public almost as it happens.
Threats to the Viability of the Industry
It is only comparatively recently that digital technology has been developed which allowed news and other information publications to be created and distributed far more quickly than was the case even 10 years ago.  While this development has been of considerable benefit to the Publishers it has also created an environment which contained a considerable threat to their continued viability.
Newspaper and magazine publishers, and other entities in the information media and telecommunications industry, in 2011 employed approximately 11,550 journalists and other writers. [1]
By way of example, below is a table setting out the number of journalists employed on some of the larger newspapers:
The Adelaide Advertiser	253	
The Age	207*	
The Australian	294	
The Daily Telegraph	346	
The Herald and Weekly Times	373	
The Sydney Morning Herald	216*	
The Financial Review Group (which includes BRW)	210*	
The Courier Mail	324	
APN titles	400	
The West Australian	200	
* Full time equivalents
Recently and unfortunately a significant number of journalists were made redundant in each of those organisations in an effort to reduce costs in a digital environment where many other forms of 'media' are available and compete for the advertising dollar.
Journalists are critical to the collection and analysis of information concerning contemporary events and culture, and without them there can be no high quality news services. Journalists and the publishers who employ them play a vital role in keeping the Australian public informed.  A very substantial part of the overhead of the Publishers is journalists' salaries.
Many publications that are focussed on news and current affairs also rely on so called 'wire services' or news agencies and on publishers in other countries with whom they have a commercial relationship which allows them to reprint material, incorporate it as their own articles or rewrite it.  This allows them to expand their coverage greatly, but it comes at a price.
Over the last 4 or 5 years a number of non media organisations have commenced what are termed 'abstracting services'.  Those services obtain the publications of the Publishers and abstract various articles contained in those publications.  With some publications, such as the AFR, they may even abstract up to 50% of the articles.  They then sell those summaries or abstracts as a separate service which, in effect, competes with the services from which they obtained the articles. To date, the current copyright law has been ineffective in protecting the Publishers from these activities which take place in the digital economy.
The Publishers submit that there is an important public interest to be served in protecting organisations that employ journalists to collect and analyse information concerning contemporary events and culture and to provide commentary on public affairs.

[1] Australian Government, Journalists and Other Writers, Job Outlook http://joboutlook.gov.au/pages/occupation.aspx?search=&tab=overview&cluster=&code=2124.
Question 2: 
Question 3: 
Question 4: 
Question 5: 
Question 6: 
Question 7: 
Question 8: 
Question 9: 
Question 10: 
Question 11: 
Question 12: 
Question 13: 
Question 14: 
Question 15: 
The Publishers submit that the Copyright Act should not be amended to introduce an exception for transformative use.
Transformative uses can potentially cover most of the exclusive rights of a copyright owner. As such, an exception for such uses would unduly limit the ability of a copyright owner to exploit their material, particular as the material produced from a transformative use often competes with a copyright owner's material. For example, newspaper and magazines have substantial collections of photographs which are of considerable value.  The introduction of a transformative use provision may lead to these photographs being 'transformed' to a different purpose without payment to or recognition of the copyright owner.
Simply because technology is enabling new transformative uses not before contemplated does not mean that a copyright owner should not have the right to control these uses in return for their creation of the original material. In fact, the digital age itself has made it ever more important to protect the copyright owner's right to transform their works as material becomes quickly outdated.
It is also likely that a broad transformative use exception would breach Australia's obligations under the Berne Convention which provides that '[a]uthors of literary or artistic works shall enjoy the exclusive right of authorizing adaptations, arrangements and other alterations of their works.'[1] It is unlikely that this breach would be cured by compliance with the three-step test for exceptions under the Berne Convention as a broad transformative use exception, which nullifies the adaptation right (and limits other rights), is not confined to certain special cases, conflicts with the normal exploitation of the work and unreasonably prejudices the legitimate interests of the copyright owner.[2] This conclusion is also supported by the fact that a 'transformative use' is not confined to uses that are socially beneficial or that have minimal impact on the copyright owner's ability to exploit their material (which is the case for the purposes comprising the fair dealing exceptions).

[1] Berne Convention for the Protection of Literary and Artistic Works, 24 July 1971, [1978] ATS 5, Article 12  (entered into force on 10 October 1974, entered into force for Australia on 1 March 1978). See also Article 14.
[2] Berne Convention for the Protection of Literary and Artistic Works, 24 July 1971, [1978] ATS 5, Article 9(2) (entered into force on 10 October 1974, entered into force for Australia on 1 March 1978).
Question 16: 
The Publishers do not support the introduction of an exception for transformative use. The Publishers would be particularly concerned if such an exception was introduced and framed in a way so that any use of a publicly available work in the creation of a new work would be considered transformative. As stated in question 15, such a wide definition would completely nullify the adaptation right.
There does not appear to be any reason why all uses of a publicly available work in the creation of new work should not require permission from and remuneration to the copyright owner (aside for uses contained in the current fair dealing exceptions which are justifiable on public policy grounds).
Question 17: 
The Publishers do not support the introduction of an exception for transformative use. However, if such an exception is introduced, it must be carefully limited to protect copyright owner's interests.
The Publishers are of the view that 'non-commercial use' is a problematic term. The distinction between what is and is not commercial is not always clear and something that was transformed for non-commercial purposes may be used for commercial purposes at a later stage.
A limitation based on a transformative use that does not unreasonably prejudice the legitimate interests of the owner of the copyright is also likely to be problematic given the uncertainty surrounding which transformative uses would have such an effect.
The two suggested limitations also ignore the fact that the digital age has made it easier for users to identify copyright owners, and the collecting societies they are members of, reducing the transaction costs for users in obtaining necessary consents. Given that transaction costs are now likely to be relatively low, there should be no reason why users should not attempt to negotiate consents with copyright owners to ensure they are fairly remunerated for their work.
Question 18: 
Question 19: 
Question 20: 
Question 21: 
Question 22: 
Question 23: 
Question 24: 
Question 25: 
Question 26: 
Question 27: 
Question 28: 
Question 29: 
Question 30: 
Question 31: 
Question 32: 
Question 33: 
Question 34: 
Question 35: 
Question 36: 
Question 37: 
Question 38: 
Question 39: 
Question 40: 
Question 41: 
Question 42: 
Question 43: 
Question 44: 
Question 45: 
The Publishers support the continuation of the current fair dealing exceptions which apply a purposive test and, in the case of research and study, a quantitative test.  This can be contrasted to a test based on how the material may be used, which is inherent in a fair use regime and which, if adopted, would introduce significant uncertainty leading to, at best, confusion and at worst an encouragement to misappropriate a copyright owner's material and ongoing litigation.
The Publishers submit in particular that:
a.	the exception permitting fair dealing for the purpose of reporting the news should not be expanded directly or indirectly;
b.	the Copyright Act, 1968 (Cth) (Copyright Act) should make it clear that the communication of newspaper or magazine articles is not permitted under the fair dealing exception unless such activity is performed by an organisation which provides a news or information service and, with the exception of communication by way of broadcast, sufficient acknowledgement of the work is made.

Section 42 provides:
'(1)      A fair dealing with a literary, dramatic, musical or artistic work, or with an adaptation of a literary, dramatic or musical work, does not constitute an infringement of the copyright in the work if: 
(a)       it is for the purpose of, or is associated with, the reporting of news in a newspaper, magazine or similar periodical and a sufficient acknowledgement of the work is made; or 
(b)       it is for the purpose of, or is associated with, the reporting of news by means of a communication or in a cinematograph film.'
Section 103B provides:
'(1)      A fair dealing with an audio-visual item does not constitute an infringement of the copyright in the item or in any work or other audio-visual item included in the item if: 
(a)       it is for the purpose of, or is associated with, the reporting of news in a newspaper, magazine or similar periodical and a sufficient acknowledgement of the first-mentioned audio-visual item is made; or 
(b)       it is for the purpose of, or is associated with, the reporting of news by means of a communication or in a cinematograph film.'
It will be noted that subsections 42(1)(a) and 103B(1)(a) require that:
a.	a fair dealing be for the purpose of, or associated with, the reporting of news in a newspaper, magazine or similar periodical publication; and
b.	a sufficient acknowledgment be made of the work that is being dealt with.
Sufficient acknowledgment requires identifying the work that is being dealt with by title and author.
However, subsections 42(1)(b) and 103B(1)(b) have neither of these constraints and a number of organisations have recently sought to rely on the fair dealing defence in relation to their use of articles and photographs originally published in newspapers and magazines when:
c.	posting articles and photographs, which relate to their products or services, on their websites; and
d.	emailing articles and photographs, which relate to their products or services, to other organisations or clients.
By way of example, a photograph had been purchased by a newspaper on an exclusive basis for a considerable sum and later published.  An organisation recently reproduced and communicated the photograph as it showed one of its products taken at a high profile function on its website and in emails to its clients. On being challenged, the organisation claimed that the reproduction and communication of the photograph on its website and in emails to its clients was a fair dealing for the purpose of reporting the news.
Ultimately, the matter was settled and the terms of settlement prevent identification of the organisation.  However, this is one example of what the Publishers are concerned may become an increasingly common occurrence.
The fair dealing defence was introduced to protect the role of the media in informing the public about matters of current concern (see for example Ashdown v Telegraph Group Ltd[1]).  It was not introduced to permit people to use news items taken from newspapers or magazines to publicise their products, under the guise of reporting the news.
The relevant provisions of section 42 of the Copyright Act in its original form were:
'(1) A fair dealing with a literary, dramatic, musical or artistic work, or with an adaption of a literary, dramatic or musical work, does not constitute an infringement of the copyright in the work if –
…
(b) if it is for the purpose of, or is associated with, the reporting of news by means of broadcasting or in a cinematograph film.
…
(3) This section applies where a literary, dramatic, musical or artistic work, or an adaptation of a literary, dramatic or musical work, is caused to be transmitted to subscribers to a diffusion service in like manner as it applies where such a work or adaptation is broadcast.'
A transmission of a work over a diffusion service was defined as the transmission of a work in the course of distributing a broadcast or other matter over wires, or over other paths provided by a material substance, to the premises of subscribers to the service.
The extension of the broadcast fair dealing provision to diffusion services was simply an extension of the broadcasting right and was very narrow in its application.
The Copyright Amendment (Digital Agenda) Act 2000 (Cth) (Digital Agenda Act) amended section 42 by omitting 'broadcasting' and substituting it with 'a communication' in subsection 42(1)(b).  Subsection 42(3) was repealed because the concept of 'transmission over diffusion service' was encompassed in the new communication right.
The Explanatory Memorandum to the Digital Agenda Act stated that the reason for the amendments to section 42 was that under the then Copyright Act, owners of copyright only had 'limited technology-specific transmission rights'.[2]  The omission of 'broadcasting' and substitution with 'a communication' in most places in the Copyright Act replaced technology-specific rights with technology-neutral rights to ensure that future amendments to the Copyright Act would not be needed as technology developed.  The effect of amending section 42 of the Copyright Act was to extend the fair dealing defence for the purposes of reporting the news to any form of communication as opposed to an organisation operating under a broadcasting services licence.
The new broad based technology-neutral right of communication to the public was intended to 'provide copyright owners with greater protection for their material in the new digital environment'.[3]  In his second reading speech, Mr Williams said that the right would 'substantially improve protection for many important industries that publish or distribute copyright material on the Internet'.[4]  However, newspaper and magazine publishers are finding that in this respect they in fact receive less protection, as organisations which are not media organisations are purporting to rely on the fair dealing defence to reproduce and communicate newspaper articles on the internet, often to promote their own products and services, under the guise of reporting the news.
The change in the Copyright Act to include all 'communications' in the fair dealing defence had the unintended effect of greatly extending the scope of the defence by potentially making it available to anyone who wished to communicate a news item to the public, as opposed to a small number of organisations which supplied a broadcasting or diffusion service.
Publishers, through the Copyright Agency Limited (CAL), do provide licences to allow organisations to place articles on their intranets, send them to clients and make them available on the internet subject to conditions on the quantity of articles that can be used, the length of time on which they can appear on an organisation's website and payment of an appropriate fee.  Photographs also can be purchased, usually directly from the publisher.  If the fair dealing provisions can be used as claimed, a significant part of the business of the Publishers will be undermined, in a market which is already facing severe pressures.
While the Publishers are aware that the fair dealing defence may not always be successful when it is relied upon to reproduce newspaper or magazine articles in the circumstances described above, it would provide far greater certainty if the Copyright Act were amended to make it clear that the fair dealing defence will only apply if the communication is made by an organisation which provides a news or information service, including a publisher of a newspaper, magazine or similar periodical publication.
In addition, although the Publishers acknowledge that it will be difficult for broadcasters and those reporting the news by a cinematograph film to provide an acknowledgement of the work they are dealing with, there appears to be no reason why communications of a work by newspapers, magazines and similar services should not require sufficient acknowledgement under subsection 42(1)(b). This is particularly so given that such acknowledgement is required under subsection 42(1)(a), creating an inconsistency between the two subsections. The Publishers submit that this be resolved by incorporating a requirement for sufficient acknowledgement into subsection 42(1)(b), with an exception for broadcasters and cinematograph film.
These two objectives could be achieved by amending subsection 42(1)(b) to provide:
'(b)      it is for the purpose of, or is associated with, the reporting of news by a  news or information service, or by a  broadcaster licensed under the Broadcasting Services Act 1992 (Cth): 
(i)       by means of a communication and, except in the case of broadcasts, a sufficient acknowledgment of the work is made; or 
(ii)         in a cinematograph film.'
"News or information service" means a service conducted by an organisation whose principal business is the commercial provision of news or information to the public, including the publisher of a newspaper, magazine or similar periodical publication.
What is Fair?
The defence of fair dealing was examined in Fairfax Media Publications v Reed International Books Australia Pty Ltd (Reed).  In what was clearly an obiter finding, Justice Bennett expressed the view that, had Reed been infringing copyright in providing its news aggregation business, such activity would have attracted the fair dealing defence.
With respect to her Honour, this aspect of the judgment contained various logical inconsistencies including when she said that because the summaries of news did not infringe Fairfax's copyright the fact that the summaries may act as a substitute for the reading of an article in the AFR was not relevant.  In fact, as she had found that no infringement occurred, this part of the judgment was not relevant.
Be that as it may, her Honour appeared to be basing her primary argument that the dealing was 'fair' on the basis that the use was transformative because Reed had added something new.  This was despite the fact that the whole Reed aggregation business was totally dependent upon the very much greater investment of the newspaper publishers.
The Publishers would be concerned if the ALRC adopted a 'transformative use' concept in conjunction with either a fair use or fair dealing regime and propose that in determining what is 'fair', the Copyright Act should be amended to have regard to the fact of whether the use is a commercial use and the effect that this may have on the commercial activities of the original author or publisher in addition to any other appropriate criteria.
The Publishers also submit that the fair dealing defence should be revised to explicitly state that it would not be available to an organisation whose news service is principally that of a news aggregator until after a specified time, as the Publishers propose below.

[1] [2002] Ch 149.
[2] Explanatory Memorandum, Copyright Amendment (Digital Agenda) Bill 1999(Cth), 5.
[3] Explanatory Memorandum, Copyright Amendment (Digital Agenda) Bill 1999(Cth), 33.
[4] Commonwealth, Parliamentary Debates, House of Representatives, 2 September 1999, 9748 (Daryl Williams).
Question 46: 
Question 47: 
The Publishers submit that the Copyright Act should not be amended to include a fair dealing exception for the purpose of quotation. This broad exception would severely limit a copyright owner's ability to obtain value from its efforts in producing the material, thus removing an important incentive to the creation of new material.
The current fair dealing exceptions are limited to purposes which are socially beneficial or which do not detract from the commercial competitiveness of the copyright owners' work. For example fair dealing for the purpose of parody or satire was introduced as it 'promotes free speech and Australia’s fine tradition of satire ...'[1] However, a fair dealing exception for quotation focuses on the type of use, with no consideration of whether the purpose of the use will be socially beneficial or how it competes with the copyright owner's exploitation of its material. This would be an unnecessary and unjustified intrusion on a copyright owners rights.
In addition, although the quotation would need be a fair dealing, this would provide little certainty as there is no purpose for which the dealing would be judged against to determine if it is fair.
The Publishers acknowledge that Australia is permitted to introduce an exception for quotations  under Article 10(1) of the Berne Convention which provides as follows:
'It shall be permissible to make quotations from a work which has already been lawfully made available to the public, provided that their making is compatible with fair practice, and their extent does not exceed that justified by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries.'[2]
However, the Publishers note that the reference to 'press summaries' was originally inserted into the quotation right via the Brussels revision to the original Berne Convention in 1948, when the ability to make 'press summaries' would necessarily have been restricted to summaries made available and delivered in hard copy, which generally appear a significant period after the publication of the original article. The publishers submit that this newspaper exception should not apply in today's digital age where press summaries can be made within hours, if not immediately, after the publication of the original article and therefore directly complete with the original article.
Article 10(1) also expressly requires that the making of the quotation is compatible with fair practice. The Publishers are of the view that in the digital age, it is highly likely that in many cases quotation that does not fall within the current fair dealing exceptions will not be fair. The current fair dealing exceptions already provide sufficient protection for quotations for purposes which justifiably should not require remuneration to the copyright owner (as they are socially beneficial or do not compete with the copyright owner's exploitation of the work). Therefore, the Publishers submit that a fair dealing exception for the purposes of quotation would  not meet the  requirements of Article 10(1) as any general quotation right under the exception is unlikely to be fair.
However, if any new specific fair dealing exception is introduced it should be based on the purpose of the use, not the type of use, as is the case with the current fair dealing exceptions.

[1] Commonwealth, Parliamentary Debates, Senate, 19 October 2006,  1-3 (Phillip Ruddock).
[2] Berne Convention for the Protection of Literary and Artistic Works, 24 July 1971, [1978] ATS 5,  Article 10(1) (entered into force 10 October 1974, entered into force for Australia on 1 March 1978).
Question 48: 
Question 49: 
Question 50: 
Question 51: 
Question 52: 
The Publishers do not support the introduction of a broad, flexible exception into the Copyright Act.
The interpretation of a broad, flexible exception is likely to be unclear, resulting in uncertainty for both copyright owners and those who wish to rely on the exemption. Copyright owners and users would not be able to predict with any degree of certainty whether the exception does or does not apply to their particular facts.  This uncertainty could only be remedied through the development of judicial precedent, which is likely to be a slow, costly and reactive process.
In addition, it is possible that the introduction of a flexible fair use exception may breach the three step test that forms part of Australia's international obligations. The uncertainty described in the paragraph above is likely to fall foul of the first step, that the exception must be confined to 'certain special cases'. In addition, given the potential breadth of a broad, flexible fair use style exception, uses falling with the exemption are likely to conflict with a normal exploitation of the work and unreasonably prejudice the legitimate interests of the author, in breach of steps two and three. In regards to the third step, it is also noted that the fair use regime would not require the payment of remuneration to the owner.
The Publishers note that, although the U.S. fair use regime has never been challenged on the ground of non-compliance with the three step test, the issue of its compliance with the test is not without controversy.
Given the disadvantages outlined above, the introduction of a broad fair use exception would need to be supported by strong evidence of the need for the exception. However, the Publishers are of the view that the current fair dealing exceptions sufficiently protect the public interest in allowing uses of works with socially beneficial purposes or uses which do not detract from the commercial competitiveness of a copyright owners' work. Further, the Publishers submit that any flexible fair use exception will severely detract from the value of the underlying work, causing detriment to the public interest in encouraging the creation of this material.
Question 53: 
As stated in the response to question 52, the Publishers do not support the introduction of a new broad, flexible exception. As the fair dealings exceptions are for limited specific purposes and are supported by many years of judicial interpretation, copyright owners and users are able to predict with relative certainty whether an exception will apply to their particular circumstances. There appears to be no reason to substitute this predictability with the uncertainty associated with a fair use style exception that could be subject to different interpretations as Australia does not have the advantage of many years of judicial interpretation of 'fair use' as is the case in the United States.
The Publishers are also concerned that if a new broad, flexible exception is introduced, and all current fair dealing exceptions were removed, that it may result in arguments that the current fair dealing exceptions have been relaxed.  The Publishers believe that it would be better to retain the current fair dealing exceptions to make it clear that the current position remains unchanged.
This approach will result in a reasonable degree of certainty for both publishers and others and avoid unnecessary dispute, and possibly litigation.
Question 54: 
Question 55: 
Other comments: 
The publishers submit that the press aggregators’ practice of 'free riding', by so called 'abstracting' of newspaper or magazine articles should be prohibited under the Copyright Act until the eighth day after the original publication first appears.
The 'Free Riding' Issue
An issue of great concern to the Publishers is the practice of aggregators who collect articles from various newspapers and magazines, create summaries (or abstracts) of those articles and monetise those summaries – the practice of which is to provide a substitute.  Those summaries are often published within hours of the publication of the newspaper or magazine in which they were first published.  An example of this practice is the ABIX service provided by Reed.
The news aggregators generally seek to avoid infringement by only copying small parts of articles and only providing summaries/abstracts.
In proceedings taken against Reed by Fairfax Media Publications,[1] Fairfax alleged that by reproducing over half the headlines of the articles in The Australian Financial Review (AFR) in its ABIX service on a regular basis, Reed was infringing its copyright in the headlines as well as copyright in the AFR itself.  Fairfax was unsuccessful in this challenge.  However, the Court of Appeal in the United Kingdom came to a contrary conclusion in Newspaper Licensing Agency Ltd v Meltwater Holding BV.[2]
Modern digital technology allows aggregators to obtain early editions of a newspaper or magazine either online or by purchasing a physical copy and produce their own news service by abstracting the news articles.  Each edition of major print newspapers are usually published and obtainable very early each day.  The news aggregators with a very small number of employees can briefly scan the publications for articles they believe to be of greatest interest to clients, prepare abstracts and then circulate them to their clients at the same time as many people are reading their newspaper for the first time.
The ABIX service at its website states:
'ABIX news abstracts provide users with simple one paragraph summaries of today's critical news information.  This means you can easily stay abreast of key issues affecting your business without having to read through the full-text versions of news stories.
LexisNexis' commitment to providing you with a wide variety of daily news summaries means customers can expect high quality abstracts from major Australian publications such as The Australian Financial Review, The Australian, The Sydney Morning Herald and The Age.'[3]
(our emphasis)    
It is abundantly clear from the above that ABIX is promoting itself as an alternative to a newspaper and therefore a competitor, and does so by relying upon the extensive resources of the newspapers with which it competes.
News aggregators are able to do this because digital technology allows the abstracts to be obtained (in the case of online material) written and communicated within a very short space of time. The Publishers submit this practice should be curtailed. 
The Purpose of Copyright Law
The Publishers acknowledge that there is a continuing debate about the purpose of copyright law.  This is a debate which has exercised the minds of many people for many years and it is not the intention of the Publishers to express a view on what should be regarded as the definitive approach.
In the Issues Paper the ALRC has set out various reasons given for the existence of copyright protection, which vary greatly.
The Publishers submit that one acknowledged reason for the existence of copyright is to 'encourage learning and the dissemination of knowledge'.
The newspaper and magazine industry is facing stresses which have nothing to do with copyright.  New media has provided a vast number of ways in which advertisers can reach their market, all at the expense of traditional publishers.  The Publishers are having to meet these challenges.  They submit however that it is entirely consistent with at least one purpose of copyright law that the creative endeavours of journalists in creating news and other information content, including through commenting on current events and culture, should be protected so they are not forced to meet competition from organisations that are competing using the very products which the Publishers publish.
While in Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd[4] it was found that the news aggregator, Reed, was not breaching copyright, news aggregators are in fact severely diminishing the value of the copyright in articles which they abstract.
International Solutions
The free-riding issue has been addressed in the United States (US) through the hot news misappropriation doctrine developed in 1918 and more latterly in Germany where there is a proposal to grant news publishers ancillary copyright protection. 
The US Hot News Misappropriation Doctrine
In the US the courts developed what is referred to as the hot news misappropriation doctrine to meet the type of activity about which the Publishers now complain. This doctrine protects a party who has expended resources gathering and disseminating news or other time-sensitive information as a significant part of its business, where another party takes that information and publishes it as its own in competition with the first party.
The doctrine was established in International News Service v Associated Press[5]. The parties in this case were competitors in the gathering and distribution of news to newspapers throughout the US. During the early part of the war, International News Service (INS) was prevented from cabling back information on World War I, as it was believed that the owner sympathised with Germany. To continue providing its members with this news, INS obtained Associated Press's news from its bulletin board postings, early edition newspaper on the East Coast and employees (through bribes). INS would rewrite the articles using the facts obtained and distribute it to its member papers, often releasing the papers on the West Coast before, or at the same time as, Associated Press's members.
Copyright law at the time did not apply to this fact situation on the basis that INS was only copying the facts contained in the news articles. However, the Supreme Court found in favour of Associated Press, holding that INS had engaged in a form of unfair competition. The Court stated that:
'the process amounts to an unauthorized interference with the normal operation of the complainant's legitimate business precisely at the point where the profit is to be reaped, in order to divert a material portion of the profit from those who have earned it to those who have not; with special advantage to the defendant in the competition because of the fact that it is not burdened with any part of the expense of gathering the news.'[6]
The Court ordered that that INS be restrained from using the news until its commercial value had passed away. 
While the hot news doctrine has not yet been applied to the practice of online news aggregating, it will soon be tested in this context. On 14 February 2012, the Associated Press filed a lawsuit against news aggregator Meltwater US Holdings Inc in the US District Court for the Southern District of New York.[7] The Associated Press claims that Meltwater News is guilty of copyright infringement, removal/alteration of copyright information and hot news misappropriation. This case is yet to be heard.
The fact that there have been few cases based on the doctrine can be put down to the fact that the unfair competition law only exists in some states and because it is only comparatively recently that news aggregators have become a more prolific source.
Proposed New Ancillary Copyright Protection for News Publishers in Germany 
On 29 August 2012, the German cabinet agreed to a new draft law that introduces ancillary copyright protection for news publishers into the German Copyright Act 1965. The new law will require search engines and news aggregators to pay news publishers a fee for snippets of articles reproduced on their sites. This law has not yet been passed by the German Parliament.
The draft law will introduce a new section 87f into the Copyright Act 1965 which will provide that the producer of news materials (news publisher) shall have the exclusive right to make those materials publically available, in whole or in part, for commercial purposes. Only articles provided as part of a collection of journalistic articles periodically published that is deemed typical of a publishing house will be protected. Links to the news stories will not be protected.
The new right only applies to the use of the news publisher’s material by search engines and news aggregators. This is outlined in subsection 87g(4), an unofficial translation of which provides:
'The provision of public access to news publications or parts thereof shall be permissible to the extent that this access is not provided by commercial operators of search engines or commercial providers of services that aggregate this content in a respective fashion.'[8]
Accordingly, bloggers who quote articles they comment on, companies with other commercial purposes and private users will fall outside the scope of the section and will not be required to pay for their use of the news material.
The right expires one year following publication of the news material (subsection 87g(2)).
The explanatory material provided with the draft law provides that the purpose of the ancillary copyright protection:
'is to take due account of news publishers' newly emerging needs for protection ... news publishing houses find themselves increasingly faced with a situation where other users systematically access their published materials for the sake of their own added value, using these materials in a manner that far exceeds the mere insertion of links to the websites on which the materials were originally published.'
Proposed Solution
The Publishers submit that the Copyright Act should be amended to introduce a prohibition on re-publication of abstracts of newspaper or magazine articles published in Australia either electronically or in hard copy until the eighth day after such publication first appears.
The elements of the prohibited activity would be:
a.	the summaries of newspaper and magazine articles are prepared;
b.	for the purpose of sale to the public;
c.	without the permission of the publisher; and
d.	are sold within seven days of the article being first published.
It would not extend to news summaries prepared, for example, by companies for the information of their staff or ad hoc news commentary provided as a service to a client without expectation of payment.
This proposal will protect the value of the copyright in articles from which free-riding news aggregators abstract as the practice of news aggregators is to provide a substitute.[9]
The Publishers submit their proposal is consistent with the Government policy of providing limited protection to local book publishers by, in effect, giving book publishers a 30 day window of protection before allowing the parallel importation of books.
Originally, the Copyright Act contained a total prohibition on parallel importation of books. However, in 1991 the exception for books not published in Australia within 30 days was added, in order to strike a balance between consumers' interest in increasing the availability of books at competitive prices and copyright owners' interest in protecting the fruits of their labour.[10]
Relevantly, in formulating this limited exception, Parliament was careful not to tip the balance too far by removing the prohibition on parallel importation completely. Senator Collins in his second reading speech commented as follows:
'If all restrictions were removed on the importation of books, the influx of cheap overseas books produced for much bigger domestic markets would threaten economic loss to both Australian publishers and Australian authors. While consumers might benefit from such abolition by gaining access to the cheapest priced overseas books, they as well as Australian authors and publishers would suffer from the resultant decline in distinctively Australian literature.
...
The Government concluded that complete repeal of the importation provisions would pose too great a risk to Australian literature in general and to both Australian authors and Australian publishers in particular.'[11]
Senator Collins also noted that the limited exemption accommodates the legitimate needs of book publishers, who can protect their investment provided they supply it promptly.
The need to protect copyright owners from parallel importation was further recognised when Parliament refused to accept the proposed Schedule 2 of the Copyright Amendment (Parallel Importation) Bill 2002 which would have removed the remaining prohibition against parallel infringement of books and periodicals.
The Publishers submit that the proposal to protect publishers' efforts in compiling their news items for a limited period of seven days serves the same purpose as the copyright owners' protection against parallel importing.
Under the Publishers' proposal, the time limit proposal would only apply to the organisations which commercially exploit articles in newspapers and magazines by providing abstracts. The current provisions of the Copyright Act would still apply in relation to infringement by reproducing a substantial part of an article.
The Publishers submit that the proposal is consistent with the purpose of copyright protection; has been recognised, at least in the United States and Germany as being desirable; and provides no greater protection than is reasonably necessary.
The Publishers also submit that the proposal is consistent with Australia's obligations under Article 10(1) of the Berne Convention which, as we previously noted in our response to question 47, requires that any quotation from a work be compatible with fair practice. News abstracting today does not meet this requirement as it directly competes with the newspapers from which articles are abstracted and does so by relying upon the extensive resources of those newspapers. However, the Publishers acknowledge that the detrimental competitive effect of re-published abstracts diminishes with time and have therefore limited the proposed prohibition on re-publication to the seven days after the publication first appears to ensure that the proposal only covers re-publications that would be incompatible with fair practice in accordance with Article 10(1).

[1] Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd (2010) 189 FCR 109.
[2] [2011] EWCA Civ 890.
[3] LexisNexis, ABIX News Summaries <http://www.lexisnexis.com.au/en-au/products/abix-news-summaries.page>.
[4] (2010) 189 FCR 109.
[5] 248 US 215 (1918).
[6] International News Service v Associated Press 248 US 215 (1918), 240.
[7] Case caption Associated Press v. Meltwater US Holdings, Inc., et al., No. 12 Civ. 1087 (S.D.N.Y.),
[8] Sourced from Christoph Keese, English translation of ancillary copyright for publishers as passed by German government (3 September 2012) Der Presseschauder, <http://www.presseschauder.de/english-translation-of-ancillary-right-for-publishers-as-passed-by-german-government/> accessed 14 September 2012.
[9] Copyright Act 1968 (Cth) ss 37 and 44A.
[10] Copyright Amendment Act 1991 (Cth) s 5.
[11] Commonwealth, Parliamentary Debates, Senate, 16 May 1991, 3596 (Senator Collins).
File 1: 
the_combined_newspapers_and_magazines_copyright_committee.docx
File 2: