Australian Law Reform Commission inquiry into 
Copyright and the Digital Economy

Submission in response to ALRC Issues Paper by the 
Music Council of Australia
December 2012

Introduction
Thank you for the opportunity to make submissions in response to the Issues Paper published by the Australian Law Reform Commission (ALRC) in its inquiry into Copyright and the Digital Economy. 
The Music Council of Australia (the MCA) is the peak music organisation representing the Australian music community. Each of the members of the MCA is assigned to, and represents, a particular aspect or sector of the Australian music community, such as music creation, production, distribution and education. The MCA is Australia’s representative to the International Music Council, which is based at UNESCO headquarters in Paris.
The MCA submits that the current exceptions to copyright and statutory licences in the Copyright Act 1968 (Cth) (Copyright Act) are generally adequate and appropriate in the digital environment.  The MCA considers that the exceptions do not need to be expanded to cover new online and digital uses of copyright works and other subject matter (material).  If the ALRC considers otherwise, then the MCA strongly encourages the ALRC to consider and adopt mechanisms which enable authors and other owners of copyright material to receive equitable remuneration for such related use.  Any expansion of exceptions to copyright infringement without corresponding mechanisms to enable equitable remuneration for authors and owners of copyright risks undermining the various business models that have been developed, and will be developed in the future, in connection with the online and digital use of such material. 
This submission sets out and subsequently addresses each of the questions posed by the Issues Paper.  Where this submission does not expressly address a question posed by the Issues Paper, this indicates that the MCA does not wish to make a submission on that issue at this stage. The MCA may choose to make submissions on those issues at an appropriate time later in the inquiry.
Question 1. The ALRC is interested in evidence of how Australia’s copyright law is affecting participation in the digital economy. For example, is there evidence about how copyright law:
(a)	affects the ability of creators to earn a living, including through access to new revenue streams and new digital goods and services;
(b)	affects the introduction of new or innovative business models;
(c)	imposes unnecessary costs or inefficiencies on creators or those wanting to access or make use of copyright material; or
(d)	places Australia at a competitive disadvantage internationally.
The MCA considers that, from the perspective of the Australian music community, Australia's copyright law encourages the participation of music creators, rights holders, users and third party investors in the digital economy.  It is the grant of exclusive rights to copyright owners that provides incentives for creators, rights holders and other parties to invest in both the creation and online distribution of copyright material in order to generate associated revenue.  For example, in recent years, many new (and legitimate) digital business models have developed, including: 
(a)	music streaming services such as Spotify, MOG (operated by Telstra), Rdio, Deezer, Samsung Music Hub, Music Unlimited (operated by Sony) and JB Hi-Fi NOW;
(b)	online content aggregators and distributers ReverbNation and Tunecore; 
(c)	online radio stations such as Radar Radio, Nova Nation, and The Edge Digital; and
(d)	new music 'discovery' platforms, such as Triple J's Unearthed, which allows unsigned artists to make their content available for free (streaming and/or download).
The above models often supplement and facilitate sales from downloads via Apple iTunes and other online vendors.  The benefits derived from these new business models flow to:
(a)	authors and content creators, who have new exploitation channels and income streams;
(b)	rights holders (such as individuals, publishers and record companies), who have new distribution channels and revenue streams;
(c)	digital media businesses (such as streaming platforms and online radio), who are able to develop new business models that facilitate the growing consumer demand for digital content consumption; and
(d)	consumers, who have easier and cheaper access to a wider range of legitimate content.
The MCA believes that, under existing copyright law:
(a)	the number and variety of new business models operating in Australia are likely to expand;
(b)	the lower entry costs associated with the production of content in the digital environment will mean that a wider variety of content creators will be able to benefit from the business models available in the online environment;
(c)	consumers will adopt new business models enabling access to legitimate content; and
(d)	the above factors will enable third parties and rights holders to develop new and innovative business models.
The MCA considers that the expansion described above is positive and will likely lead to an overall growth in revenue derived from music in Australia (or will at least supplant the revenue that has been eroded by illegitimate use), which will strengthen the ability of creators to earn a living.  The decreased costs of entry to, and participation in, the Australian market (as a result of technological developments enabling the efficient and cost effective recording and distribution of sound recordings) means that more musicians and composers are able to record, distribute and sell music in the digital economy than ever before.  
Guiding principles for reform
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?
In considering the current legal framework around copyright in the digital environment, the ALRC should be guided by five fundamental principles: 
1.	the prevalence of infringing behaviour does not reflect a 'need' for exceptions to copyright;
2.	equitable remuneration for the use of copyright material (and in the case of this particular inquiry, digital or online use); 
3.	clarity in drafting and interpretation; 
4.	the need to foster public education around access to and use of copyright material; and 
5.	harnessing technology to facilitate efficient licensing systems and encourage innovation.
Each of these principles is discussed in more detail below.
1. 	The prevalence of infringing behaviour does not reflect a 'need' for exceptions to copyright
From time to time, statements are made to the effect that copyright law is inconsistent with public behaviour.  For example, the Explanatory Memoranda to the Copyright Amendment Bill 2006 stated that 'the lack of provision in the Act of copying for private or personal use… is increasingly out of step with consumer attitudes and behaviour.'  Such statements are often based on the premise that, because segments of the public are engaging in certain behaviour which would amount to an infringement of copyright, the Copyright Act should be amended to provide an exception for such use.  
The MCA considers that the fact that public behaviour is said to be out of step with copyright law will often be irrelevant to the question of whether a new exception to copyright should be introduced.  This proposition is best illustrated by way of an example, namely, in respect of the exclusive right of the public performance of a musical work.  If this right is characterised in terms of public behaviour, it is clear that the public performance of musical works is, and has been, widespread throughout the Australian community.  Yet, in the absence of a licence from the Australasian Performing Right Association (APRA) (or, if the owner of the relevant musical works is not a member of APRA, the relevant copyright owner) such public performance would constitute an infringement of copyright.
In the above example, the existence of certain public behaviour does not in itself indicate that any uses connected with that particular public behaviour should be covered by an exception to copyright.  To the contrary, if there were an exception to copyright for the public performance of musical works, creators and owners of copyright material would not be able to receive equitable remuneration for the public performance of their music works and would therefore be less likely to create, or invest in the creation of, musical works for others to perform in public.  The following three factors are all essential to the prevailing copyright regime in respect of the public performance of musical works:
(a)	the existence of an exclusive public performance right under section 31(1)(a)(iii) of the Copyright Act; 
(b)	the voluntary licensing regime administered by APRA; and
(c)	the public behaviour in the form of the public performance of musical works.
In the above example, the existence of certain public behaviour in parallel with an exclusive right granted to copyright owners does not raise the need for an exception to copyright infringement.  To the contrary, it is the nature of the combination of the exclusive right, together with the voluntary licensing regime administered by APRA and associated public behaviour, that together forms the mechanism by which the outcomes of public access to, and equitable remuneration for use of, copyright material are achieved. 
2.	Equitable remuneration
The MCA refers to the first paragraph of the Attorney-General's terms of reference for this inquiry, which states that the inquiry should have regard to 'the objective of copyright law in providing an incentive to create and disseminate original copyright materials'.  The MCA considers that the key practical incentive arising in connection with this principle is the ability of copyright authors and owners to receive remuneration in connection with uses of copyright material.  As such, the MCA is of the strong view that creators and other owners of copyright material should be provided with equitable remuneration for the online use of the copyright material that they create.  
The MCA acknowledges that copyright law balances the need for public access to copyright material against the rights of creators to control their copyright material and receive remuneration for the use of such material.  However, from a practical perspective, the MCA believes that to a large degree the current copyright balance has recently been significantly shifted in favour of users of copyright due to technological developments arising in connection with the digital economy and the Internet.  As a result of such developments, members of the public are now able, from a practical perspective, to access an almost unlimited amount of copyright material online, and make unlimited copies of such material, often for free.  Therefore, the MCA considers that the general interest of Australians to access, use and interact with content in the advancement of education, research and culture has substantially been addressed due to the technological developments referred to above in the context of the operation of the current copyright law.
The MCA considers that, as a general statement of principle, online use of materials should not be free and should not be remunerated any differently from other 'real world' uses (although the online remuneration mechanisms may differ due to the nature of the technology). 
Provided mechanisms are in place to prevent derogatory online uses of copyright material, the MCA considers that one of the key objectives of this inquiry should be to determine how equitable remuneration can be provided to creators for the online use of, and access to, their materials.  This objective will not be achieved by creating blanket exceptions to copyright infringement that permit unremunerated (that is, free) uses of copyright material.  The objective will be achieved, however, by structuring any amendments to the Copyright Act (to the extent that they are considered by the ALRC to be necessary) in a manner that provides additional revenue streams to authors and other owners of copyright as a result of new and future forms of online use and/or new business models.
To the extent that online or other digital businesses materially rely on or facilitate the use of or access to copyright material in connection with their business, such use by those businesses needs to be remunerated on an equitable basis.
3. 	Clarity 
A key issue with the Copyright Act is its level of complexity and the range of concepts that are not clearly articulated.  This is particularly the case in some of the exceptions to copyright.  For example, the Full Court of the Federal Court of Australia commented in National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd (2012) 201 FCR 147 that it 'found the questions raised in the appeals to be of some difficulty and considerable uncertainty', including the question of whether Optus could bring itself within the scope of the s 111 exception.  As such, to the extent amendments to the Copyright Act are made as a result of this inquiry, they should be clearly expressed and accompanied by detailed guidance in the Explanatory Memorandum and other materials.  
In particular, the MCA considers it to be vitally important that the operation of any exceptions are considered having regard to the operation of other relevant sections of the Copyright Act, particularly, any limitation on remedies that might be available under the safe harbour regime (the scope of which could potentially be extended as a result of the inquiry by the Attorney General's Department).  The reason for this is simple: the safe harbour regime depends on actual or potential infringement of copyright to trigger the various obligations of the parties. If an exception operates alongside the safe harbour regime the nature and extent of such interaction must be clearly established and communicated to the stakeholders in the context of the amendments to the Copyright Act and the explanatory materials.  
An example of where the MCA submits such uncertainty as arisen in the past is in relation to the operation of the exception in s. 112E of the Copyright Act and the safe harbour regime.  Section 112E was originally introduced in 2000 as part of the Digital Agenda Reforms. The safe harbour regime was subsequently introduced in 2004 under the US Free Trade Agreement Implementation Act 2004(Cth).  It appears that in the course of introducing the safe harbour regime, minimal consideration was given to the nature in which the exception and the safe harbour regime would interact and operate.  In the proceeding, Roadshow Films Pty Ltd v iiNet Ltd (2011) 194 FCR 285, the respondent in that case relied at first instance and on appeal to the Full Court on both the exception under s.112E and the limitation on remedies under the safe harbour regime.  The judgments of the Federal Court at first instance and on appeal illustrate the level of complexity that the parties and the Court had to address in the course of construing the operation of both an exception and a limitation on remedies that potentially covered the same or similar ground.  The MCA therefore recommends that any exceptions be considered by the ALRC having regard to the potential current and future operation of the safe harbour regime.  
4. 	Education
Education is closely related to the points on clarity above which are repeated. To the extent that copyright law is uncertain, that uncertainty might be reduced by, among other things, effective public education. 
In particular, the MCA believes that there needs to be more focus on copyright education in schools and tertiary institutions and to the general public.  Perhaps the Government could have regard to how the Privacy Commissioner operates in the privacy regulatory space by providing guidelines to organisations and individuals (which would not displace judicial interpretation, but arguably have a greater weight than commentary by third parties) and providing specific assistance on compliance issues. Possibly the new legislation could empower a particular body or a person to assist the public in respect of guidance and compliance related issues.
5. 	Harnessing technology to facilitate efficient licensing systems and encourage innovation
Finally, the MCA considers that the Government could assist rights holders and users of copyright material outside the sphere of legislative reform to facilitate a range of efficiencies in the administration and clearance of rights and encourage innovation in respect of the new business models emerging in the digital economy. For example, the Government could assist in the development and administration of systems and platforms that could facilitate the efficient identification of rights holders and related licenses and clearances.   The MCA considers that in light of the technical developments that have given rise to the issues referred to above, there may be a number of online systems, platforms and processes that can be developed, with the assistance of the Government, to facilitate the identification of rights holders and the efficient clearance of licences in the digital economy  (which may also precipitate a greater amount of revenue to be paid and received under such licenses). The MCA considers that such systems could benefit both:
(a)	users of copyright material (including the general public and other online businesses), by providing a platform where rights holders are identified by reference to a work and mechanisms are provided to enable users to contact such rights holders (or the relevant collecting society)  in respect of the necessary licenses; and
(b)	rights owners, by providing a platform which facilitates, and increases, user inquiries regarding licenses thereby increasing licence revenues.
Such systems could potentially achieve a range of outcomes:
(a)	they could facilitate the clearance of existing rights by identifying relevant rights held in relation to a work or other subject matter, indentify rights holders and facilitate communication with such rights holders for the purpose of obtaining licences;
(b)	they could enable the use and licensing of orphan works (referred to in more detail in Questions 23 and 24);
(c)	they could underpin the operation, administration, sampling and payment processes of copyright collection societies in respect of rights and enable more efficient communication and liaison with international collection agencies; and
(d)	they could facilitate the creation of new business models in respect of particular rights and/or uses of copyright material (by providing a technological platform which the market naturally adopts because it inherently increases revenue and decreases market inefficiencies) and generally encourage innovation and investment in online platforms and systems that support such new business models.
While the Government may view this as an area that should be funded and developed by rights holders, the MCA considers that such systems are likely to benefit both rights holders and users and therefore the Australian music community and the Australian economy in general. 
The MCA notes that other efficiencies in the administration and clearance of rights may also be achieved by way of statutory or voluntary licensing regimes.  As referred to in Question 40, as a general overarching principle, the MCA will favour statutory or voluntary licensing schemes over blanket exceptions because such schemes will enable the authors and owners of copyright material to receive equitable remuneration for corresponding uses of such material.  The MCA considers that particular uses of copyright material in the online environment are likely to give rise to the development of particular business or commercial models that would not have been possible without the use of such technology.  Those new business models may indicate new areas which could come under new or existing voluntary and statutory licensing schemes. 
Caching, indexing and other internet functions
Question 3. What kinds of internet-related functions, for example caching and indexing, are being impeded by Australia’s copyright law?
As referred to above in the response to Question 2, one potential problem with the scope of the ALRC inquiry is that it does not deal with the full range of exceptions and defences to infringement available under the Copyright Act.  In particular, the ALRC has been asked not to duplicate work being undertaken on the scope of the safe harbour scheme for ISPs.  Nonetheless, any amendment to the exceptions under the Copyright Act — particularly any amendment that is said to address conduct that is also addressed by the safe harbour scheme, such as caching — should be considered alongside, or preferably after the completion of, any proposed reforms to the safe harbour scheme and other relevant sections of the Copyright Act.  The MCA believes that issues relating to caching and indexing are able to be addressed under the safe harbour regime.
Other than the preceding comment, the MCA makes no further statement on this issue at this stage but may make further submissions at a later date.
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?
See the MCA's response to Question 3.
Cloud computing
Question 5. Is Australian copyright law impeding the development or delivery of cloud computing services?
The MCA considers that the first issue to be addressed by this question is the meaning and scope of the term 'cloud computing' which appears to be used in relation to a wide variety of different information technology services and/or systems.  The MCA understands that cloud computing refers to information technology services delivered over a network (often the Internet) on an aggregated basis which is scalable upon demand, so that the user may receive services, data and content from a service provider from, and using, different infrastructure and different locations (depending on whether the service provider was providing such services from a private cloud, a single-location cloud, a public cloud etc).  The MCA also understands that such cloud services can include Infrastructure as a Service (IaaS), Software as a Service (Saas) and Platform as a Service (PaaS) as well as other variants of such services.  
Based on the nature of cloud services (summarised above), the MCA considers that the defining characteristics of cloud computing services do not appear to raise any particular copyright issues that would not necessarily be raised if such services were provided on a "non-cloud" basis.  As such, the MCA does not think that cloud services are specifically being impeded by the Copyright Act (as compared with the provision of standard infrastructure, software and platforms not provided via a cloud).  For example, if a service provider provides a cloud IaaS service whereby users can store copies of sound recordings on that service provider's "cloud", this does not necessarily raise any particular issues relevant to that cloud services provider which are not also applicable to a service provider that provides the same service on a "non-cloud" basis (in other words, such copies are stored on a single local server).  
The MCA considers that the ALRC should therefore approach issues relating to cloud services no differently from any other digital/online services or use.  Based on the principles referred to in Question 2 above, if a cloud computing services provider is gaining a commercial benefit from exercising, or authorising the exercise of, the copyright owners' exclusive rights (most likely the right of reproduction and/or communication to the public), that conduct should be licensed and be subject to appropriate remuneration. 
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?
The MCA refers to its response to Question 5.  To the extent that cloud services are provided on an aggregated basis from different locations, the MCA considers that this does not result in such services deserving particular exceptions under the Copyright Act when compared to other information technology services that are not provided via a cloud (such as the provision of infrastructure, software and platforms other than via a cloud service).  As such, the MCA does not see why cloud computing services raise particular issues that are not already raised in the context of "non-cloud" systems and cannot see any basis on which a cloud computing exception should be introduced.  Nor should any of the existing exceptions be extended to capture cloud computing activities to the extent that such activities do not naturally come within such exceptions in their own accord.  
Given the issues referred to above, the MCA considers that cloud services should not be treated any differently to other information technology services. If a person, particularly a service provider, is doing (or authorising the doing of) acts comprised in copyright, this conduct should be licensed.  The MCA notes that the operation of the safe harbour regime under Part V, Division 2AA of the Copyright Act (and potential extension of that regime currently the subject of a review by the Attorney General's department) could potentially cover, among other things, cloud service providers. As such, the ALRC's consideration of this issue should have regard to any limitation on remedies available to such cloud service providers under the safe harbour regime (now or in the future).  While the MCA acknowledges that the safe harbour regime does not fall with in the terms of reference of this inquiry, any exception that potentially covers cloud service providers should be considered in light of the potential operation of the safe harbour regime. 
Copying for private use
Question 7. Should the copying of legally acquired copyright material, including broadcast material, for private and domestic use be more freely permitted?
The MCA considers that the exception for private and domestic use does not need to be expanded; it needs to be clarified.  A clear distinction must be drawn between burning a compilation CD at home to play on the kitchen stereo, on the one hand, and disseminating to 800 'friends' a video clip via social media such as Facebook.  The MCA has no issue with 'genuine' private or domestic use being permitted under the Copyright Act, as it is, for example, under section 111.  However, the MCA stresses the distinction between 'social' uses on the one hand and 'private or domestic' uses on the other.  Social uses of copyright material are by definition not private or domestic, and should not be the subject of an exception under the Copyright Act.  
One argument for more freely permitting copying and distributing of copyright material for private and domestic use could be that many would-be infringements are not pursued by the creator.  Dissemination of material on social media sites such as Facebook could also be said to be free publicity for the copyright owner.  However, social media providers, who actively encourage and benefit from such behaviour (and indeed ensure their platforms are designed efficiently to facilitate it) ought to obtain, and pay for, a licence for such facilitating such conduct. 
Whatever the solution, the relevant inquiry must be, 'in substance, what is actually taking place here?' If the ALRC arrives at the view that copying for private and domestic use should be more freely permitted, care must be taken to ensure that any exception does not permit businesses that operate platforms on a commercial basis to avoid remunerating copyright authors and other owners on an equitable basis.
For example, if the operations of an exception in relation to private or domestic use would have the effect that the service provider responsible for providing the platform which facilitates such use is not responsible for authorising the acts of its users (and is therefore not required to be licensed), then the ALRC should consider an alternative mechanism which still enables the authors and other owners of such material to receive equitable remuneration for the use of such material in connection with the commercial business of the service provider.
Question 8. The format shifting exceptions in the Copyright Act 1968 (Cth) allow users to make copies of certain copyright material, in a new (eg, electronic) form, for their own private or domestic use. Should these exceptions be amended, and if so, how? For example, should the exceptions cover the copying of other types of copyright material, such as digital film content (digital-to-digital)? Should the four separate exceptions be replaced with a single format shifting exception, with common restrictions?
The MCA does not believe that it is necessary to expand or amend the existing format shifting exceptions to copyright infringement.  If the ALRC nonetheless believes that these exceptions should be expanded, care must be taken to ensure that copyright owners are still equitably remunerated for the use of their works where such use is not private or domestic in nature or where such use is facilitated by service providers conducting a commercial enterprise.
Question 9. The time shifting exception in s 111 of the Copyright Act 1968 (Cth) allows users to record copies of free-to-air broadcast material for their own private or domestic use, so they may watch or listen to the material at a more convenient time. Should this exception be amended, and if so, how? For example:
(a) 	should it matter who makes the recording, if the recording is only for private or domestic use; and
(b)	should the exception apply to content made available using the internet or internet protocol television?
In the light of the Full Court of the Federal Court of Australia's decision in National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd (2012) 201 FCR 147, the question arises as to 'who' is making a copy of material that is stored by an automatic process on a services provider's server.  A similar question arises as to whether material that is made available online by a cloud computing services provider is made available 'to the public'.  The MCA considers that while academically interesting, such questions are not to the point.  If a service provider is obtaining a commercial benefit from the use of copyright material — that is, capturing the copyright owner's public — it should obtain a licence and pay remuneration to the copyright owner.  Such remuneration is a cost of doing business, like any other.
Again, regardless of who makes a recording, the relevant inquiry must be, 'in substance, what is actually taking place here?' Black letter considerations aside, it is a matter of looking at what is right, what is ethical, and what satisfies the stated objective of copyright law to encourage the creation and dissemination of original work.
The MCA takes no issue with the use of technology to facilitate users' private and domestic use of copyright material.  However, where commercial organisations are benefiting from the use of copyright material by communicating it to the public, those organisations should pay equitable remuneration to copyright and other owners.
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?
The MCA repeats its comments in respect of Question 9.  Any amendment in connection with making copies of material for the purposes of back-up or data recovery should not permit commercial enterprises (such as cloud computing services or 'locker box' services) to avoid remunerating copyright owners for what in substance amounts to the use of those owners' copyright materials.  Nor should the operation of the exception undermine existing technical and commercial arrangements (for example, it should not extend to the back-up of 'tethered downloads' in the case of users of subscription streaming services).   To the extent that an exception was able to be narrowly drafted to address these concerns, the MCA would not oppose such an exception in principle.  
Online use for social, private or domestic purposes
Question 11. How are copyright materials being used for social, private or domestic purposes—for example, in social networking contexts?
Copyright materials are being extensively used in social networking contexts.  For example, Facebook users frequently hyperlink to, or embed, YouTube videos.  Both Facebook and YouTube benefit from these uses of copyright material.  However, the YouTube video may not have been licensed for use by the relevant copyright owners.
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?
The MCA has no issue with "genuine" private or domestic use being permitted under the Copyright Act, as it is, for example, under section 111.  However, the MCA notes the express distinction in Question 12 between 'social' uses on the one hand and 'private or domestic' uses on the other.  Social uses of copyright material are by definition not private or domestic, and should not be the subject of an exception under the Copyright Act.  For example, many businesses use social media platforms for commercial ends.  In addition, social media platforms themselves, which actively encourage and benefit from social uses of copyright material (and indeed ensure their platforms are designed efficiently to facilitate it) ought to obtain, and pay for, a licence for such facilitating such conduct.  
Even if the ALRC were to recommend that an exception be introduced to permit individuals to use materials online for 'social' purposes, operators of social media platforms should still be required to obtain such a licence.  In this regard, the MCA understands that a number of social media service providers such as YouTube have entered into licensing and other commercial arrangements with music publishers, record companies, collecting societies and broadcasters in relation to the use of copyright material on their services.
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?
The MCA submits that, in the event that the ALRC recommends that an exception for the online use of copyright material for social, private or domestic purposes be created (a recommendation that the MCA does not support), then that exception should only apply to uses that:
(a)	are non-commercial; and
(b)	do not conflict with normal exploitation of the copyright material; and 
(c)	do not unreasonably prejudice the legitimate interests of the owner of the copyright.
In particular, social media platforms on which social uses of copyright material are made should be licensed, regardless of its users' purposes.  Again, the MCA emphasises the necessity for clarity in drafting, perhaps by reference to appropriate examples.
Transformative use
Question 14. How are copyright materials being used in transformative and collaborative ways—for example, in ‘sampling’, ‘remixes’ and ‘mashups’. For what purposes—for example, commercial purposes, in creating cultural works or as individual self-expression?
The MCA recognises that there are a number of musical genres which make extensive use of existing musical works and/or sound recordings.  For example,
(a)	hip hop and rap may frequently sample sound recordings and thereby reproduce those sound recordings and any underlying musical works subsisting in those sound recordings; indeed some works of hip hop may consist almost exclusively of samples of other sound recordings;
(b)	dance music will often remix existing sound recordings (and any underlying musical works) into a new sound recording;
(c)	in many different genres of music, artists will create a new copyright work by 'covering' (i.e performing and/or recording) an existing musical work, literary work and sound recording; and
(d)	musical genres themselves share a collective musical 'language', such that the genre itself forms a collective style. While this does not necessarily mean that copyright material per se is used, it does demonstrate the degree to which existing musical works provide the raw material for new copyright works.
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?
Consistently with what has been discussed previously in its response, the MCA's overarching position on transformative use is that the user of copyright material should pay for use on an equitable basis.  Where a transformative work (such as a remix or a hip hop track or a cover) is commercially successful and generates a market for the transformative work (which is often as large as that for the original work) there is no reason in principle that the transformative work should not have to pay for its 'raw material'.  To take one example, DJs who remix music can become well known in their own right and can be well remunerated. While the MCA does not detract in any way from the amount of talent and creativity involved in remixing, the original works themselves are an integral part of the end product; their creators should be rewarded accordingly.
Efficiency gains can be made to the process of facilitating access to the relevant rights in order to make use of works. However, the MCA believes that the market has dealt with or can deal with this concern.  For example, it is possible for DJs to acquire easily the relevant rights from collecting societies in order to be able to perform copyright works in public, simplifying what could otherwise be a prohibitively difficult process to gain all relevant rights for the musical works and sound recordings they might want to use. 
In contrast, attempting to draft an exception that allows use of copyright works for transformative uses not only removes the ability for existing copyright owners to be remunerated and removes the market incentive to improve the process of licensing, it creates a significant amount of uncertainty regarding what a 'transformative' use is, versus a 'non-transformative' use.  Inevitably a difficult judgment will have to be made as to the actual artistic or musical quality of the resulting work vis-à-vis the original work to determine whether the former is transformative. This is an inquiry that the Courts have tried to avoid at all costs, for example, in jurisprudence regarding analysis of what a 'substantial part' is, whether a work is 'artistic' and whether a work is 'original'.  Additionally, a transformative use may take on a different (for example, more commercial) character over a period of time which may mean that an exception based on transformative use will probably need to address temporal issues.
The uncertainty alluded to above could have undesirable results.  Firstly, it may mean that artists will be unwilling to make use of the provision because the relevant test is so unclear and subjective that there is a material risk that it will not operate to provide them with protection, (and therefore it will not be a useful exception at all).  Secondly, the potential for the unremunerated use of existing works could damage the market incentive to provide licences for such use (meaning that where users do wish to licence works, they will have greater difficulty doing so).  Thirdly, from a musical perspective, it may impact upon the genre-balance of Australian musical output.  For instance, it has the potential to encourage 'creators' from genres who typically rely on "transformative" sampling for the creation of works (such as dance and hip hop), while removing the incentive from creators from genres whose music is typically used by others in sampling (such as rock, jazz and soul).
Further, any blanket exception for use for transformative works does not sit easily with the existing Copyright Act provisions regarding moral rights, for example, including the rights of integrity and attribution of authorship.  The MCA takes the position that it is undesirable to create a situation where, due to the operation of a copyright exception, artists have to rely solely on moral rights to seek to control, or gain reward for, subsequent uses of their work.  Moral rights only accrue to the benefit of the individual author, and therefore they are less able to be monetised than copyrights.  For that reason, as well as the limited remedies that are available, they are far less efficient than copyright in ensuring that artists can control and be remunerated in respect of a work's use.  The MCA believes it is more commercially efficient for a market when a right can be licensed compared to a situation whereby artists would seek to gain remuneration for transformative uses based on a threat of suit for damages or an injunction for a derogatory treatment of their work.  There is far greater certainty where a party is licensed to do a thing compared to where a party must attempt to determine whether such use would be 'derogatory'.  In the end, the requirement for speculative legal advice or acting 'at risk' would be far more likely to stifle creativity than to foster it.
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?
As per the answer to Question 15, the MCA does not believe that such an exception ought to be drafted.
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?
As per the answer to Question 15, the MCA takes the position that a general exception for transformative use should not be introduced.  However, if it were, it would be extremely important that it was drafted sufficiently narrowly so as to only apply to transformative uses that occur on a non‑commercial basis, do not infringe the moral rights of the authors and do not unreasonably prejudice the legitimate interests of the copyright owners.  
Even so, the problem with the categories set out in Question 17 (a) or (b) (particularly (b)) is the uncertainty that they could engender.  In order to be useful, the law has to provide guidance as to whether future behaviour is acceptable or not acceptable.  Trying to predict ahead of time whether behaviour is something that will not 'conflict with the normal exploitation of copyright material' or 'does not unreasonably prejudice legitimate rights of the owner' is difficult to predict, particularly where one person is doing something that might not prejudice the copyright owner unreasonably, but that together with others' actions might have a collective effect which does prejudice the copyright owner.
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? 
As discussed in the answer to Question 15, there is a danger that an exception for transformative use will lead to a use of moral rights, rather than copyright, as a means of controlling, curtailing or seeking reward for subsequent use of works.  While this is undesirable for the reasons given previously, the MCA believes it would be even more undesirable to amend those moral rights provisions consequent upon the introduction of a transformative use exception.  Moral rights, while less clear-cut in application, less litigated and less able to be monetised than copyright, are important and valuable rights for an author and therefore should not be diluted.  The MCA considers that the potential requirement for a consequential amendment of moral rights highlights the degree to which the existing rights of authors and copyright owners would have to be qualified for there to be an introduction of a general exception for transformative use. 
Libraries, archives and digitisation
Question 19. What kinds of practices occurring in the digital environment are being impeded by the current libraries and archives exceptions?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
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?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
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?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
Question 22. What copyright issues may arise from the digitisation of Indigenous works by libraries and archives?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
Orphan works
Question 23. How does the legal treatment of orphan works affect the use, access to and dissemination of copyright works in Australia?
The MCA recognises the inefficiencies and restriction of cultural expression and development that can occur as a result of the problem of orphan works, particularly given the importance of existing musical works and sound recordings as 'raw material' for new works, as discussed above in response to Question 14.  The introduction of a scheme for the efficient licensing of orphan works (as discussed below in response to Question 24) is one mechanism by which this problem can be ameliorated.
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?
The MCA believes that a collective licensing scheme would be a useful means of allowing authors to gain access to copyright works which would otherwise be unable to be utilised due to the inability to locate the relevant rights holders.  
The scheme ought to have a simple central mechanism to licence such rights, such as a website.  It could operate to provide nominal rates for access to orphan works.  The rates could be calculated on the basis of intended use, any anticipated market (commercial or non-commercial) and so on.  The MCA believes it is still important for the scheme to operate on a user-pays basis, even if that payment is of a nominal amount.  This is for two reasons.  Firstly, it may be that the copyright owner is able to be found in the future, and it is preferable to have the money up front rather than create uncertainty where the copyright owner might have to seek payment in the future, once the work has already been used.  Once the licence was granted and money paid into trust, the copyright owner could claim against the party running the scheme for the money.  Any money unclaimed after a certain period of time could be reinvested in a suitable vehicle.  Secondly, the MCA believes it is important to remind users that copyrights are valuable, and thus ought to be remunerated as a first principle, rather than reinforce the general misconception that copyright is violable (which has arisen in part due to technological developments and difficulties of enforcement). 
Such ability to seek a collective licence should only be allowed following a reasonable search for the rights owner.  Such scheme should not be allowed to become a de facto means of gaining access to rights for the use of works.  In particular, the scheme should not be allowed to operate in relation to works which are otherwise dealt with by collecting agencies or the rights holders themselves (as the first port of call ought to be those parties). 
Data and text mining
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?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
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?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
Question 27. Are there any alternative solutions that could support the growth of text and data mining technologies and access to them?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
Educational institutions
Question 28. Is the statutory licensing scheme concerning the copying and communication of broadcasts by educational and other institutions in pt VA of the Copyright Act 1968 (Cth) adequate and appropriate in the digital environment? If not, how should it be changed? For example, should the use of copyright material by educational institutions be more freely permitted in the digital environment?
The MCA is not aware of any evidence of there being an issue with the nature or scope of current statutory licensing scheme available to educational and other institutions under Part VA of the Copyright Act.  However, the MCA submits that there appears to be a degree of uncertainty in certain educational institutions (including both staff and students) regarding the operation of Part VA of the Copyright Act and its interaction with other exceptions in the Copyright Act (including the fair dealing exceptions).  As such, the MCA believes there is a need to do more to educate staff, students and the public about, and to provide clarity on, that statutory licensing scheme.  In particular, given the increasingly commercial activities undertaken by educational institutions (including the presentation of paid public seminars and involvement in commercial research), there needs to be clarity around what activities fall within the existing licensing scheme and its interaction with other applicable exceptions.  
Question 29. Is the statutory licensing scheme concerning the reproduction and communication of works and periodical articles by educational and other institutions in pt VB of the Copyright Act 1968 (Cth) adequate and appropriate in the digital environment? If not, how should it be changed?
 The MCA is not aware of any evidence of there being an issue with the nature or scope of current statutory licensing scheme available to educational and other institutions under Part VB of the Copyright Act.  However, the MCA submits that there appears to be a degree of uncertainty in certain educational institutions (including both staff and students) regarding the operation of Part VB of the Copyright Act and its interaction with other exceptions in the Copyright Act.  As such, the MCA believes there is a need to do more to educate staff, students and the public about, and to provide clarity on, that statutory licensing scheme.  In particular, given the increasingly commercial activities undertaken by educational institutions (including the presentation of paid public seminars and involvement in commercial research), there needs to be clarity around what activities fall within the existing licensing scheme and its interaction with other applicable exceptions.  
Question 30. Should any uses of copyright material now covered by the statutory licensing schemes in pts VA and VB of the Copyright Act 1968 (Cth) be instead covered by a free-use exception? For example, should a wider range of uses of internet material by educational institutions be covered by a free-use exception?
Alternatively, should these schemes be extended, so that educational institutions pay licence fees for a wider range of uses of copyright material?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
Question 31. Should the exceptions in the Copyright Act 1968 (Cth) concerning use of copyright material by educational institutions, including the statutory licensing schemes in pts VA and VB and the free-use exception in s 200AB, be otherwise amended in response to the digital environment, and if so, how?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
Crown use of copyright material
Question 32. Is the statutory licensing scheme concerning the use of copyright material for the Crown in div 2 of pt VII of the Copyright Act 1968 (Cth) adequate and appropriate in the digital environment? If not, how should it be changed?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
Question 33. How does the Copyright Act 1968 (Cth) affect government obligations to comply with other regulatory requirements (such as disclosure laws)?
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
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? 
The MCA makes no statement on this issue at this stage but may make a submission at a later date.
Retransmission of free-to-air broadcasts
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?
The MCA considers that the current retransmission regime under Part VC of the Copyright Act should be amended so that the current exceptions under Part VC of the Copyright Act relating to the Internet are deleted/amended and replaced with a geo-blocking (or other equivalent) requirement or condition.
As referred to earlier in this submission, the MCA considers that, as a general statement of principle, online use of materials should not be remunerated any differently from other 'real world' uses.  The MCA considers that the current exception in the Copyright Act is based on a technological distinction that has become irrelevant (and is likely to become increasingly irrelevant in the future) in light of the current and future technological developments.  
Whether or not a broadcasting service uses the "Internet" in any particular case may depend on a technical analysis as to whether the service is transmitted via a contained network operated by an Internet Service Provider.  In certain cases, content delivery mechanisms that appear to utilise the internet, may in fact not do so. A more relevant consideration should be whether the operator of the relevant online service operates within a particular geographic location (ie within Australia).  In this regard, the MCA is generally in support of the approach proposed by Screenrights in its submission to the Convergence Review, including its suggestion regarding how to address the issues arising under the Australia US Free Trade Agreement. 
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?
See the response to Question 36.
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?
See the response to Question 36.
Question 38. Is this Inquiry the appropriate forum for considering these questions, which raise significant communications and competition policy issues?
Ultimately these questions and issues need to be considered having regard to any related communications and competition issues. However, the MCA believes that this inquiry is the appropriate forum to consider these issues having regard to its relevant terms of reference.  Following the recommendations of the ALRC, the Government will then be in a position to consider any related communications and competition issues that may arise.  However, the MCA believes that the copyright considerations should drive the overall direction of the retransmission regime to the extent that it relates to the use of copyright materials.
Question 39. What implications for copyright law reform arise from recommendations of the Convergence Review?
Based on the matters set out in the Convergence Review Final Report, the MCA does not think that any major issues arise that have ramifications for the approach set out above.  While the Convergence Report recommended that there be no licence required to provide any content service, the MCA considers that to the extent the Broadcasting Services Act 1992 (Cth) addresses certain issues that also relate to copyright (for example sections 212(2) and (2A) of the Broadcasting Services Act), such matters could be dealt with on an equivalent basis by way of amendments to the Copyright Act.
Statutory licences in the digital environment
Question 40. What opportunities does the digital economy present for improving the operation of statutory licensing systems and access to content?
As already discussed, the MCA considers that from a practical perspective, developments in technology have significantly increased the ability of users to access copyright material (and to reproduce and communicate such material).  The MCA believes that the key challenge and objective of the Government should be to ensure that such increased access and associated use is appropriately and equitably remunerated.  To the extent that such increased access gives rise to identified inefficiencies or inconsistencies with existing statutory licences, there may be reason to amend statutory licences, create new licences or converge existing licences.  It may also be the case that particular online uses in particular industry or commercial sectors will achieve a critical mass enabling a business case for new statutory licensing regimes.  
As a general overarching principle, the MCA will favour statutory or voluntary licensing schemes over blanket exceptions because such schemes will enable the authors and owners of copyright material to receive equitable remuneration for corresponding uses of such material.  
The MCA considers that particular uses of copyright material in the online environment are likely to give rise to the development of particular business or commercial models that would not have been possible without the use of such technology.  Those new business models may indicate new areas which could come under new or existing statutory licensing schemes. 
As referred to in Question 2, the MCA also believes that the development of new systems and platforms for tracking, sampling and administering rights may facilitate the creation of new business models in respect of particular rights and/or uses of copyright material.  This may occur by providing a technological platform which the market naturally adopts (ie because it inherently increases revenue and removes market inefficiencies).   Such platforms may also enable existing statutory and voluntary collection societies to more efficiently administer rights, receive royalties on behalf of their members and grant licenses to users of copyright material.  
Question 41. How can the Copyright Act 1968 (Cth) be amended to make the statutory licensing schemes operate more effectively in the digital environment—to better facilitate access to copyright material and to give rights holders fair remuneration?
The MCA has no specific proposals for the amendment of existing statutory schemes at this stage but will comment on any such schemes that may be recommended by the ALRC in the future (if any).  It repeats its general comments as discussed in response to Question 40 as guiding principles for the development of such amendments.
Question 42. Should the Copyright Act 1968 (Cth) be amended to provide for any new statutory licensing schemes, and if so, how?
The MCA has no specific proposals for the creation of new statutory licence schemes at this stage, but will comment on any such schemes that may be recommended by the ALRC in the future (if any).  It repeats its general comments as discussed in response to Question 40 as guiding principles for the development of such new schemes.
Question 43. Should any of the statutory licensing schemes be simplified or consolidated, perhaps in light of media convergence, and if so, how? Are any of the statutory licensing schemes no longer necessary because, for example, new technology enables rights holders to contract directly with users?
The MCA believes that the digital environment has not changed the need for existing statutory licences.  The MCA is not aware of any technology that would currently enable rights holders to contract directly with users in a manner that would result in the redundancy of the current statutory licensing schemes.
Notwithstanding the above, where consolidation of existing schemes could bring about greater efficiency and compliance, such changes could benefit both of copyright creators and copyright users.  By way of analogy, in recent years there has been a degree of natural consolidation in the case of the collection societies administering voluntary licensing schemes.  The MCA would theoretically support other proposals where such consolidation would result in demonstrable and material benefits to authors and other owners of copyright material, copyright users and the music community in general.  
Question 44. Should any uses of copyright material now covered by a statutory licence instead be covered by a free-use exception?
Consistent with what has been discussed previously in this submission, the MCA does not believe that there is any imperative to increase the number of free-use exceptions in the Copyright Act and would not support any proposal that did so. As a general overarching principle, the MCA will always favour a statutory or voluntary licensing scheme over a free-use exception. This is primarily because a statutory or voluntary licensing scheme will enable the authors and owners of copyright material to receive equitable remuneration for uses of such material.  
Fair dealing exceptions
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?
The MCA does not believe that any substantive change needs to be made to the fair dealing exceptions in the digital environment.
To the extent that there are any problems with the existing fair dealing exceptions, the MCA considers that many of these can be overcome by the Government addressing issues relating to clarity and education.  This could include the provision of educational sessions for both staff and students at universities and schools and staff and members/users of libraries as well as clarification by the publication of additional explanatory materials and guidelines which address issues from a practical, rather than legal, perspective. 
To take education as an example, in the MCA's experience, many students and academics appear to be uncertain about the application of the fair dealing exceptions and their operation and interaction with the applicable statutory licensing regimes.  The MCA believes that the Government could take a more active role in facilitating awareness of the operation of the fair dealing exceptions and, in the case of the education sector, their interaction with the statutory licensing regimes.   Education about, and clarity in, the law will reduce risk and drive investment in copyright creation and use.
Question 46. How could the fair dealing exceptions be usefully simplified?
The MCA does not believe that any substantive change needs to be made to the fair dealing exceptions so that they are simplified. To the extent that there are any complexities with the existing fair dealing exceptions, the MCA considers that many of these can be overcome by the Government providing explanatory material and guidelines which address operational issues relating to the fair dealing exceptions from a practical, rather than legal, perspective. 
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?
As referred to above, the MCA considers that the overriding objective should be that use of copyright material is remunerated on an equitable basis.  Any fair dealing exception should only be considered by the ALRC to the extent that it is not feasible for such use to ever come under a mechanism (including voluntary or statutory licensing) which facilitates the provision of equitable remuneration to copyright owners. 
With respect to the example in Question 47 (i.e. quotation), the MCA acknowledges that the Copyright Act will not always be a complete answer to the multitude of uses and methods of using musical works and materials and that certain musical genres (such as jazz and hip hop) rely on the quotation of existing copyright material as part of their vernacular.  The MCA also appreciates that this issue has recently arisen in connection with the decision EMI Songs Australia Pty Limited v Larrikin Music Publishing Pty Limited [2011] FCAFC 47 (31 March 2011).  Nevertheless, as the decision in EMI Songs illustrates, the circumstances surrounding such quotation may not always be clear and may change over time.  For example, a quotation in the course of an improvisation in non-commercial circumstances could potentially take on a more commercial character if that quotation is increasingly incorporated into to musical work over time.  In other words, any exception may need to incorporate temporal test which would provide for further uncertainty.
Consistent with the MCA's response in relation to transformative use, the MCA believes that there may be difficulties in expressing such an exception in a manner that would provide certainty to both copyright users and owners.   Additionally, the MCA believes that the Government should seek to limit, wherever possible, questions under the Copyright Act being resolved based on competing 'expert evidence' regarding the supposed nature or purpose of the use of another musical work which in turn requires the Court to have a level of understanding of the artistic or musical qualities of both works.  The current practice of parties to copyright disputes providing opposing expert evidence supporting their case on the nature or purpose of such use in the context of the musical work is not, in the respectful opinion of the MCA, a proper basis on which such decisions should be made.  Courts should not be required to visit this territory and there is a risk that the uncertainty regarding the application of such a new fair dealing exception would force Courts to direct their attention specifically to these areas.  There is already sufficient uncertainty in the nature of the application of the tests concerning a 'substantial part' without including a further similar flexible (and thereby inherently uncertain) concept into the fair dealing exception. The MCA considers that any exception drafted on that basis may raise more problems than it purports to solve.  
Other free-use exceptions
Question 48. What problems, if any, are there with the operation of the other exceptions in the digital environment? If so, how should they be amended?
The MCA makes no comment on this issue at this stage but may make further submissions at a later date.
Question 49. Should any specific exceptions be removed from the Copyright Act 1968 (Cth)?
The MCA is not aware of any need to remove any exceptions from the Act.
Question 50. Should any other specific exceptions be introduced to the Copyright Act 1968 (Cth)?
As a general overarching principle, the MCA will favour statutory or voluntary licensing schemes over free-use exceptions. This is primarily because a statutory or voluntary licensing scheme will enable the authors and other owners of copyright material to receive equitable remuneration for uses of such material.  
As such, unless it can be proved that statutory or voluntary licensing regimes are not able to be implemented, the MCA does not believe that there is any imperative to introduce any substantive new exceptions into the Copyright Act.  If the ALRC is of the view that a new exception ought to be introduced, the MCA believes that the ALRC should, before supporting the introduction of such exception, establish whether there is an alternative or corresponding means of providing equitable remuneration to authors and copyright owners.
Question 51. How can the free-use exceptions in the Copyright Act 1968 (Cth) be simplified and better structured?
The MCA makes no comment on this issue at this stage but may make further submissions at a later date. 
Fair use
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?
Consistent with the key principles expressed in the MCA's response to Question 2, the MCA believes that certainty and predictability in the law is extremely important both for copyright owners and those that seek to use copyright works.  Certainty allows copyright owners to monetise their assets, allows business models to develop for the distribution of those assets, and users to understand what kind of use is acceptable and not acceptable.  
The key problem with the adoption of a broad style fair use exception based on the US model is one of clarity and certainty.  While other stakeholders may argue that such a regime would be able to rely on existing US jurisprudence to provide certainty in relation to the application of such an exception, such an argument is flawed for a number of reasons.  
First, from a practical perspective, US jurisprudence on fair use will provide little certainty to musicians or other persons seeking to rely on such an exception.  As fair use is a flexible concept governed by the application of particular parameters to particular circumstances, each application of the fair use defence will depend upon the nature of the application by the Court to the particular circumstances at hand. Musicians and other users of copyright material likely to rely on such exceptions are unlikely to be familiar with such US jurisprudence.  The only persons who are likely to be with the US jurisprudence will be lawyers (and probably US lawyers at that), compounding the current issues regarding clarity and education referred to by the MCA in Question 2.  
Second, the MCA believes there is uncertainty regarding the extent to which US jurisprudence on fair use would be adopted as binding or persuasive authority by Australian courts.  While Australia could adopt a fair use regime which was consistent with the US fair use regime, other aspects of Australian and US copyright law remain fundamentally different (such as the approach of the two jurisdictions to the question of secondary liability for copyright infringement).  The interaction between causes of action on the one hand, and exceptions on the other, is finely balanced and the nuances already existing after years of US jurisprudence may not translate readily into the Australian context.  
The introduction of a broad 'fair use' style exception could completely undermine current business models by determining that a particular species of use of copyright works need not be remunerated after the fact.  It would be difficult to advise copyright owners, businesses which are involved in the dissemination of copyright works, or even users seeking to use existing works in the creation of new works in advance, whether or not such use will fall into an exception or not.  Indeed, to the extent there was uncertainty as to the scope of the exception, parties may need to increasingly resort to the Courts to provide certainty.  Given the problems associated with Courts making assessments on issues of artistic purpose and quality, the quantum of related legal costs and length of time inherent in running copyright actions in the Federal Court, the MCA does not view further Court involvement on defining the parameters of a fair use exception as at all desirable for the Australian music community.  As Court actions are likely to be financially beyond the reach of most musicians and composers, over time, their interests could be marginalised.  
Even though a broad, flexible exception may be able to be drafted or interpreted in a manner which is not entirely open ended, or which takes due consideration of the need for copyright owners to be remunerated such as occurs in regards to fair use in the Unites States, the MCA believes that such exception will inevitably provide for greater uncertainty than the current fair dealing provisions which are defined by means of specific subject matter.  To the extent to which the ALRC finds that current exceptions need to be supplemented contrary to the views expressed by the MCA, the MCA considers it would be preferable to continue the current approach of closely drawn exceptions based on specific purposes as clearly as possible.
Question 53. Should such a new exception replace all or some existing exceptions or should it be in addition to existing exceptions?
As per the answer to the previous question, the MCA believes that there should be no new flexible exception, and it ought not replace the current approach of closely drawn exceptions based on specific purposes.
Contracting out
Question 54. Should agreements which purport to exclude or limit existing or any proposed new copyright exceptions be enforceable?
The MCA makes no comment on this issue at this stage but may make further submissions at a later date.
Question 55. Should the Copyright Act 1968 (Cth) be amended to prevent contracting out of copyright exceptions, and if so, which exceptions?
The MCA makes no comment on this issue at this stage but may make further submissions at a later date.