How the proposed reforms could affect copyright holders 6 min read
On 21 December 2021, the Australian Government released an Exposure Draft of the Copyright Amendment (Access Reform) Bill and an accompanying Discussion Paper. This represents the final package of the government's copyright reforms in response to the 2016 Intellectual Property Arrangements inquiry by the Productivity Commission.
The Exposure Draft sets out proposed amendments to the Copyright Act 1968, which would introduce or expand specific exceptions to copyright infringement in relation to orphan works, quotation, libraries and archives, educational use and government use, to allow more use of copyright-protected materials without the copyright owner's permission (and in some cases, for free).
A consultation on the Exposure Draft closed on 25 February 2022. The consultation also invited comments on the existing exceptions to the protection of technological protection measures, found in the Copyright Regulations 2017.
Key takeaways
- The proposed reforms, if enacted in the current form, have the potential to significantly affect the rights of copyright holders.
- Of particular note is the proposed orphan works regime, which allows free use of materials if the user cannot identify or contact the rights holder after a reasonably diligent search.
- A new fair dealing exception for quotation allows potentially wide ranging use of copyright material – including quotation of the whole of a work.
- It remains to be seen whether safeguards for copyright holders will be beefed up in the final version of the legislation. Watch this space.
Who in your organisation needs to know about this?
IP legal team; licensing team; content creators.
Background
This Exposure Draft represents the last package of the government's reforms in response to the 2016 Productivity Commission enquiry, and takes into account reports and responses from a number of other inquiries over recent years.
The proposed reforms focus on expanding access to existing copyright materials. They are motivated by a desire to allow more efficient use of copyright materials in the collections of public institutions such as libraries and archives, and to facilitate greater use of copyright materials, including the possibility of transformative use of existing materials by technological sectors.
The Discussion Paper accompanying the Exposure Draft recognises that there is no clear case for a US-style 'fair use' regime that in principle allows use of copyright material for any purpose and in any context, provided that it is 'fair'. Instead, in specific contexts and for specific use cases, the amendments seek to expand the ability to use copyright materials without the permission of the copyright holder and for free, removing inefficiencies and improving consistency. However, copyright holders may doubt whether the creation and expansion of exceptions is balanced by adequate safeguards for the interests of content creators and rights holders.
Orphan works
'Orphan works' are copyright works where the owner cannot be identified or contacted. This presents an issue for prospective users, as it can be difficult, even impossible, to seek permission or negotiate a licence to use such works.
The Exposure Draft introduces a mechanism which provides prospective users of orphan works with protection from infringement proceedings for unauthorised use, so long as they have first conducted a reasonably diligent search, but the true owner remains unknown or uncontactable. The author must also be attributed if it is reasonably practicable to do so.
Whether a search is 'reasonably diligent' will depend on a number of factors, including the nature of the material being used, the purpose and character of the use, and the technologies, databases and registers available for searchers.
If the copyright owner identifies the unauthorised use and notifies the user, they will be able to seek reasonable payment for ongoing use of the copyrighted work, but not for past infringement. If the copyright owner and the user cannot agree on the terms of such 'reasonable payment' then either party will be able to apply to the Copyright Tribunal to fix reasonable terms.
Unlike the equivalent scheme in the UK, the proposed orphan works scheme does not require users to apply for or register their claims that a particular work is 'orphaned'. No fees are payable by the user, and no government body is charged with verifying that a reasonably diligent search has indeed taken place. As a result, the system relies on self-certification by users.
This high degree of flexibility will likely be of concern to copyright holders, as they bear the burden to police against improper use of the scheme. Without a US-style domestic copyright register, it may be difficult or impossible to put potential users on notice of the current owner. Whether a reasonably diligent search was conducted is not verified by any external party beforehand, and the lack of reporting or notice requirements means it may be costly, or impossible, to discover unauthorised use, especially for copyright holders without significant resources. These factors mean that the scheme is likely to encourage lax compliance – or non-compliance – with the stated requirements. Moreover, use under the scheme could significantly reduce the economic value of the copyright work, without compensation to the copyright holder.
New fair dealing exception for non-commercial quotation
The Exposure Draft sets out a new fair dealing exception for 'quotations', which will allow certain users to quote copyright material for non-commercial purposes, or for commercial purposes when the quotation is immaterial to the value of the product or service, without infringing copyright, provided the use is 'fair'.
This exception is available to defined categories of users, including libraries and archives, educational institutions, the Commonwealth or a State, or by a person for the purpose of research.
'Quotation' is not defined, but the Exposure Draft gives the examples of quotations for the purposes of explanation, illustration, authority or homage. The exception is not limited by the type of copyright material.
Unlike most other fair dealing exceptions, the Exposure Draft sets out an express list of 'fairness factors' to be considered in assessing whether use is 'fair'. These are: the purpose and character of the dealing; the nature of the copyrighted material; the effect of the dealing upon the potential market for or value of the material; and (if only part of the work is quoted) the amount and substantiality of the part of copyrighted material taken in relation to the whole material. Interestingly, the 'fairness factors' do not require consideration of the possibility of obtaining the copyright material within a reasonable time at an ordinary commercial price, as is the case for the existing research and study exception. In contrast to the relevant article under the Berne Convention, the proposed exception also does not include a requirement that the quotation be no more extensive than is necessary in the circumstances.
The proposed exception is likely to be welcomed by organisations that quote substantial parts of copyright material for purposes falling outside existing fair dealing exceptions, such as the 'research and study' exception, and which currently need to seek clearance for such use. Conversely, copyright holders may be concerned about the extension of the exception to commercial purposes when the quotation is immaterial to the value of the product or service, and limitations in the 'fairness factors'.
The Discussion Paper also requested comments on whether the new quotation exception should extend to unpublished material. This would be inconsistent with the Berne Convention, which only permits a quotation exception in relation to published material.
Other changes
The Exposure Draft also includes amendments in several other areas, including:
- expanding the exception that allows libraries and archives to supply copies of copyright material, standardising the calculation of what is a 'reasonable portion', and expanding the purpose for which copies may be requested and supplied beyond 'research or study' to 'private and domestic use';
- expanding the exception that allows libraries and archives to place copyright material online, without any limitation as to the purpose of supply or use, although the end user remains personally liable for any infringing use;
- consolidating existing exceptions that permit use of copyright materials for educational purposes, and expansions to ancillary uses; and
- simplifying the government statutory licensing scheme (the 'Crown use' provisions), extending the collective licensing arrangements for Crown use to 'communication' of copyright works, and creating a new exception for the use of copyright material submitted to Commonwealth or State governments.
Actions you can take now
- Businesses and organisations that create, invest in or use copyright materials should monitor the progress of this legislation and pay attention to any changes in the proposed amendments.
- Copyright owners should begin considering how they would protect their rights in the event that an orphan works scheme is introduced.
- Contact us today for assistance with copyright issues and staying on top of the amendments.
- You can read further details of the amendments here.