Battlelines drawn in fair use debate

Technology companies including Google and Optus would like to see fair use exemptions introduced into Australia's Copyright Act, but copyright holders have expressed concern that it will make the system much tougher for content owners.

In June, the Australian Law Reform Commission (ALRC) released a discussion paper as part of its review into Australia's Copyright Act and how it is applied in the digital world.

One of the proposals to come out of the review was for a fair use regime set up against a list of factors that should be considered in determining whether the use of copyright material is in fact fair. It would look at the character and purpose of the use, the nature of the material being used, how much of the material is being used, and the effect that use of the material would have on the market.

In the paper, the ALRC argued strongly that replacing the existing and prescriptive exemptions in the Act with this broader fair use regime would be much more flexible in adapting to advances in technology.

"In the ALRC's view, a fair use regime will: Employ technology-neutral legislative drafting; assist predictability in application; minimise unnecessary obstacles to an efficient market; and reduce transaction costs," the ALRC said.

"The ALRC considers that the enactment of fair use would foster an entrepreneurial culture which contributes to productivity. The ALRC considers that introducing fair use into Australian copyright law would contribute to such an environment, and will constitute a measure that will assist in making Australia a more attractive market for technology investment and innovation."

In response to the discussion paper, Google said that Australia's "outdated copyright laws are standing [in] the way of Australia meeting its cloud computing and digital economy goals". The technology giant has previously argued that under the current law, standard internet activities such as search, crawling, indexing, and caching do not have legal protection.

Google argued in its response (PDF) that a flexible fair use exception would provide certainty that its practices are within the scope of the Act.

"Fair use would create badly needed breathing room for creation and technical innovations, while protecting copyright owners by requiring all fair use assessments to take into account the impact of new uses on copyright owner markets and the value of copyright content," Google said.

Optus also welcomed the proposal of a broad and technology-neutral fair use exemption as outlined by the ALRC.

"This is the best way to ensure that copyright obligations can develop in step with technology," Optus said. "Optus strongly believes the use of a broad fair use exemption would address many of the concerns raised about the current copyright law."

The Communications Alliance stated that the fair use provision would be "critical to the future of Australia's digital economy", and should be based on the existing US fair use provision. This call was also backed by Google.

The Australian Copyright Council argued, however, that the ALRC's proposal was not about how fair use is handled in the US, because of the differences in the Australian and US constitutions, the lack of a doctrine of exhaustion, and the lack of a system of statutory damages in Australia.

The Motion Picture Association of America (MPAA) said that the review failed to address the "serious and growing problem of online copyright infringement in Australia". The organisation said that the introduction of fair use would "create a deleterious level of unpredictability for copyright owners, copyright users, and the public".

"We urge the ALRC to consider further whether its proposal to implant a broad version of fair use into Australian law would encourage users of copyright materials to flee from markets to courts as the practical adjudicator of whether their activities are authorised. The resulting disruption of Australian markets would, we submit, be a step in the wrong direction," the MPAA said.

The Australian Media, Entertainment, and Arts Alliance (MEAA) said that the fair use proposal is "intrinsically vague, favours those with resources to undertake prohibitively expensive litigation, and has played a central role in undermining the project of journalism in the US."

The Copyright Agency stated that providing a mechanism for copyright holders to license their content out would provide more certainty than a fair use exception.

Telstra said it supports a fair use scheme, but does not condone "free riding", and stated that the definition of what fair use entails needs to be nailed down.

The Australian Competition and Consumer Commission (ACCC) welcomed the proposal for fair use, stating that it would involve "very limited free riding", but that the fair use framework should be drafted to provide stability and certainty to the industry to give the courts guidance to ensure that the regime strikes the right balance between the incentive to create content and the efficient use of copyright material.

The ALRC is expected to report back to the government with recommendations later this year.