Attorney-General Senator George Brandis has signalled a knock-back of a key recommendation for a more flexible 'fair use' copyright regime made in today's release of the final ALRC report into copyright, calling it "controversial".

The Australian Law Reform Commission's report into Copyright and the Digital Economy, tabled today, was first delivered into the hands of Brandis in November last year.

It is the result of the ALRC's 18-month inquiry into copyright and is an attempt to correct outdated legislation with respect to the online era.

It is particularly focused on online piracy and fair use, and was ordered by the previous Government following a landmark online copyright lawsuit between ISP iiNet and a number of Hollywood-backed studios. The ALRC terms of reference required it not to broach the role of ISPs in copyright infringement.

Currently, legal exceptions to copyright are dealt with via a more confined "fair dealing" approach - where exceptions are technology-specific and complex to apply.

The ALRC report made 30 recommendations for reform - including that a fair use exception to Australian copyright law be introduced and applied to new technologies and new commercial and consumer practices.

"Fair use will promote innovation and enable a market-based response to the demands of the digital age," the report recommended.

The ALRC said incidental or technical uses - such as caching and indexing - were essential to the operation of the internet and other technologies that facilitate lawful access to copyright material, especially for data and text mining.

But it found current exceptions in the Copyright Act were uncertain and did not provide adequate protection for such uses, and recommended they be repealed. The authors recommended such uses be considered under the fair use exception.

Similarly, the report argues that the fair use exception should also be applied in determining whether data and text mining constitute copyright infringement.

The report also considered exceptions for backing up copyright material, and found the use of legally-acquired copyright material for the purpose of back-up and data recovery would often be fair use, and should be considered under the fair use exception.

It said there may also be a case for repealing or amending the existing exceptions for computer programs, if fair use is enacted, but further consultation may need to be conducted.

Brandis backs content creators

Responding to the recommendations, Brandis said the government held the view that copyright should protect the rights of content creators, and not changed merely because of the emergence of new media technology or new platforms.

The principles did not change with the invention of the internet, he said.

Brandis said the rights of content owners and content creators ought not to be lessened and they should continue to benefit from their intellectual property.

However, he said the Government was yet to fully consider the report's recommendations.

Industry reacts

Consumer lobby group Choice said the findings of the report were obvious and outlined that Australian copyright law was broken.

Choice CEO Alan Kirkland said the Australian Copyright Law was legislation that was designed to be broken by consumers.

“Despite being updated in 2006, our current copyright law fails to even address basic technologies like DVDs, let alone emerging areas such as cloud computing," he said in a statement.



“If we as a nation are serious about allowing our consumers to benefit from the latest technologies, and allowing our businesses to fully engage with the global and increasingly digital economy, then we need fair use."

Digital rights advocacy group Electronic Frontiers Australia called on the Government to introduction the fair use recommendation into copyright law.

"Australia’s current Copyright Act is no longer fit for purpose in an environment of increasingly rapid innovations in technology and service delivery," the EFA said in a recent statement.

"The current law is outdated and its inherent inflexibility casts uncertainty on the legitimacy of basic internet functions like caching and searching, cloud computing, mash-ups and remixes, data mining and the personal use of content, particularly within the social media context."

EFA chair Sean Rintel said the introduction of a fair use exception was long overdue, and would enable greater innovation and creativity while removing a number of significant impediments to the development of Australia's cloud computing industry.

Update: Govt considering forcing ISPs to co-operate on online piracy

At an Australian Digital Alliance Forum event in Canberra on Friday, Brandis re-iterated his ambivalence towards the key recommendation for fair use, on which he "remains to be persuaded".

But he said he would bring an "open and inquiring mind to the debate".

He expressed concern about the "scourge of online piracy", which he called a "form of theft", and said the government was exploring legal incentives for ISP's to cooperate in enforcement with "graduated warnings".

"The government will be considering possible mechanisms to provide a legal incentive for an internet service provider to cooperate with copyright owners in preventing infringement on their systems and networks," he said

"This may include looking carefully at the merits of a scheme whereby ISPs are required to issue graduated warnings to consumers who are using websites to facilitate piracy. This is a complex reform proposal, and how it is paid for is one of the principal unresolved issues."

Another option was third party injunctions against ISPs, but he said his preference was for industry regulation. He would continue to encourage ISPs and copyright interests to take this approach.

He foreshadowed a simpler tech-neutral approach to copyright law.