Australian Gov't Commission: Copyright Is Copywrong; Hurting The Public And Needs To Be Fixed

from the wow dept

Australia’s copyright arrangements are weighed too heavily in favour of copyright owners, to the detriment of the long-term interests of both consumers and intermediate users. Unlike other IP rights, copyright makes no attempt to target those works where ‘free riding’ by users would undermine the incentives to create. Instead, copyright is overly broad; provides the same levels of protection to commercial and non-commercial works; and protects works with very low levels of creative input, works that are no longer being supplied to the market, and works where ownership can no longer be identified.

In the Commission’s view, legal uncertainty is not a compelling reason to eschew a fair use exception in Australia, nor is legal certainty desirable in and of itself. Courts interpret the application of legislative principles to new cases all the time, updating case law when the circumstances warrant doing so.



To reduce uncertainty, the Commission is recommending Australia’s fair use exception contain a non-exhaustive list of illustrative uses, which provides strong guidance to rights holders and users. Existing Australian and foreign case law, particularly from the United States where fair use has operated for some time, will provide further guidance on what constitutes fair use.

The lack of any requirement for rights holders to actively supply the Australian market reduces the efficiency of Australia’s copyright regime. Demand for works that have been created, but are not being supplied, reduces consumer welfare and the profits of intermediaries and original rights holders. Where a rights holder has made a choice not to supply their works to the market (or refuses to supply a market), granting consumers access to that work, such as through a fair use exception, improves consumer wellbeing without reducing incentives to create copyright works. By definition, if a work is not being supplied to the market, concerns about copying and ‘free riding’ are moot.

The use of geoblocking technology is pervasive, and frequently results in Australian consumers being offered a lower level of digital service (such as a more limited music or TV streaming catalogue) at a higher price than in overseas markets. Studies show Australian consumers systematically pay higher prices for professional software, music, games and e-books than consumers in comparable overseas markets. While some digital savvy consumers are able to avoid these costs (such as through the use of proxy servers and virtual private networks), many are relegated to paying inflated prices for lower standard services.



The Australian Government should make clear that it is not an infringement of Australia’s copyright system for consumers to circumvent geoblocking technology and should seek to avoid international obligations that would preclude such practices.

The evidence (and indeed logic) suggests that the duration of copyright protection is far more than is needed. Few, if any, creators are motivated by the promise of financial returns long after death, particularly when the commercial life of most works is less than 5 years.



Overly long copyright terms impose costs on the community. Empirical work focussing on Australia’s extension of copyright protection from life plus 50 years to life plus 70 years (a requirement introduced as part of the Australia–United States Free Trade Agreement) estimated that an additional 20 years protection would result in net transfers from Australian consumers to foreign rights holders of around $88 million per year. But these are likely to be a fraction of the full costs of excessive copyright protection. The retrospective application of term extension exacerbates the cost to the community, providing windfall gains to copyright holders with no corresponding benefit.

Unlike other IP rights, copyright makes no attempt to target those works where ‘free riding’ by users would undermine the incentives to create. Instead, copyright is expansive and ‘all encompassing’, providing the same levels of protection to commercial and non-commercial works, to works with essentially no degree of creativity, to works that are no longer being supplied to the market, and to works where ownership can no longer be identified. This leads to copyright covering works that require no incentive for creation, and works that have exhausted their commercial life and are no longer available. Beneficial uses of such material are unrealised. Accordingly, the current Copyright Act is weighted too heavily in favour of copyright owners, to the detriment of the long-term interests of users.

a consequence of embodying so much of our IP provisions in international agreements is that Australia is significantly constrained in reforming its IP arrangements

Changes to the law to encourage Internet service providers to cooperate with rights holders, as well as litigation, have only had a modest impact in reducing infringement. Further legislative change is unlikely to improve compliance with the law.



Instead, evidence suggests infringement declines with better content availability and most consumers prefer paid, legal consumption. As such, an effective approach to reducing infringement is the timely release of content to Australian consumers. This requires action by rights holders and their intermediaries.

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Three years ago, down in Australia, the Australian Law Reform Commission started examining various copyright reform proposals, and eventually made a rather mild suggestion: bring fair use to Australia . Frankly, we felt that the Commission could have gone much further, but it basically said to copy the American approach to fair use. Not surprisingly, Hollywood flipped out , claiming that it would "lead to an increase in piracy." And, soon after that, the new government, led by Attorney General George Brandis flat out ignored the report and pushed for expanding copyright against the public interest, and very much towards exactly what Hollywood wanted . This wasn't all that surprising, given that it was revealed that Hollywood representatives spent a lot of time with Brandis, while he deliberately avoided meeting with representatives of the public.But, in a bit of a surprise, last week, a different Australian government commission, the Productivity Commission, released one of the most amazing reports on copyright that you'll see out of a government body. The Productivity Commission is a government agency designed to giveto the government -- and had been tasked with exploring how well Australia's intellectual property laws were working.In short, the answer provided by the commission is:Just take a look at the infographic the Commission pushed out along with the report, which is titled "Copy(not)right."The whole section on the problems of copyright as currently in place in Australia is worth reading. They don't pull many punches:Like the report from three years ago, this report strongly supports fair use (citing that report in part), and their proposal in that area is really strong too. For years now, here at Techdirt, we've argued against calling fair use a "limitation and exception" to copyright, because that's misleading. Fair use is about the public's rights. And it appears that the Commission agrees, titling its section on fair use: "A new system of user rights."In that section, the Commission notes that fair use is important in making sure that copyright law only is used to "target those works where 'free riding' by users would undermine the economic incentives to create and disseminate works." This should make intuitive sense to basically everyone. Copyright is much more defensible if it's only used in cases where infringement is undermining the incentives to create. But where that's not happening, then claiming infringement seems inappropriate.The report then supports the basic four-factor test as used in the US. It also points out that the main complaint against this approach by legacy copyright industry players -- that because there's no case law, it would lead to a big litigation mess -- was unfounded and suggests a workaround to make the transition easier:Later in the more detailed part of the report, the Commission is even more direct in refuting (in great detail) each and every objection by the legacy copyright industries. In fact, they have a whole callout box that picks apart the ridiculous claims by various legacy copyright players on the "costs" of fair use:It also notes that the fair use recommendation from three years ago should be the starting point for reform, representing the "minimum level of change" and suggesting Australia go much further, specifically in exempting orphan works and "out-of-commerce" works.Yes, you read that right, the Commission is suggesting a "use it or lose it" feature for copyright:While this will undoubtedly be shocking to many in the copyright space -- the report points out that such features are common in other areas of intellectual property law.From there, the report points out how ridiculous geoblocking is, and says that getting around those blocks should not be seen as infringement:Also, not surprisingly, the report finds that copyright terms are ridiculously long and that harms the public massively:The report even suggests that a copyright term of maybe 25 years seems a lot more appropriate, based on(what a concept: not basic copyright policy entirely on faith).The report also states what many of us have argued for years, but which seems like something that rarely comes up in "respectable" conversations around copyright: if the copyright is being used outside the "incentive to create," then it makes no sense:Finally, the report notes that international trade agreements are doing a terrible job constraining Australia and blocking its ability to fix the many problems of copyright and to implement the sensible recommendations in the document. This is quite telling, since Australia was actually one of the voices in the TPP negotiations pushing for. This report is basically slapping those negotiators and pointing out that what they're doing runs directly counter to the public interest. After pointing out the state of these agreements, the report notes:The reportnotes that greater enforcement against individuals for file sharing or intermediaries for providing tools has "only had a modest impact," and that the real way to decrease piracy is not to ratchet up the law, but to make more legal content available:Honestly, this is the most thorough and amazing document on copyright I'veseen come out of a government body (we'll address its coverage of patents in another post...). It's level headed and reasonable and actually hits on most of the key "big issues." I'm guessing that it's so right on and so detailed... that it will be (1) attacked viciously by legacy players and (2) ignored by lawmakers when it comes time to actually reform the system. Oh, and while the report is technically under copyright (Australia has crown copyright, which allows government works to be under copyright), the authors wisely have slapped a CC-BY license on it, meaning that we can share it here as well.

Filed Under: alrc, australia, copyright, fair use, george brandis, productivity commission