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ALRC report released: Copyright and the Digital Economy

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ALRC report released: Copyright and the Digital Economy

Posted 20/02/2014 by Mary Anne Neilsen

Thursday 13 February 2014 saw the release of the much anticipated Australian Law Reform

Commission final report for its inquiry, Copyright and the Digital Economy.

The report follows a complex and ambitious 18 month inquiry in which the ALRC was asked

to consider whether current copyright exceptions are adequate and appropriate in the digital

era. The inquiry attracted strong interest— receiving over 870 submissions— and considered

a broad range of topics from caching and indexing; to cloud computing; online use for

social, private or domestic purposes; transformative use such as mash-ups or sampling in

music; and retransmission of free-to-air broadcasts. The inquiry also looked at issues

affecting libraries and cultural institutions such as preservation and digitisation, and

contracting out of copyright exceptions.

When tabling the report in Parliament, the Attorney-General Senator the Honourable George

Brandis said the ALRC inquiry was the most significant review of the Copyright Act since the

Act came into operation in 1968.


The report makes 30 recommendations which the ALRC President Professor Rosalind

Croucher said

are designed to allow for a more principles-based and less prescriptive approach to

copyright law. In a highly contested field, we have suggested reforms that will protect

creators and their markets, provide appropriate access to material, simplify and modernise

the law, and create a better environment for innovation and economic development.

In summary, the recommendations include:

• the introduction of a flexible fair use exemption as a defence to copyright infringement

• retaining and reforming some existing specific exemptions (including the exemptions that

apply to parliamentary libraries), and introducing certain new specific exemptions

• clarifying the statutory licensing scheme

• changing the broadcasting exemptions, and

• amending the Copyright Act to limit contracting out of copyright exceptions.

Key recommendation: a fair use exception

Undoubtedly the key recommendation of the ALRC report is that Australia adopt a ‘fair use’

exception to copyright. Fair use is a defence to copyright infringement that essentially asks

of any particular use: Is this fair? In deciding whether a particular use of copyright material is

fair, a number of principles, or ’fairness factors’ must be considered. Chapter 5 of the report

outlines in greater detail how these fairness factors would operate.

Fair use is found in a number of countries and notably has existed in the United States for

the last 35 years. In support of the doctrine, the ALRC report notes that the use of the

doctrine in the US ‘has not seemed to have greatly inhibited the creation of films, music,

books and other material in the world’s largest exporter of cultural goods, the United States’.

If introduced in Australia, fair use would build on existing Australian laws that allow fair

dealing of copyright material for purposes such as research, study and reporting the news.

The Commissioner in charge of the inquiry, Professor Jill McKeough described the

advantages of fair use saying,

Fair use is a flexible exception that can be applied to new technologies and services, which is

crucial in the digital economy.’

Fair use can facilitte the public interest in accessing material, encourage new productive

uses, and stimulate competition and innovation […]

But fair use also protects the interests of writers, musicians, film-makers, publishers and

other rights holders. It was very important that in an inquiry about exceptions to copyright,

we not lose sight of the purpose of copyright law.

Fair use is undoubtedly a controversial doctrine. As the ALRC report notes, the introduction

of fair use to Australia is supported by the internet industry, telecommunications companies,

the education sector, cultural institutions and many others. However it is largely opposed by

rights holders. Those opposing fair use argue amongst other things that there is no evidence

that it would assist innovation and that an open-ended fair use exception would result in the

balance between the interests of copyright owners and users being tipped too heavily in

favour of users. Presenting this side of the debate, commentator Paul Noonan recently

pointed to a recent round of US cases on fair use that have not worked out well for artists

and authors whose works have been appropriated and used by others without consent or


Responses to the report

The Government is still to respond to the report. In a speech to the Australian Digital

Alliance, the day after the report’s release, the Attorney-General acknowledged the need for

copyright law reform, noting also that a strong case has been made that the Copyright Act is

unnecessarily restrictive in potentially prohibiting some beneficial uses of copyright material.

Perhaps more significantly, Senator Brandis also stated that he remains to be persuaded that

fair use is the best direction for Australian law. Nevertheless he will ‘bring an open and

inquiring mind to the debate’ as the Government considers the approach it will take to the


Shadow Attorney-General Mark Dreyfus QC has welcomed the public release of this

significant report stating he looks forward to the Government response:

Having received the report in November, the Government should signal their plans as soon

as possible, to give the certainty and direction industry needs.