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Wednesday, 1 November 2006
Page: 28

Ms ROXON (10:40 AM) —The Copyright Amendment Bill 2006 contains a range of major reforms to the Copyright Act 1968 that stem from several reviews that have occurred over past years and from some major technological changes. Other parts of this bill implement obligations under the Australia-United States Free Trade Agreement which Australia is committed to implementing by 1 January 2007. We understand this is why the bill has been pushed through with such urgency, after being tabled only in the last sitting week.

These changes signify one of the biggest overhauls of copyright law that we have seen for many years. Unfortunately, much of the change has also heralded quite unworkable complexity and, in some instances, quite bizarre inconsistencies.

There are four main areas covered by the bill: changes to attempt to make the law more responsive to new technology and/or technology neutral, like format and time shifting; a regime to deal with technological protection measures or ‘locks’, if you like, that can be put on copyright material; fair dealing and fair use issues, which include new exceptions and some changed definitions and which have a particular impact on educational institutions, researchers and so on; and, a new offences regime and enforcement measures. It is hard to summarise in a few points what such a complex bill does, but those are the major changes. I am going to take some time to go through a number of issues that have arisen in those particular areas.

Of course, we acknowledge that some of these changes have been subject to extensive consultation, such as the technological protection measures. Save for a few exceptions in those areas, these will be a big advance. Others are changes that have taken schools, researchers and other stakeholders quite by surprise and could risk upsetting the careful balance that is needed between proper remuneration for creators and accessible use of material for clear social purposes. These are some of the issues that I am going to spend much of my time on.

Before I do that, however, I want to put on the record that I am concerned in an overarching way that the government has chosen an odd path for reforming our laws to deal with new technology. Instead of moving towards making the laws technology neutral, in fact a number of the provisions in this bill have gone into more detail and more specifics about what is permissible and what is not permissible in different formats of material, some with current technology in mind but much of it in restrictive terms and I think potentially restrictive for dealing with future changes to technology. Let me use a couple of examples to make this more general point.

A number of the provisions do not seem to reflect the reality of how people access and use legitimately purchased copyright materials. One startling example of this is that a sound recording copied for use on an iPod or MP3 player is limited to a person’s private and domestic use. We have been advised that it is intentional, as some of the stakeholders have queried, to limit that use to inside one’s home. I cannot see the point of a funky, portable new technology, which is being taken up in the thousands by consumers, if it cannot be used outside the home. Obviously, the regime is only trying to protect those who are downloading and using legitimately purchased songs. I will be happy if the shaking of heads in the advisers’ box is an indication that that is not what is intended by those provisions. But the fact is that stakeholders and our own office are being advised of what these new provisions will mean and the impact they might have on new technology and it is not sufficiently clear in the legislation. I think that is really important. Similarly, the limitation of one copy being made does not reflect the reality that many people transfer and save copies of material onto their PC and put them onto their MP3 players. If you delete something from your MP3 player, some systems will automatically delete it from the computer when you resync it. So obviously that is a problem that needs to be dealt with.

In contrast, of course, the bill is actually tackling the age-old problem of taping a TV show at home to play later. At last, what has been technically unlawful for all these years will be lawful under the new time-shifting provisions, which sensibly amend copyright laws to reflect the reality of private, non-commercial use of materials by many thousands of Australians. It would be a shame, though, if this opportunity to implement a whole new raft of measures, through a failure to understand new or emerging technology, again outlawed consumers’ everyday use of technology and captured those purchasing or wanting to use legitimate material. As we know, if the laws are out of touch with personal practice then they do end up being treated with contempt and they do not encourage the purchase of legitimate materials and their lawful use—something that I know both the government and the opposition are keen to make sure that these laws will do.

Many of the provisions in this bill have been released as exposure drafts. Others were first seen when the bill was introduced into parliament in its final form less than two weeks ago. In fact, even some of the provisions that were extensively consulted on have changed so significantly that it has caught some of the industry by surprise. A 200-page bill in a complex area of law where vast changes have been made from earlier consultations will inevitably lead to much disagreement. And as the bill in its final form was only seen two weeks ago, I think it is a little unrealistic of the government to expect the opposition, the parliament and the industry to be able to absorb, advise, propose changes and support a bill, all in that time frame. The expectation is unrealistic and I do not think—as we have often seen in a number of other areas in this portfolio—that is the best way to ensure that we get the best legislation when major changes are being discussed.

I do appreciate that this is an incredibly complex area of law, however, and I do appreciate that it is always a balancing act. I do appreciate that the industry often has competing and conflicting views, and I do not in any way reflect on the work that has been done by the officers of the department or the Attorney’s officers, who are trying to deal with a difficult issue. However, I am conscious that we are creating a much more complex copyright system rather than a more simple one, and I am, as I indicated at the start, worried that some of the impacts in the new technology area are going to make things more difficult for the future and will require us to be back here again balancing these issues in a very short time, when the technology develops in a way that we are seeing happen already around the rest of the world.

The Senate Standing Committee on Legal and Constitutional Affairs is going to have 10 days more than this House is going to have to be able to try and iron out some of the major problems that have been flagged. Hopefully, the government, as it has indicated it will be prepared to do, will look very seriously at any recommendations that come from that committee. We will be keenly watching what the committee reports and will save any specific amendments for the debate in the other place, rather than have them rushed through here when extensive consultation and negotiation are clearly still underway with the department and when major groups affected by the bills have hardly had time to collect their thoughts on some of these issues—let alone, in many cases, suggest amendments.

It may sound peculiar to the House for me to be referring so often to industry and user groups in a speech where, of course, it is traditional for us to set out our view, the Labor Party’s view, on this issue, but in copyright law, where the legislation is so technical, governments and oppositions would both do well to listen to the practical implications of their proposals. What are these changes going to mean for schools? Are creators going to be properly reimbursed for their works? Are these definitions going to be workable for enforcement agencies? All these questions are vitally important and cannot be answered with confidence in the current bill.

So the question, of course, is: ‘Does Labor support the bill?’ There are substantial parts of the bill that we believe are very positive and must be supported. Other parts are still subject to major ongoing consultations with stakeholders and, given that we expect significant change through that process, the Senate committee process and the negotiation with government, we will reserve our final position until the debate is on in the other place.

However, we do think that the bill as it currently stands has a number of major flaws. While some of these are technical drafting issues which no doubt can be resolved, a number do reflect important policy questions, such as the use by educational authorities of copyright material and the standard use by consumers of new technology. I will be looking at and following the negotiations and debate in the coming two weeks with a particular eye to the impact that will be had on educational institutions and to any additional costs, whether they are in terms of paying for additional copyright material or administering a more complex system.

I hope from my reading so far that the issues that affect educational institutions have been resolved, but I am yet to have a final view on that. We will be looking very closely not just at the impact on educational institutions but also at the way new technology is dealt with by the bill. I have already flagged a couple of issues, like that of using MP3 players. It is obviously positive that, in contrast to that, the bill does fix other issues—for example, the region-coding issue for DVD players, which is a positive change in the way of dealing with technology.

But I am concerned that many of the provisions are now more technologically specific rather than neutral, even though one of the aims of the bill was to try to make sure that copyright law was going to be increasingly technologically neutral. A good example is the insubstantial copying provisions, where there is one existing rule for print and a new rule that is going to apply for electronic media.

We will be looking to see whether this is increasing rather than decreasing the complexity of the copyright laws. And, as is always the case in the copyright area, we will be looking to see whether a fair balance has been struck in the way that the provisions are finally negotiated.

Particularly, we are going to consider the way the penalty regime works. We agree that there is a need to strengthen compliance with copyright laws, but we do not want to be heavy-handed with the consumer or the little individual player in this process. However, we do want to make sure that our laws are sufficiently stringent and are able to be used easily by our authorities to target importers and those with commercial-scale operations who are regularly breaching our copyright laws.

So whilst we can note Labor’s general support for the reforms, we do have a series of strong reservations, and Labor’s final position on the bill will be subject to the result of the Senate committee review and any amendments also put forward by the government.

The government has presented this bill as a package of balanced and practical reforms dealing with copyright pirates while also ensuring that ordinary consumers are not infringing the law through everyday use of copyrighted products that they have legitimately purchased. We support that aim wholeheartedly. We are unsure, however, whether the bill, with the very worthy aims which the explanatory memorandum sets out and with its 200 pages of complex provisions, is able to live up to all the claims that the government has made—particularly in terms of keeping pace with technology, keeping Australia’s unique regime and ensuring copyright is not brought into disrepute by technical and out-of-date revisions.

I turn now to some of the key features of the bill and issues that need to be flagged. I hope I will be able to cover most of them in the time that I have available. The bill introduces new offences and enforcement measures in schedules 1, 2, 4 and 5 that are aimed at tackling copyright pirates who are seeking to undermine the legitimate rights of copyright owners. It also aims to make the copyright offences consistent with the rest of the Crimes Act. The bill will create indictable summary and strict liability offences with a range of penalty options. The strict liability offences will be underpinned by an infringement notice scheme in the copyright regulations. These changes will provide law enforcement officers with a wider range of options depending on the seriousness of the relevant conduct. The bill also contains amendments to evidential presumption provisions in civil and criminal proceedings to assist copyright owners in the litigation process. This addresses something that I know copyright owners have complained about for a very long time.

The bill also contains amendments to enhance a court’s power to grant relief to copyright owners in civil actions which involve commercial-scale electronic infringement. Amendments to the customs notice of objection provisions will reduce the administrative and cost burdens on rights holders in lodging notices and providing security for notices. These provisions have been the subject of the least amount of consultations out of the whole package of changes that are set out in this bill, and the variation of penalties across the offences is substantial. Accordingly, we are in the position where user groups are fearful that the sanction regime is far too harsh. In contrast, some copyright owners fear the opposite, depending on the type of offences that the police pursue. There is a fear, I think, that they may opt for the lesser strict liability offences because they will be easier to prove.

We do need to strengthen compliance but we do not want to be heavy-handed with the consumers. We need to make sure we get the balance right in this area. There are a number of technical components that have also been raised to do with the various elements of offences that need to be proved. These need the attention of the Senate committee. We have sought some advice from the government on the range of penalties and the perception that they are much more heavy-handed than existing ones. We have been assured that they are not. At this stage that does not seem to be consistent with the other evidence that is starting to be submitted to the Senate committee. So I am sure those issues will need to be looked at in more detail in the process of the Senate committee review.

Schedule 3, on a different issue which deals with technologically neutral definitions, is one area where it looks like the objective of trying to make the Copyright Act technologically neutral is being put into effect. Unfortunately, many of the other new provisions that are in different schedules do not meet with that same standard. I also flag that in that schedule there is an issue that has been raised by ARIA—that is, that the definition of ‘record’ being changed to include electronic files will actually have a significant impact on the licensing arrangements for digital downloads and, for example, downloading ringtones. We know this is a growing industry. Again I hope that the government will be able to look at those issues to see whether that is an intended consequence of the change.

Schedule 6 deals with a range of new exceptions that are in response to the digital agenda review and the government’s Fair Use and Other Copyright Exceptions Review announced in March 2005. The fair use and exceptions changes introduced by the bill include time-shifting, format-shifting and a range of new exceptions. The new section 111 of the bill makes it legal for people to make a film or sound recording of a broadcast—for example, to tape a TV or radio program at home for their private and domestic use in order to play it at a more convenient time. The government has addressed some of the major issues of previous drafts, dealing with problems like taping for another family member to watch et cetera. However, there are still some concerns that the new definition has some odd limits. I will put these as questions rather than anything else at this stage. Is it intended that we cover only public broadcasts but not podcasts or webcasts? This is one of the queries where looking ahead at what might be a growing area is an important thing for us to do. Again I flag the question: what does domestic use mean? Does it mean that there should be some sort of geographic limit—that is, you can only watch it in your own house—or does it really mean that you can only use it for your personal use? Maybe you can take your video to the beach house with you on the weekend and watch it there. Surely these sorts of things are not supposed to be restricted. We do need some clarification on how that wording is to appear and to see whether there are better words that could be used.

The format-shifting provisions in part 2 of schedule 6 introduce a number of provisions which make it legal to reproduce material such as books, newspapers and periodicals, photographs, sound recordings and films in different formats for private use. This means, for example, that people can transfer music from CDs they already own onto their MP3 players et cetera. I note that the bill places restrictions on the type of format shifting that an individual can do and restricts the number of copies that can be made. The bill explicitly requires the destruction of temporary reproductions.

The popular attention that has been given to the one positive aspect of these provisions—allowing some recognition of MP3 players—has, I think, overlooked some of the other real questions as to whether the format-shifting provisions are in line with technology and the needs of consumers. I have already gone through the example of the problems this might cause if the one-copy rule stops people being able to store a copy on both their portable music player and their PC of material that they have legitimately purchased. Also because many of these provisions are technologically specific, which is contrary to the bill’s stated objective of being technologically neutral, there are odd inconsistencies that allow copying from one format—say, VHS to DVD—but not between formats: for example, from DVD to DVD. That does not seem to have any logic and indicates a lack of understanding of current and emerging technologies. Presumably, we do not want to be back here when the next era of DVDs, or whatever the next thing that comes out, is produced to say that it is okay to copy from DVD to the next format. What we are really trying to restrict is people just being able to use material for their own use and on single occasions, if you like.

Nevertheless, copyright owners are very nervous about the extent of increasing flexibility and giving an individual consumer too much leeway in making multiple copies and how this might be abused. I think this will be a major issue that the Senate committee members will have to get their heads around as to whether there is a better way of doing it. I do not think these questions are easy ones to answer so it is a shame that the Senate committee will not have more time to look at some of these complex issues.

The certain purposes provisions that are set out in part 3 of schedule 6 insert a new section 200AB that allows the use of copyright material without a copyright owner’s consent in certain circumstances. They are subject to an overarching test which is set out in proposed subsection (1) and for permitted particular purposes such as use by libraries and archives, by educational institutions, by those with disabilities and for the purposes of parody and satire. I do not think the four areas that have been outlined are contentious, although I know that some submissions to the Senate committee do not believe that the parody and satire exception is necessary. But the drafting that requires the interpretation of the general three-step test in proposed subsection (1), and then the interpretation of each purpose, has been very critically received in the industry and by consumers, albeit for different reasons.

The three-step test—the special case that does not conflict with normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the copyright holders—does come from international law and international agreements, but there is some concern expressed that this should be more of a drafting question for the legislature, not an interpretive question for the judiciary, and therefore does not need to be expressly set out in the bill. The approach that the government has taken is, I think, under major scrutiny. Some groups oppose this so strongly that they argue that it would be better for an overall flexible fairness test to be applied, which they believe would work in a much better way. Obviously, that would require a major rethink and a major redraft of provisions. Other issues are more specific—for example, the libraries argue that being a library should make them a special case and that each of the other steps should not have to be separately proven. The multilayered approach is confusing and it does not necessarily serve the purpose that might have been intended. Others query whether the ‘commercial purpose’ phrase would encompass their cost recovery rather than a fee that might be charged by an organisation that was operating for profit.

The Australian Digital Alliance argue that the combination of the tests in this provision will stop certain actions from operating even though they have been found elsewhere around the world to be TRIPS compliant. Examples are search engines that might be developed to improve accessibility to the web for obtaining legitimate copyright material. Obviously, it would be silly if, under the auspices of us introducing internationally consistent legislation, we were actually making our laws more stringent than ones that apply elsewhere. Practical problems have been raised with me, like the use in new section 200AB(3)(b) of the words ‘educational instruction’ rather than the broader ‘educational purposes’ test and whether this is an intentional limitation or whether it is perhaps just an oversight in the drafting.

The fair dealing provisions for research or study, which are found in part 4 of schedule 6, are new provisions which narrow the exception for research and study. Instead of the current exception that permits copying of 10 per cent of material or more depending on a range of ‘fairness’ factors, the new provision makes the 10 per cent an absolute maximum. The new subsection 40(5) will be more restrictive than the current arrangements, so issues such as whether the material is out of print, unavailable or only available overseas will have no impact in determining whether or not it is legitimate for an individual student to access or copy more than 10 per cent of material. I believe that these provisions seem unnecessary, although the government has argued that they are required by the US free trade agreement. Whether this claim can withstand scrutiny will be tested in the Senate committee.

There are a number of other provisions which I do not think I will have time to go through. There are concerns, for example, about how the copying of library and archived material will work for interlibrary loans. I think the libraries have raised concerns about that. There are concerns that the provisions that allow for copying for preservation purposes by key cultural institutions are being limited to Commonwealth, state and territory institutions established under law. I have to say I really cannot see why the industry groups have a strong concern with that. I would need to be convinced of why that area needs to be broader, but no doubt those arguments will also be made in the Senate committee.

However, I do think that only being able to produce a single copy seems to run contrary to best practice and is outdated in the digital environment. If a copy is being made for preservation purposes, does it really matter that two copies are being made for backup? Again, does it really matter if a copy is made for preservation purposes before material is deteriorating, rather than waiting for it to deteriorate and then saying that these provisions kick in? That does not seem to be the best way of dealing with maintaining appropriate collections of national significance. Given that the provisions are restricted to institutions that are set up under Commonwealth, state and territory law, I do not think that we will be granting a massive exception to a wide range of people who could abuse the rights being given under these provisions. It also does not seem to be necessary for the commercial test to apply in this instance, because the nature of the organisations that are able to benefit from this provision is very restricted, and most of them would be operating not for profit.

There are a number of other issues. The purpose of the amendment on the making of a communication in schedule 7 is to clarify the intended scope of the communication right. As I said at the beginning, I understand that the issues of concern in terms of caching and other things seem to have largely been dealt with, although I understand that there are still some negotiations going on. Similarly, with the schedule 8 provisions, particularly the new section 28A, I understand that there are negotiations going on where both sides are endeavouring to find a better way to draft those provisions dealing with a communication in the course of educational instruction. Let me repeat for the record that our concerns in those debates will be to see whether or not schools and educational institutions are going to be disadvantaged. If there are going to be significant costs or administrative burdens put on them that are new to the existing ones, we will be very wary of supporting provisions that will do that.

Similarly, although it might seem minor, with part 3 of schedule 8—the insubstantial parts of works in electronic form—I noticed that CAG, representing the schools sector, argue that this change will effectively cost schools a lot of time and money, something in the order of $14 million. They do note that this reflects lobbying that has been going on by CAL in the last few years about the cherry picking of electronic material, but we do need to ensure that the discount that schools get for insubstantial copying does retain some meaning and that we do not penalise schools for something that individuals would be able to do. Obviously, the statutory licensing regime can cover these issues, but if what it ultimately hides is a major cost increase for the educational sector we would be very concerned about that.

I am sorry to be jumping around a bit but can I turn to part 5 and the new section 200AAA that deals with caching. As I flagged, I know that people are working on how these provisions will work. Everyone seems to support the aim, but there is a bit of concern in the drafting. There is a concern about whether passive caching is covered where a copy is saved automatically onto a computer. We have been advised that this may be covered by the temporary copying protection that is found in sections 43A and 43B, but this should be made clearer. I note also that APRA wants clarity that existing protections remain, including not being able to download from file-sharing sites and other things as part of the deal in dealing with these issues, and they seem to be legitimate issues to be taken on board.

Labor supports the provisions in schedule 9, introducing new offences to tackle unauthorised access and use of subscription and encrypted broadcasts. We understand that schedules 10 and 11, dealing with the Copyright Tribunal, are changes that are broadly supported and will enhance the jurisdiction procedures of the Copyright Tribunal.

Finally, I will spend a little time on schedule 12: technological protection measures. The bill introduces a new scheme to create a more secure environment for copyright owners to release their copyright materials. It introduces a liability scheme to target people who circumvent TPMs, in addition to those who manufacture or supply devices or services used for circumvention. As we know, these TPMs are technological locks that copyright owners use to stop their material from being copied or accessed. TPMs are also used by owners to support business models for distributing materials such as films and music online and self-protecting against increased privacy issues.

The exposure draft on technological protection measures was the subject of widespread consultation. As I said at the beginning, these are generally considered satisfactory to most stakeholders. However, the liability scheme in the bill includes specific exemptions, including creating a worthy exception for region-coding devices and allowing Australian consumers to use multizone DVD players. This is an issue that was a major annoyance to consumers, but I might flag that there are some concerns that the drafting of the combined reasons—I think the words are ‘partly for commercial purpose’—may mean that, rather than protecting copyright material, the exception still allows distributors to be able to use these locks. I have not had the time to give the matter the attention it deserves, but we will be looking at that and of course senators will take account of those issues.

I note that a number of recommendations from the LACA committee have not been picked up, although I have been assured that most of those will now be dealt with in regulations. I am also concerned that the exemptions that apply to consumers only seem to work effectively if a consumer has the technical know-how to be able to use it, as the exception does not allow someone else to do it. I think these are simple measures that do not seem to have been dealt with. I am sure that the other exceptions, such as obsolete TPMs, which I think will be picked up in the regulations should deal with those other issues. But we will need some ongoing consultation in that area. I am sorry to have taken slightly more than my allocated time, but it is a complex bill and we look forward to working with the government on resolving these outstanding issues. (Time expired)