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Joint Standing Committee on Treaties
17/10/2016
Trans-Pacific Partnership Agreement

BROWNE, Ms Delia, National Copyright Director, Copyright Advisory Group, COAG Education Council

COATES, Ms Jessica, Executive Officer, Australian Digital Alliance

[09:30]

CHAIR: Welcome. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliament privilege. I invite you to make a brief opening statement before we proceed to a wider discussion.

Ms Browne : I represent the Copyright Advisory Group, CAG. CAG represents government and non-government schools on copyright issues, as well as the majority of TAFEs in Australia. We thank you for giving us the opportunity to appear today. CAG has a very strong interest in copyright law. The Australian school sector spends upwards of $700 million a year purchasing content for use in schools, as well as over $90 million a year on copyright licensing. My team spends a lot of time advising teachers on copyright and we have a very keen interest in copyright policy.

The TPP IP chapter is of great interest. I would like to address two points in the time that we have today. The first is to do with the obligation under article 18.82 of the TPP to enact copyright safe harbours that apply to all online service providers. The second is to do with the obligation under article 18.66 to employ copyright limitations and exceptions to achieve balanced copyright law. Currently, Australia does not comply with either of these obligations. We think we should be amending our copyright laws to address each of these points to comply with the TPP.

Firstly, with the safe harbours, the Copyright Act does contain a safe harbour scheme where providers of online services receive legal protection in exchange for assisting rights holders in relation to copyright infringements that may have been done by users of their services. The scheme is modelled on a very similar scheme to the US and was required by the Australia-US Free Trade Agreement. Unfortunately a drafting error was made when the Australian safe harbour legislation was enacted. So rather than the safe harbours applying to all online service providers, as required by the Australia-US Free Trade Agreement, the Australian scheme only applies to commercial ISPs, such as Telstra. This means that Australian schools, as well as universities and libraries, have been faced with an accidental exposure to legal risks when they provide internet services or access to students and staff. This means that commercial ISPs, like Telstra, receive legal protection for complying with copyright infringement takedown notices but there is no protection for schools and universities. We cannot see any policy reason why Telstra is protected but a school is not, but there was an inadvertent error made at the time.

The legal risk that schools are facing is not theoretical. In 2003, music companies commenced proceedings against universities alleging that their IT systems had been used to infringe copyright. So this needs to be fixed, not only to comply with the Australia-US Free Trade Agreement but also to put Australia in a position to implement the TPP—that is because the TPP contains a very similar safe harbour provision as to the Australia-US Free Trade Agreement US, which would include schools and universities. The government has already acknowledged this problem and has released a draft bill which is the Copyright Amendment (Disability Access and Other Measures) Bill. That bill contains a simple amendment to bring education institutions and other online services within the scope of the copyright safe harbours, as was originally intended.

Minister Fifield has announced that the government intends to introduce this bill in the parliament shortly and we strongly welcome this. This is a long overdue and crucial reform, not only to ensure that Australia complies with its obligations under the Australia-US Free Trade Agreement and TPP but also to allow Australian schools to provide internet access to students and teachers without unnecessary legal risk. We urge the committee to recommend the introduction of the bill into parliament, including the safe harbour provisions, as a priority.

The second point I would like to make is in relation to article 18.66 of the TPP, which contains a positive obligation for signatory countries to employ limitations and exceptions to achieve balance in the copyright law. This is an active obligation to ensure an adequate balance between the interests of rights holders as well as copyright users in the wider community. Committee members may be aware that the Australian Law Reform Commission and the Productivity Commission recently found that our existing fair-dealing exceptions do not achieve this balance and have recommended that Australia introduce a copyright exception called 'fair use'.

It is also interesting to note that when this committee was considering the Australia-US Free Trade Agreement, it reached exactly the same view. JSCOT found that the IP chapter of the Australia-US Free Trade Agreement would unreasonably tip the copyright balance in favour of rights' holders unless Australia replaced the fair-dealing exceptions with fair use. The Senate select committee considering the Australia-US Free Trade Agreement agreed. It said that fair use style exceptions, 'should have been considered as part of the initial Australia-US free trade implementation legislation package in order to avoid tilting the balance towards the copyright owners to an unacceptable degree'. We agree. We do not think that Australian can comply with its TPP obligations without the introduction a fair use exception.

There are many ways that we believe that Australia's existing copyright laws are unbalanced and do not work well for teachers and students, but fair use would fix this. I would be happy to provide further information on why Australian schools need fair use during the discussion with the committee. In summary, our position is that in order to comply with TPP IP chapter, we need to (1) introduce the safe harbour provisions in the Copyright Amendment (Disability and Other Measures) Bill and (2) introduce a fair use exception as recommended by JSCOT, the Australian Law Reform Commission and the Productivity Commission. Thank you.

Ms Coates : The Australian Digital Alliance want to thank the committee for the opportunity to provide comment on the TPP. We were founded in 1999 by the former Chief Justice Sir Anthony Mason. We are a non-profit coalition of public and private interests formed to promote balanced copyright law and provide a voice for the public interest in Australian copyright debate. ADA members include universities, schools, libraries, galleries, museums, Australian and international technology companies, disability groups and individuals. We have concerns about two elements of the current text of the TPP. The first is, as covered by Kimberlee Weatherall earlier, the detailed nature of the chapter.

The prescriptive and extremely detailed IP chapters are inappropriate for free trade agreements, particularly plurilateral free trade agreements like this. We feel that they have a significant chilling effect on future copyright reform. They are unnecessarily lock in copyright law to the standards of today and do not leave room for adaptation as technology and behaviours change, which is the norm in copyright not the exception. Thirty years ago, we could never have anticipated virtual reality, 3D printing or cloud storage, but that is exactly what the TPP asks us to do. It asks us to anticipate what we will need in our law in 30 years time. This prescriptive problem is particularly a problem for plurilaterals as opposed to bilaterals. You can always go back with a bilateral and try to renegotiate. We have taken 20 years to negotiate the TPP. Going back and trying to adjust it when we come up with new technologies and new innovative behaviours is going to be extremely difficult. Therefore, as a matter of principle, we are opposed to such detailed IP chapters.

More specifically, we are also very concerned about the ISDS clauses of the TPP because we they have a similar chilling effect. As we all know from the Philip Morris case, companies are not reluctant to use ISDS to challenge changes they feel will harm their IP. With the cost of litigation and defending these things so high, the mere threat of a suit under the ISDS clauses for future IP changes could prevent any debate and/or movement in those directions. Those are the two elements that we are concerned about.

Assuming the TPP does come into force, we, as with the previous speaker, have several elements that we feel Australia should take the opportunity to amend as part of the new agreement. The first and most important are the safe harbour provisions, which have been covered fairly well by Delia Browne. We agree with Delia that Australia cannot meet its TPP obligations without it first extending existing safe harbour schemes and that we will be in breach of the agreement if we do not do so before ratifying. The TPP dictates that a safe harbour scheme must apply to any provider of online services undertaking the functions. However, our safe harbour scheme only applies to commercial ISPs—a very small subset of the organisations that undertake the functions described by the safe harbour. Libraries, schools, universities and Australian start-ups like Redbubble and Umberto all provide exactly the same services—the services that are described by the provision—and yet are not covered by our current safe harbour provisions.

This puts our start-ups, in particular, at a commercial disadvantage to their international counterparts, creating a substantial disincentive for tech companies to set up hosting services and other new technology services in Australia, and raising their risk compared to international groups that are working in the same area. These start-ups are already complying with many elements of the scheme. They receive take-down notices underneath the US equivalent of the scheme, which does cover all companies based in the US; however, they do not receive any protection in Australia. Therefore, compared to their counterparts in the US, Japanese, Korea and many other countries, they are essentially performing very similar activities and providing very similar protection for copyright owners against online infringement but are not receiving the same clarity in the law about their own rights and obligations as a result of the safe harbours.

Similarly, without the safe harbours extension, Australian schools and libraries receive less protection than commercialised peers, creators do not have a cheap, easy and efficient mechanism for asking for their materials to be taken down from these parties, and Australian consumers who use popular services that are often free and online do not receive the same protection that their counterparts using the commercial hosting services receive. So, basically, without these systems, our local system is not providing equivalent protections to the international organisations or to Australian services within Australia. As the previous speaker pointed out, if we pass the Copyright Amendment (Disability Access and Other Measures) Bill as put down as an exposure draft, this would correct this error and put us in line to accept the TPP and ratify it—and we once again suggest that JSCOT takes the opportunity to do so.

There are two elements that we feel that we should change if we do accept the TPP. One is that when the TPP comes into force, Australia should also update its laws prohibiting circumvention of digital locks, which are designed to protect copyright materials to ensure that they allow circumvention for the purpose of non-infringing activities. The TPP language improves on the previous anti-circumvention provisions in the AUSFTA by making it clear that it is possible to have an exception specifically for non-infringing activities, and we strongly urge the government to take advantage of this flexibility and fix our current provisions.

In addition, as both the previous speakers have pointed out, we believe that the TPP's language on exceptions makes it clear that balanced exceptions in the realm of their use et cetera are not only permitted but actually encouraged under this agreement. We argue that this is even stronger in the TPP than under previous agreements such as the AUSFTA. The USTR quotes the TPP as providing an obligation to promote balancing copyright systems through exceptions and limitations. Australia has had multiple previous inquiries that have found that our exceptions are not currently balanced. This includes the previous JSCOT inquiry, inquiries from the Senate select committee, the ALRC and the Productivity Commission and several other independent inquiries, which have all found that our current laws would be improved by the introduction of flexible dealing in the style of the US fair-use model. So we urged JSCOT to follow the lead of its previous committee, the ALRC and the Productivity Commission to recommend the option of fair use in Australia. Finally, and this is very minor, we support the recommendations of the Harper review that Australia should establish an independent review of our processes for negotiating the IP aspects of trade agreements to increase the transparency of and stakeholder input to Australia's free trade agreements.

CHAIR: I will read from JSCOT report 61:the Australia - United States free trade agreement, page 14 recommendation 17:

The Committee recommends that the changes being made in respect of the Copyright Act 1968 replace the Australian doctrine of fair dealing for a doctrine that resembles the United States’ open-ended defence of fair-use, to counter the effects of the extension of copyright protection and to correct the legal anomaly of time-shifting and space-shifting that is currently absent.

That is the recommendation that I believe you were referring to. Has the parliament done anything with that recommendation?

Ms Coates : The parliament has certainly introduced a few additional exceptions since the TPP came into force, but none of them provide the open-ended flexibility that is specifically mentioned by JSCOT in that recommendation.

CHAIR: In your view, is there any legal impediment to the parliament looking to resemble the United States open-ended defence of fair use in this copyright?

Ms Browne : No, there is no legal impediment. It does not infringe any of our international trade treaty obligations. There is no impediment to it.

Ms Coates : And, in fact, it has been applied by at least seven or eight other countries.

CHAIR: Do you have any view as to why we have not done it? If it assists the US and their entities in more fairly using copyright, why wouldn't we take the opportunity to replicate that provision?

Ms Browne : Whenever it comes to copyright law reform, we generally find it is quite polemic from the rights holder side and the user group side. I suspect there have been concerns raised by the rights holders on whether or not Australia could introduce fair use. There are also arguments from the rights holders that they think it would not benefit them. But, as we have said before, there have been a number of reviews where all interests have put submissions in, including the most recent one by the Productivity Commission and then one by the Australian Law Reform Commission.

I think there has been some nervousness from previous governments about this being a change to our law and making sure that they do it properly, which is why, I think, there was a recent reference to the Productivity Commission by the government, in order to go through this very carefully. But the draft recommendations from the Productivity Commission support the introduction of the fair use style exception, and I would be surprised to see—when the report is finally tabled in parliament—that they have changed that view. I think now, after so many years of discussions going towards fair use, it is time to do it. There have been plenty of submissions and inquiries; they have all come up with the same result. It is just that some groups are very concerned about how it might impact on them.

CHAIR: You have danced around a bit there, Miss Browne. That is the beauty of parliamentary privilege: you do not have to dance around. There is no question the parliament can do it.

Ms Browne : Yes, there is no question.

CHAIR: There is no question at all, unless the Constitution specifically precludes it. This is about allowing people to fairly use copyright in a whole range of proceedings. Are you suggesting that the only reason we have not done it is that right holders have been prolific in their advocacy for no change?

Ms Browne : Yes.

CHAIR: Marvellous.

Ms Browne : I think the government wants to make sure, when they finally do make the decision to change the law, that they have considered all sides, all issues and all impacts.

CHAIR: It has been 10 years; I think we have had enough time. What do you think?

Ms Browne : I agree with you.

CHAIR: What would be the benefit? If the parliament were to make such a change, who benefits?

Ms Browne : Obviously, the universities and schools, the libraries and consumers would benefit. To a certain extent, I also think the creative industries would also benefit from the introduction of fair use. It is often put forward that it is actually anti creators. I think creators could actually make a lot of use of a fair-use exception in developing and including other people's material in their new products and also new innovation. I think it would benefit mainly schools, universities, libraries, consumers, new business and technology business.

Ms Coates : And individual Australians. It is illegal at the moment to forward an email in Australia. The practical implications of that is a question mark. It just expresses the fact that our current copyright laws have very significant gaps in them. These gaps cover almost everybody who deals with copyrighted material, including creators. There are large amounts—

CHAIR: Sorry, it is illegal to forward an email?

Ms Coates : Yes. In most circumstances, it will be against copyright law to forward an email in Australia.

Ms Browne : One with other people's material in it, I should say, not your own.

CHAIR: Does the government's draft bill we spoke about that is looking to deal with the issue of access for universities and schools include this issue of fair access or not?

Ms Browne : The bill does not include fair use. It does include, which is excellent, another recommendation of the Australian Law Reform Commission, which is on streamlining the educational statutory licences part VA and part VB. It also includes an exception which is going to allow online exams. The current provisions of the Copyright Act only allow us to have hard copy exams in a seated environment, whereas the amendment in the bill is actually—

CHAIR: You are kidding me!

Ms Browne : I am not kidding you.

CHAIR: That is ridiculous!

Ms Coates : This is how specific our laws are, unfortunately.

Ms Browne : So the bill does include a new exam copying provision that allows online exams. We have also made a further submission to the government asking, 'Could we also make sure that the online exam copying provision also extends to all types of copyright material and not just text, because exams are now including snippets of film and sound recordings and not just something that is an extract out of a book?' Hopefully, the government is going to fix that as well.

CHAIR: We have spoken about the winners in moving towards the US-type doctrine of fair dealing and we have concluded that it is everyone in the country. Who are the losers?

Ms Browne : Potentially, there will be some impact on the publishing industry, maybe with an impact on the current licence fees they receive under the part VB statutory licence scheme.

Ms Coates : It is the ADA's opinion that that would be the primary impact on Australia. The majority of legitimate licencing schemes and licences that already exist will remain the same, but copyright owners and rights holders will in general receive similar payments, similar incomes and all those kinds of things. The biggest impact will be increasing flexibility in how copyright material can be used and making activities that are already being undertaken legal.

Ms Browne : Just to clarify what I mean, the part VB statutory licence applies to all print and text material that is being used by an educational institution for educational purposes. This includes freely available internet material all around the world. We are the only country in the world where, if we use anything from the internet, we must pay under that statutory licence even though it has been put up for free to access. We also pay for orphaned works where obviously we cannot find who the copyright owner of that material is.

CHAIR: Who do you pay?

Ms Browne : This is not a criticism of the collecting societies, but the internet has changed everything, obviously. Schools and teachers use all sorts of different material around the world. You might have something that is on Google Images and you might not know who owns that or how to find the owner of that, so the collecting society will try very hard for about four years and then, after that time, that money will be put back into a pool. Some of that money will go to the cultural pool and the rest of that money will go to those copyright owners who were identified in that year for distribution.

Ms TEMPLEMAN: This is also about the losers. There is PwC research that came out earlier this year warning that a move to a fair-use exemption similar to that in the US would send annual litigation costs in Australia from $26.6 million to $133 million and send Australian publishers out of business. They liken it to what happened in Canada. Have you seen that research and can you comment on it?

Ms Browne : Yes, we have seen that research. It has been found wanting by a number of other commentators. We provided a submission to the Productivity Commission directly dealing with that research that I am happy to provide the committee with a copy of. We have also seen their claims that the Canadian publishing industry had been decimated because of fair use in education. We have evidence that counters those claims made by the publishing industry and others, and that evidence is also contained in our submission to the Productivity Commission. The point being made about escalating litigation costs—I also doubt that is going to happen.

I have been involved in copyright in Australia for over 20 years. Every time there is a new proposal—like moral rights back in the late nineties or the introduction of some flexible exceptions in 2006—there is always a cry from the rights holders that it will end in increased litigation. But it never happens. If we get implementation of the recommendation of the ALRC, which sets out a framework for how we could introduce a fair-use-style exception in Australia, what would happen in the education area—as has happened every time we have changed the law before—is that we would provide very simple guidelines to tell teachers what they can and cannot do. There are already many such guidelines, developed in Canada and the US for documentary film makers, for visual artists, for education and for publishers, that explain what you can and cannot do under 'fair use'.

There is also a claim about uncertainty relating to litigation under fair use. There have been a lot of studies done recently by, for example, Professor Pamela Samuelson and Matthew Sag in the United States, that show that fair use does not create that much uncertainty, that you can work out what would be fair and what would not be fair. We disagree with the idea that suddenly this will all be about lawyers. That is not going to be the case. In our area, in education, we take our obligations incredibly seriously. We have a smart copying website, www.smartcopying.edu.au, on which we provide very practical advice to teachers about what they can and cannot do—and I have to say that this is becoming increasingly hard under the current exceptions. At the moment I am struggling to provide a simple information sheet about what you can do with a document camera in the classroom, because different rules apply depending on whether you use text material, artistic work, sound recording or film. Different exceptions apply to each, so to give practical advice to a school or a teacher on how to use a document camera is a nightmare. If there were a fair-use-style exception, I could just say, 'This is one of the illustrative uses; let's look at whether what we are doing is fair or not'—rather than me having to look at a different rule depending on whether it is print work, artistic work, film or sound recording. It just drives you absolutely crazy. What you want is for teachers and schools to do the right thing.

I do not want to go too much into a point-by-point analysis of why the PwC research was flawed. I would rather just give you our Productivity Commission submission and give you a couple of high-level briefing points to highlight what we say in our submission.

Ms Coates : I note that the Productivity Commission themselves were quite critical of the PwC report in their draft report. You should be able to find some good material there as well.

Mr WALLACE: The ADA is concerned that chapter 18 of the TPP effectively locks in the current intellectual property regime. Is that right?

Ms Coates : Yes.

Mr WALLACE: Just how locked in would it be?

Ms Coates : As has been said by several people, the chapter is not dissimilar to the old FTA. We are not locked in, in the sense of individual provisions, a great deal more than we have been. However, the fact that it is a multilateral agreement changes it substantially—the idea of trying to adapt those. There is a provision for review of the TPP every five or six years or something—you guys probably know it better than me—but the idea that that will result in any substantive changes to something that goes for 30 or 40 pages and goes into minute detail as to exactly how the laws will apply seems very unrealistic. So we are very concerned that the TPP provisions will essentially make it impossible to move away from these provisions, many of which are already very controversial and are being criticised, and are being reviewed even by the US and Europe internationally.

CHAIR: Tremendous. Thank you for your evidence here today. If you have been asked to provide any additional information—which you have been—could you send that to the secretary within seven working days. You will be sent a copy of the transcript of your evidence and will have an opportunity to request any corrections to transcription errors. Otherwise, thank you for your time.

Ms Browne : Thank you very much.

Ms Coates : Thank you very much.