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Copyright (World Trade Organization Amendments) Bill 1994



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House: House of Representatives

Portfolio: Attorney-General

Commencement: These amendments providing an exclusive right to enter into commercial rental arrangements commence on the day after the end of the year beginning on the day the World Trade Organisation Agreement enters into force. The amendments providing a fifty year copyright protection period for performers against existing and future unauthorised recordings and dealings in recordings of their performances commence on 1 July 1995, if the World Trade Organization Agreement enters into force in Australia by 1 July 1995. If the World Trade Organization Agreement does not enter into force for Australia by 1 July 1995, the amendments commence on a date declared by Proclamation. The other amendments, which are largely of a technical nature, will commence on Royal Assent and on the same date as proposed for the extension of the copyright protection period.

Purpose

The amendments proposed by the Bill to the Copyright Act 1968 (the Principal Act) give effect to, and enable Australia to ratify, the Final Act embodying the results of the Uruguay Round of multilateral trade negotiations. The major amendments:

* provide copyright owners, subject to certain exceptions, with an exclusive right to enter into commercial rental arrangements in respect of sound recordings and computer programs; and

* provide a fifty year protection period for performers against existing and future unauthorised recordings and dealings in recordings of their performances.

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Background

(1) GATT Uruguay Round - Background

The GATT, the General Agreement on Tariffs and Trade, is a treaty between 118 governments which seeks to provide "a secure and predictable international trading environment for the business community and a continuing process of trade liberalisation in which investment, job creation and trade can thrive." A GATT round is a cycle of multilateral trade negotiations which culminate in trade agreements among member countries to reduce tariff and non-tariff barriers to trade. The Uruguay Round is the eighth GATT round. Seven GATT Rounds have been completed since 1947.

The Gatt operates in three ways:

- as a set of rules for international trade;

- as a forum for trade negotiations to make trade more liberal and predictable;

- as a forum for GATT members to resolve their trade concerns.

On 15 December 1993, the Trade Negotiations Committee of the GATT brought an end to the Uruguay round with the adoption of a draft Final Act and Schedules. Australia signed the Final Act (encompassing the GATT, all agreements and arrangements concluded under its auspices, and the complete results of the Uruguay Round) on 15 April 1994.

(2) Agreement on TRIPs - General Outline and Copyright Provisions

An integral part of the Final Act is the Agreement On Trade-Related Aspects Of Intellectual Property Rights, Including Trade In Counterfeit Goods (TRIPs). TRIPs deals with the following subjects:

* copyright and related rights;

* trademarks;

* geographical indications;

* industrial designs;

* patents;

* layout designs of integrated circuits;

* protection of undisclosed information; and

* control of anti-competitive practices in contractual licenses.

Provision dealing specifically with copyright and related rights are contained in Part II (Articles 9-14) of TRIPs. Australia is required under Article 1 of TRIPS to give effect in its domestic law to the provisions outlined below. The provisions of the Bill will bring Australian domestic law into line with TRIPS. A copy of full text of these provisions is attached to this Digest.

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Article 9(2) extends copyright protection to:

expressions and not to ideas, procedures, methods of operation or mathematical concepts as such.

Computer programs (in source and object code) are regarded as "literary works" and are thus copyright protection [ Article 10(2)], as are compilations of data or other material (which by reason of the selection or arrangement constitute intellectual creations) [ Article 10(2)]. Copyright protection is not extended to the data or material itself [ Article 10(2)].

Article 11 accords the right to control (authorise or prohibit) the commercial rental of computer programs and cinematographic works to their authors and successors in title.

Article 12 provides that the term of copyright protection of a work, other than a photographic work or a work of applied art is to be a minimum of fifty years, calculated from the end of the calendar year of authorised publication, or, failing authorised publication within fifty years from the making of the work, fifty years from the end of the calendar year of the making.

Article 14 deals with the copyright protection of recording artists, recording companies and broadcasting companies. Copyright protection is extend in the following ways:

* In respect to sound recordings, performers must have the chance to prevent the following:

- unauthorised recordings;

- unauthorised reproductions of such recordings; and

- unauthorised broadcasting of live performances [ Article 14(1)];

* Recording companies must have the right to authorise or prohibit the direct or indirect reproduction of their recordings [ Article 14(2)];

* Broadcasting organisations must have the right to prohibit the following acts:

- unauthorised recording and reproduction of broadcasts;

- unauthorised rebroadcasting of broadcasts; and

- where parties to the Agreement do not provide the above rights to broadcasting organisations, they must provide owners of copyright in the subject matter of broadcasts with the chance to prevent the above acts [ Article 14(3)].

* The minimum term of copyright protection to be accorded to performers and recording companies is fifty years calculated from the end of the calendar year in which the recording was made or the performance or broadcast took place. The Minimum term of copyright protection to be accorded to broadcasters is twenty years calculated from the end of the calendar year in which the broadcast took place [ Article 14(5)].

(3) Agreement on TRIPS - Implications for Australia

According to the Department of Foreign Affairs and Trade (DFAT), TRIPs, by providing better defined and workable global rules for the protection of intellectual property rights

will stimulate innovative economic activity by guaranteeing a financial return to - and recognise the creative efforts of - inventors, artists, technicians and other innovators.

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In addition, DFAT argues that TRIPs will

help to protect and promote Australian exports of goods and services with an intellectual property component, including computer software, integrated circuits, chemicals, pharmaceuticals, music and film production, mining and agricultural technologies and telecommunications. It will also facilitate technology-related investment in Australia.

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(4) Arguments For and Against the Protection of Intellectual Property Rights

Proponents of the inclusion of intellectual property rights in the Final Act argue: that:

- adequate protection of intellectual property is seen by some in the developing world as a means of increasing their attractiveness to foreign direct investment from the developed world; 3 and

- abuse of copyright has denied income to the rightful owner of that copyright, and income foregone reduces the likelihood that further inventions will be made. 4

Opponents of the inclusion of intellectual property rights in the Final Act argue:

- the concept of intellectual property rights employed in the Uruguay Round was too culturally specific (i.e. it took too little account of the traditions regarding invention and the nature of knowledge existing outside the Western world); 5 and

- the extension of intellectual property rights to the developing world would do little to benefit either the intellectual property right holder or the developing country because:

- intellectual property rights holders tend to be almost exclusively from developed countries, and any extension of protection would involve a transfer of income from the developing world to the developing world; and

- as the GATT is about removing barriers to trade and the intellectual property rights issue is about erecting protective barriers within trade, the two are mutually incompatible. 6

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Main Provisions

Rental of Sound Recordings and Computer Programs - Main Amendments

Section 31 of the Copyright Act 1968 (the Principal Act) confers on the owner of an original literary, dramatic, musical or artistic work the exclusive right:

- to reproduce the work in a material form;

- to publish the work;

- to perform the work, other than an artistic work, in public;

- to broadcast the work, or, in the case of an artistic work, to include it in a television broadcast;

- to cause the work to be transmitted to subscribers, or, in the case of an artistic work, to cause a television program that includes the work to be transmitted to subscribers;

- to make an adaptation of a work, other than an artistic work; and

- to do any of the above acts in relation to a work that is an adaptation of the work.

The copyright in a work is infringed by a person who does, or authorises the doing of any act, without the licence or authority of the copyright holder (section 101).

The effect of subclause 4(a) is to confer on the owner of:

(a) a literary work (other than a computer program) or a musical or dramatic work, the exclusive right to enter into a commercial rental arrangement in respect of the work in a sound recording; and

(b) a computer program, the exclusive right to enter into a commercial rental arrangement in respect of the program.

The above proposed exclusive rights will be subject to a number of exceptions. In relation to the exclusive right to enter into a commercial rental arrangement in respect of a sound recording, the exclusive right will not apply in the following situations:

- where the copy of the sound recording was bought before the commencement of Part 2 of this Bill;

- where the commercial rental arrangement is entered into by the record owner in the ordinary course of his/her business; and

- the record owner was conducting the same business, or another business that included the making of commercial rental arrangements of the same kind when the copy was bought [ subclause 4(b)].

In relation to the exclusive right to enter into a commercial rental arrangement in respect of a computer program, the exclusive right will not apply in the following situations:

- in respect of a machine or device in which a computer program is embodied if the program cannot be copied in the ordinary use of the machine or device ("device" does not include a device ordinarily used to store computer programs);

- computer programs which are not the essential object of the rental;

- computer programs bought before the commencement of Part 2 of this Bill;

- where the commercial rental arrangement is entered into by the computer program owner in the ordinary course of his/her business; and

- the computer program owner was conducting the same business, or another business that included the making of commercial rental arrangements of the same kind when the copy was bought [ subclause 4(b)].

Section 85 of the Principal Act provides that copyright in sound recording is the exclusive right to do the following:

- make a copy of the sound recording;

- cause the recording to be heard in public; and

- broadcast the recording.

Clause 5 expands the above exclusive rights in respect to sound recordings to include the exclusive right to enter into a commercial rental arrangement. The exclusive right is subject to the following exceptions:

- where the copy of the sound recording was bought before the commencement of Part 2 of this Bill;

- where the commercial rental arrangement is entered into by the record owner in the ordinary course of his/her business; and

- the record owner was conducting the same business, or another business that included the making of commercial rental arrangements of the same kind when the copy was bought.

Definition of Commercial Rental Arrangement

New section 30A, which will be inserted in the Principal Act by clause 3, defines the expression "commercial rental arrangement" in relation to works copied in sound recordings and computer programs. Basically, a commercial rental arrangement is an arrangement under which a copy of a sound recording or computer programs is made available:

- on terms that it will or may be returned;

- in the course of the conduct of a business; and

- for payment, or as part of a service for which payment is to be made.

Lending arrangements will not be regarded as commercial rental arrangement. A lending arrangement is defined to mean an arrangement for the lending of a copy of a sound recording or computer program for which no amount, other than a refundable deposit is payable.

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Protection of Performers - Main Amendments

Part 4 ( clauses 11-17) of the Bill has two main effects.

(1) It provides a fifty year copyright protection period for performers against existing unauthorised recordings and dealings in recordings of their performances.

Clause 12 inserts a new subsection 248CA(2), providing for the extension from twenty years to fifty years in the protection period, in the Principal Act. The protection period for a performance commences on the day when the performance was given and ends fifty calendar years after the calendar year in which the performance was given.

The protection in relation to existing unauthorised recordings and dealings in recordings of a performance is provided by proposed subsection 248QA(1). Proposed subsection 248QA(1) provides that section 248QA, which contains the relevant offence provisions, applies:

- to an act [i.e. an unauthorised act] done in Australia on or after 1 July 1995, or the day the World Trade Organization Agreement enters into force for Australia, in relation to a performance given at any time before that date.

In plain English proposed subsection 248QA(1), in conjunction with the relevant offence provisions, has the effect of making illegal, from 1 July 1995, or the day the World Trade Organization Agreement enters into force for Australia, unauthorised recordings and dealings in recordings of a performance given during the previous fifty years.

The practical effect of the proposed amendments to existing unauthorised recordings and dealings in unauthorised recordings currently being sold in Australia is that from 1 July 1995 or the day the World Trade Organization Agreement enters into force for Australia, the mere possession of such recordings for sale, hire, distribution etc., will be an offence.

Proposed section 248QA establishes a number of offences in relation to existing unauthorised recordings and dealings in recordings of a performance, including:

- the making of a copy of a recording known, or ought reasonably to be known, is an unauthorised recording of a performance [proposed subsection 248QA(3)]; and

- commercial dealings (e.g. sale, hire or distribute for trade) [proposed subsection 248QA(4)].

Penalties for the above offences are set out in clause 17 and provide:

- for individuals, a maximum fine of 5 penalty units (currently $500) for each sound recording or copy to which the offence relates, or a maximum term of imprisonment of 6 months, or both; or

- for corporations, a maximum fine of 50 penalty units (currently $5000) for each sound recording or copy to which the offence relates.

(2) It provides a fifty year protection period for performers against future unauthorised recordings and dealings in recordings of their performances.

The amendments which provide a fifty year protection period for performers against future unauthorised recordings and dealings in recordings of their performances are contained in clause 12.

Specifically, clause 12 inserts new subsections 248CA(3) and 248CA(4) in the Principal Act to extend the protection period from twenty to fifty years. The protection period for future performances will commence on the day when the performance was given and ends fifty calendar years after the calendar year in which the performance was given.

What constitutes unauthorised use

Section 248G of the Principal Act sets out what constitutes an unauthorised use of a performance. A person is taken to have made an unauthorised use of a performance under paragraph 248G(2)(d) if they have in their possession a recording of the performance that they know, or ought reasonably to know, is an unauthorised recording.

Paragraph (2)(d) is omitted by clause 14 and a new (2)(d) substituted which provides that a person is taken to have made an unauthorised use of a performance if they have in their possession a recording of the performance for commercial purposes (e.g. sale, lease or distribution for the purpose of trade) that they know, or ought reasonably to know, is an unauthorised recording.

Endnotes

1. Department of Foreign Affairs and Trade, Uruguay Round Briefing - Countdown To December 15, 1993, p. 14.

2. Ibid.

3. Evans., P., and Walsh, J. 1994, The EIU guide to the new GATT, The Economist Intelligence Unit Limited, p. 37.

4. Ibid.

5. Ibid.

6. Ibid., pp. 37 and 38.

Ian Ireland (Ph. 06 2772438)

Bills Digest Service 4 October 1994

Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1994.

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1994.