It shows me that they have no knowledge of how the publishing industry works and have not investigated the effect their proposals will have on the publishing industry. Take this paragraph for instance:
'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.'
It is such a general statement and does not take into consideration the many long-running book and movie series that span decades and the classic works that are reprinted and filmed for generations.
Read it for yourself so you understand what they plan to do.
Copyright is an important IP right that protects the material expression of literary, dramatic, artistic and musical works, as well as books, photographs, sound recordings, films and broadcasts. Copyright grants creators the exclusive right to reproduce their work in material form, as well as to publish, perform in public, communicate to the public, and adapt their work. Exercise of these rights is commonly licenced to intermediaries, such as publishers, record companies, film studios, broadcasters, and copyright collecting agencies.
However, 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.
Copyright term is excessive and imposes costs Copyright protects literary, musical, dramatic and artistic works for the duration of the creator’s life plus 70 years. Following publication, sound recordings and films are protected for 70 years, television and sound broadcasts for 50 years, and published editions for 25 years. To provide a concrete example, a new work produced in 2016 by a 35 year old author who lives until 85 years will be subject to protection until 2136.
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.
Other costs are harder to quantify. Long periods of copyright protection, coupled with automatic application and no registration requirements, results in many works being ‘orphaned’ — protected by copyright but unusable by libraries, archives and consumers because the rights holder cannot be identified. Many other works are also unavailable to consumers once outside of their window of commercial exploitation.
A number of studies have attempted to estimate a duration of protection where the benefits to holders are matched by the costs to users. These studies find that a term of around 25 years enables rights holders to generate revenue comparable to what they would receive in perpetuity (in present value terms), without imposing onerous costs on consumers.
A new system of user rights The limited exceptions to the exclusive rights granted to creators under Australia’s copyright law do little to restore the balance.
Exceptions operate as a defence for acts that would otherwise be an infringement of a creator’s exclusive rights. At a high level, Australia allows ‘fair dealing’ in copyright material; time- and format‑shifting of copyright material; libraries, archives and other cultural institutions to preserve and disseminate works, particularly in the digital era; and the operation of some technology processes. These exceptions are too narrow and prescriptive, do not reflect the way people actually consume and use content in the digital world, and are insufficiently flexible to account for new legitimate uses of copyright material.
Consistent with the recommendation of the Australian Law Reform Commission in 2013, the Commission is recommending Australia’s current exception for fair dealing be replaced with a broader US‑style fair use exception. Such an approach would see copyright better target those works where ‘free riding’ by users would undermine the economic incentives to create and disseminate works. The fair use exception should be open ended and based on a number of fairness factors, which the courts would consider when testing whether a use of copyright material interferes with the normal exploitation of the work. These should include the:
- effect of the use on the market or value of the copyright protected work at the time of the use
- amount, substantiality or proportion of the work used, and the degree of transformation applied to the work
- existing commercial availability of the work
- purpose and character of the use, including whether the use is commercial or private.
One of the key advantages of a fair use over a fair dealing exception is that the law can adapt to new circumstances and technologies. Under a fair dealing exception, legislative change is required to expand the categories of use deemed to be fair. In contrast, under fair use, courts have the latitude to determine if, on the facts, a new use of copyright material is fair.
Not surprisingly, submissions to this inquiry from participants currently benefiting from copyright protection universally argued against the adoption of fair use in Australia. Many participants suggested that by design, fair use is imprecise on the permissible uses of copyright material, and its adoption would create significant legal uncertainty for both rights holders and users. Putting the decision about which uses are fair in the hands of the court system necessitates litigation to determine the scope of infringements. Given the time and cost such court action entails, both rights holders and users might face some, at least initial, uncertainties about the degree of protection afforded to new uses.
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.
Participants currently benefiting from copyright protection also argued fair use will significantly reduce the incentive to create and invest in new works, industry profitability and employment. The Commission considers that industry perspectives on the costs are overstated and premised on flawed assumptions. Further, most new works consumed in Australia are sourced from overseas and their creation is unlikely to be responsive to changes in Australia’s fair use exceptions. In the Commission’s view, enacting a fair use provision would deliver net benefits to Australian consumers, schools, libraries, cultural institutions and the broader community.
Making it easier for users to access legitimate content Timely and cost‑effective access to copyright‑protected works — be they movies, television programs or electronic games — is the best way for industry to reduce online copyright infringement. Therefore, in addition to implementing a new exception for fair use, the Commission is recommending further changes to Australia’s copyright arrangements to make it easier for users to access legitimate copyright‑protected content.
Geoblocking restricts a consumer’s access to digital products, enabling rights holders and intermediaries to segment the Internet into different markets and charge different prices (or offer different services) to consumers based on their location.
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.
Parallel import restrictions on books are the analogue equivalent of geoblocking. Numerous reviews, including by the Commission, and most recently by the Harper Review of Competition Policy, have recommended that prohibitions on parallel imports be repealed. The Australian Government recently supported the removal of the restrictions and has agreed to progress this reform subject to the findings of this inquiry. There is no new evidence that changes the case for removing the remaining restrictions on parallel imports of books. The Commission is recommending the repeal of the restrictions take effect no later than the end of 2017.