Copyright and the Digital Economy - Brief
Executive Summary
The Australian Law Reform Commission (ALRC) concluded that the Copyright Act 1968 (Cth) is not fit for purpose in
the digital age. It recommends replacing the outdated exceptions and statutory licences with a flexible and adaptive
copyright framework.
The main recommendations are:
 Replacing many of the current ‘purpose based’ copyright exceptions with a flexible ‘fair use’ exception
 If fair use is not implemented, the introduction of extended fair dealing exceptions
 Reform and clarification of specific copyright exceptions for government, judicial and library use
 Simplification of the statutory licences for education and government
 Limitation on remedies for use of orphan works provided a diligent search has been carried out
 Internet retransmission and broadcasting to be looked at when developing media and communications policy
 Preserving some specific exceptions from being overridden by contract, but not the fair use exception
As the ALRC states, the effect of the reforms, including the introduction of fair use, will be that:
Australian copyright law can be applied to new technologies and new commercial and consumer practices,
without constant recourse to legislative change. Fair use will promote innovation and enable a market-based
response to the demands of the digital age. The reforms will enhance access to cultural material, without
undermining incentives to create. The recommended exceptions are also intended to be more consistent
with public standards of fairness.
Background
In 2012 the ALRC was tasked with determining whether the exceptions and statutory licences in the Copyright Act
1968 (Cth) were adequate and appropriate in the digital environment. The ALRC received 870 public and 139
confidential submissions and undertook 109 consultations with a full range of stakeholders, including creators, GLAM
sector, education sector, government authorities, media, broadcasting, music organisations, online service providers,
publishers, rights management organisations, academics and consumer groups.
Submissions and consultations presented concrete examples of uses not currently supported, including cloud
computing, buffering, search engines, accessibility applications for the visually impaired, preservation and digitisation
of cultural heritage. The outdated nature of several provisions was remarked, with provisions making reference to
video tape and other outdated technologies. As the Attorney-General remarked while addressing the Australian
Digital Alliance Forum:
The Copyright Act is overly long, unnecessarily complex, often comically outdated and all too often, in its
administration, pointlessly bureaucratic.
Overwhelmingly, the submissions were supportive of copyright, recognising its essential role in incentivising the
creation and distribution of content. As the ALRC noted:
Copyright protection is vital in allowing creators and rights holders to exploit the value of their materials, and
to increase the incentive to create those materials—but this monopoly need not extend indefinitely or into
markets which the creator had no real interest in exploiting. Copyright must leave ‘breathing room’ for new
materials and productive uses that make use of other copyright material.
The Recommendations
Fair Use
Fair use is a broad, flexible exception to copyright infringement. It asks the central question ‘is this use fair’? It is
similar to the fair use exception used by the world’s largest exporter of cultural goods, the USA, and is similar to the
exceptions used in Singapore, Israel and South Korea.
The ALRC concludes that fair use is appropriate for Australia as:
 Fair use is flexible and technology-neutral.
 Fair use promotes public interest and transformative uses.
 Fair use assists innovation.
 Fair use better aligns with reasonable consumer expectations.
 Fair use helps protect rights holders’ markets.
 Fair use is sufficiently certain and predictable.
 Fair use is compatible with moral rights and international law.
To determine whether a use is fair, four familiar fairness factors are considered. These are the same factors as
currently used in the fair dealing exception for study or research. The factors are:
 the purpose and character of the use;
 the nature of the copyright material;
 the amount and substantiality of the part used; and
 the effect of the use upon the potential market for, or value of, the copyright material.
As the ALRC notes:
An important feature of fair use is that it explicitly recognises the need to protect rights holders’ markets. The
fourth fairness factor in the exception is ‘the effect of the use upon the potential market for, or value of, the
copyright material’. Considering this factor will help ensure that the legitimate interests of creators and other
rights holders are not harmed by the fair use exception.
Additionally, a list of illustrative purposes is provided. Uses on this list are more likely to be fair, but the list is nonexhaustive so novel or innovative uses can still be considered against the fairness factors, in contrast to the current
fair dealing provisions. The illustrative purposes are: research or study; criticism or review; parody or satire;
reporting news; professional advice; quotation; non-commercial private use; incidental or technical use; library or
archive use; education; and access for people with disability.
The introduction of fair use would replace 30 existing technical exceptions, increasing the clarity and cohesion of the
Act, and making it easier to comprehend, especially for lay people trying to work out the limits of exceptions available
to them.
Fair use is supported by education, the internet industries, telecommunications companies, libraries, cultural
institutions, consumers, organisations assisting those with disabilities, the ACCC, IP Australia and many others. It not
supported by the majority of collecting agencies and rightsholder organisations.
Fair Dealing – the fall-back position
If fair use proves to be unpalatable at this time, the ALRC have suggested an alternative, a ‘new fair dealing’ exception
that consolidates the existing fair dealing exceptions and new illustrative purposes. The exception would work
similarly to fair use, the same four fairness factors would be considered to decide if a use infringes copyright.
However, as the ALRC notes:
a confined fair dealing exception will be less flexible and less suited to the digital age than an open-ended fair
use exception. Importantly, with a confined fair dealing exception, many uses that may well be fair will
continue to infringe copyright, because the use does not fall into one of the listed categories of use. For such
uses, the question of fairness is never asked.
In the ALRC’s view, Australia is ready for, and needs, a fair use exception now. However, if fair use is not enacted,
then the new fair dealing exception will be a considerable improvement on the current set of exceptions in the
Copyright Act.
Specific Exceptions
The ALRC recommends some specific exceptions for ‘unlicensed uses for which there is a clear public interest, and for
some uses that are highly likely to be fair use anyway, making a case-by-case assessment of fairness unnecessary’.
The exceptions recommended by the ALRC would be utilised by libraries, the government and judiciary. The
exceptions are:
 Library exceptions for preservation copying and document supply
 Government exceptions for the parliamentary library, tribunal proceedings, royal commissions, statutory
inquiries, public access and government correspondence.
Statutory Licences
The ALRC recommends retaining the statutory licences (despite calls for repeal from the educational sector and some
government bodies). The ALRC expect the introduction of fair use, and new exceptions for government use ‘should
address many of the criticisms of the statutory licences’. Educational institutions, government and organisations
assisting the blind should be able to rely on exceptions in the same way as others, uses that fall under one of the
exceptions should not be counted as remunerable uses under the licence. They note that if the new exceptions,
including fair use, are not enacted, then the case for repeal of the statutory licences is much stronger.
Additionally, they have made recommendations to streamline the licences, making them making them less rigid and
prescriptive - the terms of the licence should be agreed on by the parties, not prescribed in legislation.
These recommendations would reduce the administrative burden for organisations, level the playing-field for
educational institutions competing in the global marketplace and remove the disincentives against using digital
technologies inherent in the current licence structure.
Orphan works
For orphan works (works whose copyright holder is unknown) the ALRC recommends that if a diligent search fails to
locate a rightsholder, then remedies for use of that work will be limited. Additionally, some uses of orphan works
may fall under the fair use exception. For organisations wishing to use orphan works (such as museums or libraries
dealing with Australia’s cultural artefacts) this provisions will enable them to make these works available without
running unacceptable legal risks.
Broadcasting
The ALRC:
reviewed a range of exceptions that concern free-to-air television and radio broadcasting, including the
statutory licensing scheme for retransmission of free-to-air broadcasts and other exceptions that refer to the
concept of a ‘broadcast’ and ‘broadcasting’. In a changing media environment, distinctions currently made in
copyright law between broadcast and other platforms for communication to the public may require
justification.
The ALRC has determined that these issues would be most appropriately examined by the government in the
development of media and communications policy. When this occurs, the ALRC has suggested approaches to the
reform of broadcasting exceptions, including ‘changes to the retransmission scheme and the statutory licensing
scheme applying to broadcasting of music; and the extension of some other exceptions to the transmission of linear
television or radio programs using the internet’.
Contracting Out
The ALRC recommends that contractual terms that restrict or prevent acts allowable under the library and archive
exceptions (preservation copying and document supply) should be unenforceable. They also recommend limits to
contracting out to fair dealing exceptions, but not to fair use should it be adopted.