Recommendation for a fair use exception

In its final report on Copyright and the Digital Economy, a key recommendation of theAustralian Law Reform Commission (ALRC) is the introduction of a fair use exception to copyright infringement. It seeks to achieve a balance between the interest of rights holders and content users and between flexibility and certainty. The Federal Attorney-General, George Brandis, has described this as a ‘controversial’ recommendation1.

The current law - fair dealing and other exceptions

The Copyright Act 1968 currently contains a number of exceptions to copyright infringement.

The exceptions include fair dealing exceptions for the specific purposes of research or study, criticism or review, providing professional advice, parody or satire or reporting the news. To rely on these exceptions, a use must be for one of these specific purposes and must be fair.

There are also a range of specific exceptions, not subject to a fairness requirement, relating to,  for example, copying by libraries, educational use, computer programs, making of temporary copies of content in a computer memory, and format/time shifting for private use.

Why a fair use exception?

In brief, a fair use exception would mean that all unauthorised uses of copyright material (as opposed to certain prescribed uses) may be an exception to copyright infringement if the use is fair.

The factors relied upon by the ALRC to support the case for a fair use exception include that it:

  • is technology-neutral and will assist in increasing investment and innovation in Australia.
  • is a flexible standard, yet is certain and clear enough to be predictable.
  • has been codified for many years in the US and other foreign jurisdictions.
  • promotes public interest and transformative uses (ie a use different to the one for which the material was originally created). The example given is the recent US Google Books case2 which the ALRC says ‘demonstrates the potential of fair use to advance education and learning and to benefit authors and content owners’
  • better aligns with reasonable consumer expectation (although the ALRC is clear to state that it is not an argument for legalising piracy).
  • protects rights holders’ markets in that if a licence could be obtained, the use may not be fair.

Many criticisms were levelled at the proposed exception but the biggest criticism is the perceived uncertainty it will create leading to increased transaction costs. The ALRC considers the exception to be sufficiently certain and predictable while allowing flexibility to apply to all uses and new technologies. To deal with this concern, the ALRC recommends that guidance be given on how to interpret and apply the exception.

Primary recommendation –  fair use exception

The overarching feature of the recommended fair use exception is an express provision that fair use of others’ copyright material does not amount to copyright infringement. It is recommended that a list of fairness factors and illustrative uses/purposes should be taken into consideration when assessing whether a use is fair. The current exceptions to copyright infringement would be repealed if fair use is enacted.

(a) Fairness factors

The four recommended non-exhaustive fairness factors are:

  1. the purpose and character of use. This includes consideration of whether the use was transformative, for the public interest or for a commercial purpose.
  2. nature of the copyright material. This includes a consideration of whether material has been published, is in print and/or contains factual or entertainment content.
  3. amount and substantiality of the part used.
  4. effect of the use upon the potential market or value. This factor is said to help to ensure that the markets of the rights holders are not substantially damaged by the exception.

(b) List of non-exhaustive illustrative uses or purposes

The following list of recommended illustrative uses and purposes is non-exhaustive, non-determinative and does not create a presumption of fair use:

  1. research or study,
  2. criticism or review,
  3. parody or satire,
  4. reporting news;
  5. professional advice,
  6. quotation,
  7. non-commercial private use,
  8. incidental or technical use,
  9. library or archive use,
  10. education,
  11. access for people with disability.

(c) Other factors to consider when determining whether a use is ‘fair’

The ALRC suggests that in addition to the above, the following should provide guidance on interpreting and applying the exception:

  • existing Australian case law on the current fair dealing exceptions.
  • other jurisdictions and their application of the fair use exception. The ALRC suggests that the Explanatory Memorandum should contain an express statement that the Australian Courts may be guided (but not bound) by US and other foreign law on this issue.
  • development of industry codes of practice and guidelines.

Secondary (back-up) proposal – new fair dealing exceptions

If the fair use exception is not introduced, the ALRC recommends a new fair dealing exception. The eleven illustrative purposes set out above under fair use would be the new prescribed fair dealing exceptions under this back-up proposal. The same four fairness factors would apply.

The difference between this proposal and fair use is that fair dealing is a prescriptive about the uses which could be considered to be an exception to copyright infringement (ie two questions arise – does the use fall within one of these prescribed purposes? If so, is the use fair?) whereas fair use is a standard (ie only a single question arises – is the use fair?). Fair use is more flexible.

The ALRC makes it clear that fair dealing is a secondary recommendation. The ALRC recommends that if this back-up fair dealing exception is enacted as opposed to fair use, the scope of the purposes should not be given a narrow construction and should be interpreted liberally.

Conclusion

Mr Brandis has publicly indicated that he is not convinced a fair use model is the best direction for Australia. The inquiry is not the first time that Australia has considered the introduction of a fair use model and, if the initial indication from the Attorney-General is to be believed, this may not be the last time.