Digital technologies facilitate an unprecedented ease of reproduction and dissemination once works have been created or captured in digital formats.

The Australian Law Reform Commission (ALRC) is currently grappling with the new challenges faced by copyright laws in the digital world, and has recently released a discussion paper seeking comment on a range of proposed reforms.

Copying in the digital age

Established models for the production and consumption of content are undergoing a radical disruptive transformation.

For example, at the end of a musical performance, an artist can make their work available online for immediate purchase and download. Popular free-to-air broadcasts of local content or global cultural events, such as the Eurovision Song Contest, operate across multiple platforms allowing consumers to view the free-to-air broadcast and, moments later, purchase content through iTunes or e-commerce retailers.

Cloud computing is rapidly increasing in popularity. Submissions received by the ALRC highlight the issues posed by cloud computing in Australian copyright law. Consumers are ‘backing up data, and format shifting their music and film collections, to the cloud. Apple iCloud is one cloud service potentially outside existing private copying provisions in the Copyright Act.’i

In the publishing industry, traditional contract models and concepts such as ‘subsidiary rights’ are becoming outdated with the rise of electronic formats. The Australian Society of Authors has sought to address this by preparing industry recommended contract terms for use by authors when negotiating for electronic formats.

The nature of digital technology means that one of the necessary steps involved in many on-line activities is for the computer to make a temporary copy of the relevant content to digital memory. This activity infringes the reproduction right under the Australian Copyright Act 1968 and requires permission to be obtained from the copyright owner unless it falls within one of the exceptions provided by the Act.ii

Digital technologies represent new and exciting frontiers for creators and rights holders. Yet new digital platforms also facilitate piracy on an unprecedented scale, with infringing copies able to be reproduced and disseminated at a ‘viral’ rate, such as by using peer-to-peer file sharing systems. One of the issues facing copyright owners and creators is how to detect infringements and enforce rights in the face of these new technologies.

Copyright owners have formed alliances, attempting to hold internet service providers liable for infringing activities of their users, with decidedly mixed results. Internet service provider iiNET recently escaped liability in Australia for authorising infringement by customers who were illegally downloading films using peer-to-peer technology. The High Court foundiii that iiNET was not able to prevent customers from illegally downloading films using peer-to-peer technology and could only terminate its service contracts with those customers.

Australian Courts have recently considered cloud-based personal video recording services in Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2)iv. Optus operated a service called ‘TV Now’, which enabled consumers to record free-to-air broadcasts, such as AFL or NRL matches, on Optus’ servers, for later viewing, e.g. on portable electronic devices. The Federal Court, on appeal, rejected Optus’ attempt to rely on the existing ‘time-shifting’ exception, which has long permitted consumers to record programs using personal recording devices, for later viewing.

Proposed Reforms

The ALRC is reviewing the current exceptions and statutory licences in the Copyright Act to determine whether they are sufficient in the digital environment or if new exceptions are needed. The discussion paper Copyright and the Digital Economyv was released on 5 June 2013 and the final report is due by 30 November 2013.

Not-for-profit organisation, The Australian Digital Alliance, has recommended a broad ‘fair use’ exception that would extend to cloud-based services such as the Optus TV Now service in line with other jurisdictions. The rationale is to prevent innovation being stifled and a decline in investment in Australia’s digital economyvi.

The ALRC’s proposed ‘fair use’ exception will involve a consideration of whether use by third parties of copyright material is likely to be fair. The indication is that where there is a finding of a commercial use by the third party, this is not likely to favour a finding of fair usevii.

What is ‘fair use’?

When considering whether there has been a ‘fair use’, the test will be to consider the following four ‘fairness factors’, adopted from US law:

  • the purpose and character of the use – was it commercial or transformative?
  • the nature of the copyrighted work – is it creative and has it been published? • the amount and substantiality of the portion used in relation to the copyrighted work as a whole – how much has been taken?
  • effect upon the market for or value of the copyrighted workviii.

While the proposed ‘fair use’ exception is a welcome attempt aimed at reducing the risk of Australia missing out on new transformative technologies, it remains to be seen if it will be accepted in the present form and whether – in the ALRC’s words – it “asks the right questions of new business models that use copyright material.”xi