Copyright reform: ALRC endorses technology-neutral fair use exception

A new report from the Australian Law Reform Commission endorses a technology-neutral fair use exception for Australian copyright law.

“Fair use can be applied to a greater range of new technologies and uses than Australia’s existing exceptions,” states the ALRC's final report for its inquiry into copyright and the digital economy.

The report was released this week. “A technology-neutral open standard such as fair use has the agility to respond to future and unanticipated technologies and business and consumer practices.

“Law that incorporates principles or standards is generally more flexible than prescriptive rules, and can adapt to new technologies and services," the report read.

“A fair use exception would not need to be amended to account for the fact that consumers now use tablets and store purchased copies of copyright material in personal digital lockers in the cloud.”

A fair use exception includes five principles: acknowledging and respecting authorship and creation; maintaining incentives for creation and dissemination; promoting fair access to content; providing rules that are flexible, clear and adaptive; and providing rules consistent with international obligations.

A tech-neutral fair use exception could help make Australia a more attractive regulatory environment for startups, the report stated.

“Of course, innovation depends on much more than copyright law, but fair use would make Australia a more attractive market for technology investment and innovation,” the report read.

“Increasingly, the introduction of fair use into copyright law is being looked to as something that ‘technologically ambitious small countries’ might adopt. It has been introduced in Israel, Singapore and the Republic of Korea and it is gaining support across Europe.”

EFA chair dr Sean Rintel agreed, saying a fair use expectation will “promote a higher degree of respect for copyright among Australian consumers and will remove a number of significant impediments to the development of a vibrant and competitive Australian cloud services industry”.

“The current law is out-dated and its inherent inflexibility casts uncertainty on the legitimacy of basic Internet functions like caching and searching, cloud computing, mash-ups and remixes, data mining and the personal use of content, particularly within the social media context,” added EFA executive officer Jon Lawrence.

More than 850 submissions were made to the Inquiry, with many in support of fair use, according to the ALRC.

“In Australia, the absence of a robust principle of fair use within the existing fair dealing exceptions means that digital platforms offering search tools are not able to provide real time high quality communication, analysis and search services with protection under law,” Yahoo!7's submission stated.

Google's submission stated that “the legal reality in Australia is that a search engine cannot operate in Australia without a significant business risk created by the current legal uncertainty from a lack of safe harbors and lack of exceptions adequately covering Internet-related functions including caching and indexing”.

However, some organisations said the proposed fair use expectation would create uncertainty and risk around the rights of content creators. Screenrights wrote in its submission that it “strongly opposes” a broad fair use exception.

“Screenrights recognises the importance of technology neutrality, but a fair use regime simply defers issues of what needs to be licensed and what doesn’t to the courts. This creates an unfair situation for those in the copyright system who cannot afford to enforce their rights through litigation (usually creators).

“The uncertainty of the ALRC’s proposed broad fair use regime and its impact on a nascent commercial licensing environment will be detrimental to fair access. In our view, small creators will be prey to large scale commercial and institutional use of their work, done under the guise of fair use. These creators will have neither the wealth nor time needed to pursue their rights in court should they know their work has been used.

“Screenrights reiterates its concerns about a broad fair use regime contravening the three-step test in Berne. The ALRC dismisses the possibility of its proposals contravening this test by stating that no action has ever been taken against the US for its fair use regime. We note that the US holds significant power in the international political fora.”

The report stated that although broad standards seem less certain than detailed rules, “a clear principled standard is more certain than an unclear complex rule”.

“The standard recommended by the ALRC is not novel or untested. Fair use builds on Australia’s fair dealing exceptions, it has been applied in US courts for decades, and it is built on common law copyright principles that date back to the eighteenth century. If fair use is uncertain, this does not seem to have greatly inhibited the creation of films, music, books and other material in the world’s largest exporter of cultural goods, the United States.”

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