Copyright and the Digital Economy: ALRC Discussion Paper

‘Appropriation art’ is a controversial aspect of the American art world (see Cariou v Prince and Morris v Young and other U.S. cases discussed below), which will have relevance for Australia with the introduction of a fair use exception. It is likely that the adoption of a U.S. style fair use exception will have a significant impact on the economic interests of creators as the  fair use exception will allow uses of a work that are not within the existing ‘fair dealing’ provisions of the Copyright Act 1968. The fair use proposal will therefore have significant consequences for artists, writers and other creators of copyright work as they will not have the ability to stop the appropriation of their work – or even to choose to licence the work – as a fair use of an existing work will exist where the appropriated elements of the existing work are transformed into a new work.  The loss of control over how work is used by others will be compounded by uncertainty as to the application of the moral rights of the original author where a work is used by another creator.

The fair use proposal raises questions as to what moral rights do artists have when their work is appropriated and transformed into a new work: should the creator of the original work be attributed by the artist making a fair use of their work? And can the creator of the original work object to the derogatory treatment of their work?

The Discussion Paper presents the arguments for ‘users rights’ in respect to copyright material as the digital environment opens up opportunities for digital citizens to engage as active consumers of copyright material, which can include creativity that challenges the boundaries of copyright, such as appropriating existing works to create new cultural material. One consequence of the focus on ‘users rights’ in the digital environment is that it dramatically diminishes creativity as a full-time career towards what Andrew Keen describes as the ‘cult of the amateur’.[3] Arts Law’s submission to the ALRC on the Issues Paper, which was made in December 2012,[4]  referred to the surveys conducted with Australian artists that described how difficult it is for artists to make sufficient income from their creativity.

The fairness factors that are to be considered in determining whether there is a fair use are factors in which there can be a difference of opinion.  As a consequence it is likely that courts will have to determine the difference between an infringing derivative work and a ‘fair use’ on a case-by-case basis.  As the majority of artists are not in a financial position to spend money on litigation, the proposed adoption of the fair use exception will result in uncertainty as to what is a fair use of an existing work.

 

ALRC proposal for a fair use exception to copyright infringement

Proposal 4–1 The Copyright Act 1968 (Cth) should provide a broad, flexible exception for fair use.

 

Proposal 4–2 The new fair use exception should contain:

(a) an express statement that a fair use of copyright material does not infringe copyright;

(b) a non-exhaustive list of the factors to be considered in determining whether the use is a fair use (‘the fairness factors’); and

(c) a non-exhaustive list of illustrative uses or purposes that may qualify as fair uses (‘the illustrative purposes’).

 

Proposal 4–3 The non-exhaustive list of fairness factors should be:

(a) the purpose and character of the use;

(b) the nature of the copyright material used;

(c) in a case where part only of the copyright material is used—the amount and substantiality of the part used, considered in relation to the whole of the copyright material; and

(d) the effect of the use upon the potential market for, or value of, the copyright material.

 

Proposal 4–4 The non-exhaustive list of illustrative purposes should include the following:

(a) research or study;

(b) criticism or review;

(c) parody or satire;

(d) reporting news;

(e) non-consumptive;

(f) private and domestic;

(g) quotation;

(h) education; and

(i) public administration.

 

These proposals do not have the support of Arts Law; our submission to the ALRC on the Issues Paper argued against the adoption of a fair use exception.

The recently released Discussion Paper does support some of the Arts Law submissions including the framing principles for copyright reform in relation to Indigenous culture and cultural practices;[5] and that ss 65–68 of the Copyright Act, which provide exceptions for the use of public art and artistic works should be repealed ‘at the least insofar as they permit commercial uses of any reproductions made under them’.[6]

Arts Law, along with other organisations and individuals, proposed that the Copyright Act provide for procedures to allow the use of ‘orphan’ works after a reasonably diligent search for the rights holder had been carried out. The ALRC has proposed changes to manage ‘orphan’ works, although Arts Law will, in the response to the Discussion Paper, argue that the application of a open-ended ‘fair use’ exception to copyright infringement is not the appropriate solution to managing the problem of ‘orphan’ works and the other problems created for copyright in the digital environment.

Changes to statutory licensing schemes for educational institutions

The ALRC also proposes the repeal of statutory licensing schemes for the use of copyright material by governments, educational institutions, and institutions assisting persons with a print disability.[7]  Among the submissions to the ALRC calling for changes to the statutory licensing schemes is one that described education as ‘one of the clearest examples of a strong public interest in limiting copyright protection’.[8] The strong public interest in supporting creators of works is overlooked in this focus on opening access to copyright material for the sectional interests of the providers of education.  The ARLC Discussion Paper puts forward an efficiency justification for abolishing statutory licensing. The efficiency being the lowering of transaction costs of accessing material for educational use flowing from the negotiation of education use licences where the intended use is not otherwise a fair use of the work.[9]  However the submissions supporting the repeal of statutory licensing schemes do not provide any analysis or evidence of higher transaction costs created by the existing statutory licensing schemes or any analysis of improvements of efficiency that would flow from educational institutions negotiating with rights holders to licence material for educational use.

Reproduction by libraries and archives

The provisions that currently apply to reproduction by libraries and archives,[10] are also to be replaced by the proposed fair use exception and a new exception that allows those institutions to make copies of copyright material, whether published or unpublished, for the purpose of preservation of that material;[11] with the new preservation copying exception operating within commercial licensing arrangements that may be in place for the material.[12] Arts Law supports changes to the Copyright Act that facilitate the operation of libraries and archives in the digital environment, however Arts Law does not view the application of an open-ended ‘fair use’ exception as being the solution to the specific needs of libraries and archives in relation to the digitisation of their collections.

The optimal balance between creators and users of copyright material

Arts Law accepts that the Copyright Act should, as set out in the terms of reference of the ALRC inquiry, enhance the objective of providing an incentive to create and disseminate original copyright materials while meeting the interests of all Australians to access, use and interact with that material. Achieving the optimal balance between creators and users of copyright material has been the intended purpose of copyright law since the first copyright legislation – the Statute of Anne (1709). Digital technologies have an important role in the Australian economy and Internet technologies connect Australia to the global market place of ideas, culture and business opportunities. The Arts Law submission to the ALRC Issues Paper argued for the importance of authors and other creators of copyright material and that proposals for new exceptions to copyright, that diminish the economic and moral rights of author and creators, should be based on clearly identified policy grounds.[13]

The concern of Arts Law to the adoption of an fair use exception flows from the absence of independent research as to the economic benefits of the application of open-ended fairness factors and the failure of submissions to the ALRC to address how the adoption of a U.S. style fair use exception meets the requirement of Article (2) of the Berne Convention that provides:

‘It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.’

The argument has been made in submissions to the ALRC that Article (2) does not preclude the adoption of an open-ended fair use exception (as applied in the US Copyright Act) however Arts Law does not consider that a persuasive argument has been presented as to a fair use exception does not ‘unreasonably prejudice the legitimate interests of the author’; which interests include both economic interests and the separate non-economic interests that are the moral rights of authors provided in Article 6bis of the Berne Convention which protects attribution and integrity of works.

The ALRC describe an open-ended exception for fair use as being flexible in application and technology neutral, in that the broad statements of factors that indicative of the fairness of the use will be adaptable to new technologies. In the Discussion Paper the ALRC expand the role of the fair use exception to cover the operation of internet technologies, such as search engines, with the fair use exception being applied to assist in the management of educational uses of copyright material and the operation of libraries and archives.

The flexibility provided by a fair use exception operates through the application of fairness factors that are intended to determine whether the use of a work, such as photograph, is a fair use or an infringing use. While some commentators describe the application of the fairness factors as coherent and predictable, other commentators describe the fair use test as only predictable at the extreme edges of the continuum of works from those that are clearly a fair use through to the uses that are clearly infringing. It is the uses in the middle of the continuum of works that tend to be controversial as the correct application of the fairness factors can be a matter of opinion. Some insight into the possibility of differences of opinion as to what is a fair use can been seen in the controversy over the Cariou v Prince and Morris v Young case and others discussed below.

As discussed earlier, this flexibility also creates uncertainty as to how the moral rights of photographers and other creators will be considered in the application of a fair use test (e.g. is the appropriation of a photographer’s work an infringement of the moral right against derogatory treatment of the photograph so that the person who makes a ‘fair use’ of an existing photograph must provide a credit to the photographer so as to meet the moral right of attribution of authorship).

The uncertainty will need to be resolved by court on a case-by-case analysis of the application of the ‘fairness factors’ in the fair use tests and as to the interaction of the fair use exception to copyright infringement and the moral rights of photographers and other creators.

Appropriation art and U.S. photographers

Cariou v Prince involves the U.S. courts reviewing whether there was an infringement of copyright when Richard Prince  ‘appropriated’ photographs of Patrick Cariou from his ‘Yes Rasta’, book on Rastafarian culture (PowerHouse Books, 2000) to create artistic works. The outcome was that some of Prince’s art works were a fair use of Cariou’s photographs (as the works were ‘transformed”); however a court still needs to assess and determine whether other of Prince’s art works were a fair use of Cariou’s photographs or an infringement of copyright.[14]

Morris v Young involves a U.S. court reviewing whether there is an infringement of copyright in the photographs of Dennis Morris (who photographed the punk rock band the ‘Sex Pistols’), where Russell Young (an artist) used photographs found on the Internet to create pieces of art titled "Sex Pistols in Red" and "White Riot + Sex Pistols." The outcome was that one art work was a fair use of the photograph (as the work was ‘transformed”); however the other art work was an infringement of copyright.[15]

Examples of the appropriation art can be seen at the webpages that discussed these cases.

The appropriation of photographs of an Australian photographer

An Australian photographer was asked by a client to photograph an artist’s model in poses with the client’s classic car. The photographer informed the client in an email and verbally that the images were for personal use only and not to be used for commercial gain. The client was sent low-resolution proof images that included the photographer’s logo as a water mark. Subsequently the client put the photos on Facebook with the logo removed from the photo. The photos appear on Facebook page as if the photographs were taken by the client. This can be argued to be a breach of the moral right of attribution of the photographer. If a fair use exception were introduced into the Copyright Act then the client could assert that placing the photos on Facebook was a fair use as it is a ‘private and domestic’ use of the photos (as set out in Proposal 4-4 of the ALRC Discussion Paper).

The response to the Discussion Paper

Arts Law is interested in comments from subscribers to ART+law about the proposal to introduce of a fair use exception and the impact on artists moral rights. Examples of Australian artists experiencing the effect of appropriation art will assist Arts Law in responding the ALRC Discussion Paper.

Artists and arts organisations can also make a direct respond to the ALRC – the closing date for submissions is 31 July 2013.[16]