Arts Law responds to the ALRC Copyright Report – initial comments by Arts Law's executive director, Robyn Ayres.
On 13 February 2014, the Australian Law Reform Commission (ALRC) released its final report on Copyright in the Digital Economy. The ALRC was asked to consider whether current copyright exceptions are adequate and appropriate in the digital era.
Most controversially, the report recommends the introduction of fair use in Australia as a defence to copyright infringement replacing the current fair dealing exceptions. Fair use is currently found in a number of countries, notably the United States. The Commissioner in charge of the inquiry, Professor Jill McKeough said, ‘Fair use is a flexible exception that can be applied to new technologies and services, which is crucial in the digital economy.’ The report focuses on the interests of user communities with Professor McKeough saying ‘Fair use can facilitate the public interest in accessing material, encourage new productive uses, and stimulate competition and innovation.’
Whilst the Commissioner recognises the interests of creators stating ‘fair use also protects the interests of writers, musicians, film-makers, publishers and other rights holders. It was very important that in an inquiry about exceptions to copyright, we not lose sight of the purpose of copyright law’, Arts Law’s main concern in responding to the ALRC’s recommendation to introduce fair use into Australia’s copyright system is that fair use actually represents an erosion of Australian artists’ rights.
Hypothesis driven without empirical evidence of benefits
Fair use would create a radical change in Australia’s copyright system. The ALRC found it impossible to obtain empirical research on the economic impact of fair use concluding it is appropriate to take a hypothesis-driven approach to copyright reform. Whilst the ALRC points to the fact that the US has had fair use for over 30 years and has thriving copyright industries, this belies the huge difference in the Australian market, especially in relation to the creative industries. Despite the strongly presented concerns submitted by creator organisations and creative industries to the inquiry, the ALRC concludes that there will be ‘minimal free riding from the recommendations in this Report, and the micro-economic changes envisaged will encourage innovation and creation of copyright material, without harm to the interests of copyright owners.’ The difficulty with this conclusion is the lack of evidence to support it in the face of enormous concerns of creators about the likely disruption to the market in which they are trying to survive.
Arts Law acknowledges that there are some similarities between fair use and the current fair dealing exceptions but the ALRC proposal introduces significant new ways an artist’s copyright could be used without needing their permission or payment (with the illustrative list as just the starting point).
Fair use sends the message that copyright doesn’t matter. We already have a piracy problem, this will only make things worse.
The Report does not deal with the issue of piracy which was being dealt with by the Government elsewhere so was excluded from the terms of reference. However Arts Law is concerned that fair use is more likely to feed into increased piracy further reducing artists’ average earnings which are already significantly threatened. Australia is already a nation of users willing to take for free even where content is available through commercial licenses as recent statistics have demonstrated. Copyright along with moral rights is interpreted by artists as a form of respect for their intellectual and creative efforts and the erosion of that system only further encourages the culture of “free”.
Fair use threatens artist’s income
A recent Australia Council report indicates that early career artists earn $13,000 from their creative practice with a total income of $36,308. This is consistent with what we know from previous studies on artists’ incomes which show that more than 50% of artists earn less than $10,000 from their creative income with artists having an average income of $41,200 and a median income of $35,900.
Copyright revenue is but one income stream for artists. Having a diversified arts income is necessary in a market which is subject to change and fluctuations in ways other markets may not be. Therefore any income from their creative work is vital to Australia’s artists. It should also be noted that for certain categories of artists such as composers, musicians and writers, copyright may be a primary source of income.
Can the Act be improved rather than overhauled?
Whilst there are lots of complaints that the Australian copyright system is too complex (and some who want much greater free access to content say the system is “broken”), the review highlighted the need to simplify the current system. There are very few people who would disagree with the need to simplify the Copyright Act, however by recommending such a radical change as fair use with the alternative being a very extended version of fair to the exclusion of other options for reform, the ALRC missed the chance to properly examine how the current system could be overhauled without so radically diminishing the rights of creators.
The impact on artists and creators has been overlooked in favour of user groups, academics and educators
ALRC has come down heavily on the side of users groups and the academic community. Arts Law is concerned that the academic community represents only a portion of the stakeholders in this debate and are advantaged by virtue of the platform their associations with these institutions affords them. Individual artists’ interests in this debate have largely been neglected despite the evidence of the value of the copyright industry in Australia. Whilst numerous academics are cited in relation to artistic practices, their views represent those of the user and not the creator in this debate.
Whilst Arts Law recognises mash-ups and appropriation art as legitimate art forms, our work with thousands of Australian artists each year indicates that these artists are only a small portion in the smorgasbord of Australian creators.
ALRC has looked to the US which has had a fair use system for decades and still has a thriving entertainment industry. The ALRC recommends we can be guided what overseas courts have said. Unfortunately it is not that easy, especially as the courts in the US have not been consistent. Some American researchers say you can predict copyright case outcomes and others say you can’t. In a decision like Cariou v Prince one court said the appropriation artwork of Prince was not fair use then on appeal, the next court decided that it was. In this case whether the use was fair was not affected by the fact that Prince’s use was commercial and made money from Cariou’s work, with several of Prince’s paintings selling for over $1 million, because the use was held to be “transformative”. Another US artist, Jeff Koons in is a walking talking example of the unpredictable nature of the “transformative use” question.
Such a radical overhaul of copyright system will certainly provide Intellectual Property academics with lots of new research material. It will also provide Intellectual Property lawyers with lots of new work. It will provide our courts with lots of new litigation working out what it all means in Australia. It would be a mistake to think the elegant solution provided by the ALRC of fair use makes it all simple. It puts everything in the hands of the courts as to what is fair use and places artists in the position of having to assert their rights in an expensive forum (court). Artists can ill-afford to bring legal action yet the onus will be on the artist to assert their rights to test the scope of fair use. This means that many artists will simply not be able to do anything. Our experience is that artists already lack the ability to enforce rights under the current scheme which is narrower. The introduction of fair use would further erode their interests.
Artists as users and creators
Arts Law acknowledges that sometimes, artists are copyright users too. Filmmakers are a big group of Arts Law’s clients who depend on obtaining rights from other artists and content owners in order to make their film. We appreciate that clearing rights is not always easy and can really impede a project.
Our experience is that artists (regardless whether they use other’s work) rely on copyright for the protection of their work and generally support the current system, despite its meaning that they might need to seek permission to use other’s work. Our advice is given to all sorts of artists, and those who use art to create art generally appreciate why there are limitations in place. Sometimes the fair dealing exceptions mean that they will not infringe, sometimes they are using an insubstantial part. Sometimes, they are able to use works licensed through creative commons and sometimes they need a licence to avoid infringing and will have to consider their risks if they proceed without those permissions. We see real value in looking at how current licensing schemes can be streamlined but not in creating a fair use exception to the likely detriment of all artists. The idea that “we are all creators now” makes the protection of the arts, and of artists, even more important. Those who contribute significantly to our cultural and artistic identity and to that of our copyright income as a country can only continue to do so if their income streams are not subverted to the masses in possession of an iPhone, who also have the ability to create.
Copyright doesn’t stifle creativity, it rewards it and gives those who create the option of saying yes or no.
In many cases, artists are proactive in engaging uses of their works. We speak to artists who want to licence their work using both paid and non-paid models. The argument that copyright stifles creativity ignores the masses of legitimately accessible (and often free) copyright content for those who wish to make derivative works. Copyright doesn’t stifle creativity, it rewards it and gives those who create the option of saying yes or no and is, in our experience intrinsically related to the maintenance of the artists moral rights.
The ALRC Report says that a fair use scheme will be compatible with moral rights. If we are to adopt fair use then moral rights should be listed as one of the fairness factors to be considered up front. In the very few moral rights cases considered to date by Australian courts, moral rights infringements have not attracted damages awards of any significance, however our experience indicates artists still consider recognition of their moral rights as vitally important. It is possible in the scheme proposed that the use of a work could be a “fair use” even if the work infringes the original author’s moral rights. This would still require the artist bringing moral rights claim to enforce their rights. It is important for artists that their moral rights are strengthened and considered upfront rather than further exacerbating the current challenges presented in the balance between moral rights and fair dealing.
Aboriginal and Torres Strait Islander artists and ICIP
The ALRC Report does not properly consider the impact of fair use or expanded fair dealing on Indigenous cultural and intellectual property (ICIP). The Report states that all the recommendations are consistent with the requirements of Indigenous artists, custodians, communities as they can as appropriate, incorporate Indigenous cultural protocols. ICIP is still inadequately protected under Australian law. Arts Law through our Indigenous service, Artists in the Black (AITB) regularly has to advise Aboriginal and Torres Strait Islander artists and art centres that there is little that can be done to prevent certain misuses of their Intellectual Property. We didn’t expect the ALRC to address this problematic issue. In many cases, the clients we advise only have copyright as the last bastion of protection for their ICIP which has already been eroded and abused under the intellectual property system in Australia. Arts Law is particularly concerned about enlarging the uses which may be made of Indigenous intellectual property without permission. There will be many instances where the transformative purpose itself is what causes cultural harm and without some balancing criteria, fair use is likely to encourage transformation of works of cultural significance. Concerns about harm to ICIP apply equally to proposed illustrative purposes of orphan works and quotation
Education and Statutory licensing
There is a lack of clarity as to how the proposed unremunerated education exception and the remunerated statutory licence for educational use would work together. Again how this intersection is resolved would be on a case by case basis, not doubt involving lawyers, courts, time and money. Arts Law is concerned that the educational sector seems to have an expectation that creators and other copyright holders should be expected to subsidise the education sector.
For example if material is available for free on a website, that doesn’t imply that it is free to be copied and distributed as the educational sector would like. Like many other organisations, Arts Law spends a lot of time and effort developing materials which we make available for free for the benefit of the arts and broader community but we make it clear that if it is going to be used for purposes other than private use then we expect material to be licensed. ‘Free stuff’ on the internet can be an important income stream not only for artists but the not for profit sector.
There are also some surprising conclusions drawn in this section of the report such as time shifting for educational use could be a transformative use with the example of a news program being shown in a classroom. A concern is expressed that whilst private users can time shift, the educational sector cannot without adequate recognition that these are very different user groups.
Arts Law remains unconvinced about the need for a specific quotation exception whilst sympathetic to the needs of authors and the academic community about time and possibly costs involved in obtaining licences. Nevertheless we are very mindful of the importance of licensing income to many creators particularly in the music, film and games industries. Based on the US example it is doubtful that a quotation exception would enable increased sampling at least in the music industry despite the focus in the report on the Kookaburra case. In many instances quotations are already allowed because of their insubstantiality or are covered by criticism and review. Possibly a redrafted criticism and review exception would address some of the problems with the current provision. Alternatively a very tightly drafted quotation exception which was subject to fairness factors and ensured proper attribution may not interfere with the legitimate interests of creators.
Private and social use
The ALRC has recommended the introduction of a private use exception instead of the current format shifting and time shifting provisions. Arts Law sees benefit in consolidating and simplifying the way the current exceptions operate but remains concerned about the breadth of proposed private use as an illustrative purpose of fair use. The ALRC does not recommend a social use exception and says that private use is narrower but also says that social uses could be private use and would be decided on a case by case basis. Much of the rationale for a new private use exception is that it would better reflect social norms. There is an incongruity in the logic given that a significant amount of private use of copyright material in Australia is illegal downloading which has been specifically ruled out by the ALRC as falling within an exception for private use.
Arts Law believes a well-constructed orphan works scheme could be developed with sufficient consultation with all stakeholders. There may be some groups of stakeholders who do not want certain categories of works to included e.g. photographers, and Indigenous communities, because of the potential damage to income streams or cultural harm that could result. If an orphan works scheme were to be introduced then the hallmarks of any scheme should include:
- Requirement for a diligent search
- Attribution of creator
- Fair and reasonable compensation or a licence fee to be paid and
- Protection and respect of ICIP
Arts Law sees the approach taken by the ALRC as a lost opportunity to streamline and improve upon the current model. Arts Law agrees that there is plenty of room for improvement and there are some very complicated aspects to current system but we do not want to see the baby (Australia’s creators) thrown out with the bathwater.
Alternative fair dealing model
The alternative offered by the ALRC of not introducing fair use but moving to an expanded list of fair dealing purposes whilst providing a greater level of certainty, seriously expands what would be allowed to be used without the permission of, or payment to, the creator. The alternative model still greatly erodes artists’ rights.
Disturbingly, there is scant attention paid to the impact of these proposals on Australia’s artists and creative community. The ALRC appears to have dismissed the legitimate interests of the country’s creators with the balance swinging enormously to favour the interests of consumers, the educational sector and giant user groups like Google and eBay. Any reform to the copyright scheme in Australia should reflect the underlying value of rewarding creativity and originality, and should contribute to, rather than limit the already challenged revenue streams for artists.
– See more at: https://www.artslaw.com.au/articles/entry/arts-law-responds-to-the-alrc-copyright-report/#sthash.HwXxgWUE.dpuf
 ALRC, Media Release 13 February 2014
 As above
 As above
 ALRC Copyright and the Digital Economy Final Report, 13 february 2013 para3.120 p 79
 As above para 3.121
 As above pp 30, 33
 Thosby and Zednik, Do You Really Expect to Get Paid? Australia Council 2010, 9
 See for example The Report p212, para 9.17, para 9.77, p 49 para 2.44
 See for example the Report para 4.117, 4.121, 4.123
 Cariou v Prince F.3d No. 11-1197-CV, 2013 WL 1760521 (2d Cir. Apr. 25, 2013)
 See Rogers v. Koons, 960 F.2d 301 (2d Cir. 1992) and http://www.owe.com/resources/legalities/30-jeff-koons-copyright-infringement/
 The Report p42 para 2.7