Australian copyright law review recommends 'fair use' defence

Article  \  5 Mar 2014

Following an extensive review of Australian copyright law, the Australian Law Reform Commission (ALRC) has recommended the adoption of a US style 'fair use' defence to copyright infringement.

The ALRC argues the defence is needed to provide copyright law flexibility to deal with the changing digital world and to encourage innovative businesses dealing with the distribution and consumption of content.

However, content creators disagree and the Australian Attorney General has described the ALRC's recommendations as 'controversial'.

At the same time as they are pushing for extensions to their rights through the Trans Pacific Partnership (TPP) negotiation, content creators argue that fair use will only provide uncertainty and a disincentive to creative industries. They suggest any issues can be addressed by updating the fair dealing defences already prescribed in legislation.

In New Zealand, a narrower review of copyright law was put on hold last year pending the outcome of the TPP negotiation - the thought being that any review should focus on changes that fall within the scope of the TPP. Therefore, in the absence of its own domestic review, the ALRC may provide New Zealand some benchmark for assessing the impact of the TPP on New Zealand's copyright laws, whatever the outcome of the negotiation may be.

In this article we look at the ALRC's review from a New Zealand perspective and in light of the TPP.

Fair Use

Copyright infringement requires an unauthorised use of a copyright work. The 'fair use' defence suggested by the ALRC would provide a defence if the use is deemed to be 'fair' when assessed against a number of fairness principles. Amongst others, these require an assessment of any public benefit of the use as well as the impact on the potential market for, and value of, the copyright work.

In the US, fair use defence has been applied to allow the use of copyright material in criticism, review, parody, satire and news reporting. However, importantly it has been easily applied to fast-evolving digital sectors in relation to format shifting, transient copying through networks and recently in relation to the reproduction of content within Google Books.

By comparison, Australian law currently provides a number of prescribed 'fair dealing' defences that are specifically set out in legislation. These cover activities such as study, criticism, review and news reporting. However, if changes are needed to allow for new technologies or changes in what society considers reasonable, Parliament needs to amend legislation to provide any new or expanded 'fair dealing' defence. However, this can be a slow process. As the ALRC points out, Australian regulators were still looking at a 'fair dealing' defence for the use of VHS video recorders in 2006 when the technology was all but obsolete.

The ALRC argues that fair use provides flexibility because it is based on principles rather than prescriptive rules. As a result, those principles can be applied to new situations without the need to amend existing prescribed rules. These could include the storage of copyright material on the cloud, the archiving of content at libraries, the use of copyright work in parodies or satire as well as transformative uses such as sampling and remixing.

The ALRC's recommendations have been criticised. Content producers argue that the 'flexibility' really means 'uncertainty' and that content producers and users should be certain about the extent of their rights. They say that the uncertainty of the scope of fair use is only good for encouraging arguments between lawyers and, ultimately, fair use will only provide a disincentive for content producers like the film industry. However, proponents point out that fair use has not prevented the massive generation of copyright material from the US over the last 30 years. 


Recognising that a change to fair use would be controversial, the ALRC provided an alternative approach. That is an overhaul of the existing fair dealing defences to bring them into line with current technological and social expectations.

Similarly the 2010 'Hargreaves' review of intellectual property law in the UK recommended the expansion of its fair dealing exceptions by implementing the EU exceptions, including exceptions in relation to format shifting and parody. The UK review noted that implementing the EU exceptions would provide many of the benefits of the US fair use doctrine, without making such a fundamental changesto the structure of UK copyright law.

Other alternatives have been suggested, including changing the focus of copyright law from the right to copy, to a proprietary right to use, where that use right may be infringed by commercial use and unfair private use.

Ultimately, whatever approach is taken, something needs to be done to ensure that the law keeps up with technology and changing attitudes in society about what is, and what isn't, fair. To be at the forefront of these changes it is important that businesses are not tied up by inappropriate laws from another era. 

New Zealand

Last year, New Zealand was due to review the adequacy of the 2008 amendments of the New Zealand Copyright Act. However, the review was put on hold pending the outcome of TPP negotiations. In delaying the review, the government noted the Australian and UK reviews and that the current exceptions are likely to be out of date with current technology. This is notwithstanding the 2008 amendments to provide for format shifting of sound recordings.

Whether New Zealand will be able to consider a fair use defence or amendments to the current fair dealing regime may be constrained by the outcome of the TPP negotiation.

The TPP is likely to impact a number of aspects of copyright law. The draft of the TPP in mid 2013 includes provisions confirming a copyright holder's right of reproduction. However, the scope to which individual countries are able to provide exceptions to this position is still the subject of negotiation, including how the rule will apply to transient or incidental copies that arise as part of transmission in networks.

Concern has been raised that any exceptions that are provided do not themselves act as limiting the ability of countries to make new exceptions in the future. Critics have pointed to the 2010 Australian US Fair Trade Agreement 2004 as an example of where the US was able to demand limits on Australia's exceptions to the copyright owner's right to control temporary reproductions of works. However, it is clear from the draft TPP that a number of countries want to ensure they are able to make their own exceptions in line with existing international conventions. It would perhaps be surprising if the negotiation resulted in countries having less flexibility than the flexibility provided by the US's own fair use defence. Regardless, given its strong support of content creators, it seems still likely the US will want other countries to 'do as it says and not what it does' when it comes to introducing a fair use defence.

Ultimately, given the secrecy of the negotiation and the range of issues involved, any comment on how the TPP will impact copyright in New Zealand is speculative. The leaked draft makes it clear that New Zealand negotiators are actively asserting New Zealand's interests. Therefore, we can only wait to see the outcome.