Copyright Agency attends the Productivity Commission Public Hearing

June 22, 2016 | Fair Use

The Copyright Agency attended the Productivity Commission’s Public Hearing on Tuesday 21 June. Below is the full text version of opening remarks from Copyright Agency CEO, Adam Suckling.

 

Productivity Commission Public Hearing Sydney

Intellectual Property Arrangements

Thank you for the opportunity to participate in this public hearing.

The inquiry is an important one.  It goes to the big questions around Australian creativity, consumer’s access to goods and services, and ensuring incentives to innovate.

We welcome aspects of the draft report.  We are pleased to see the Commission’s recognition of the value of statutory licensing and licensing initiatives such as the ‘Copyright Hub’.

There are however four major issues with the report in our view.  These are as follows:

  • First, the report and its recommendations are hostile to the rights and livelihoods of Australian writers and what are called ‘intermediaries’ – media, film and publishing companies that invest, take risks and take products to market.
  • Second, the report’s starting point appears to be based on the mischaracterisation that ‘the copyright system has expanded over time’ and that therefore radical recommendations are needed to slash back this expansion. In fact, the premise is not correct.
  • Thirdly, the report overplays the costs and understates the benefits of the current system. This is found, for instance, in the way the report deals with education licensing. Some of the statements made on radio by Commissioners have been surprising to us.
  • Finally, the position the report adopts represents a dagger at the heart of creativity and if implemented would undermine their rights and the ability of companies to invest.

I will address each of these points in turn.

Hostile to the rights of creators

Taking the first point on the report’s attitude to Australian creativity: Our start point is that where a writer, publisher, a film maker or film distributor creates something, their copyright in that work should be respected and they should get a reasonable return for their work , or the risks they have taken in investing in that work.

The report’s view that a more ‘reasonable estimate (for copyright term) would be closer to 15 to 25 years’ is an example of what I mean about the report’s hostile approach to creators.

We all know the Government cannot change the term because of our international treaties – as both your draft report and the Minister have made clear.

But in our view this preferred position in the report on term speaks volumes about the general attitude towards creators contained throughout the report.  As we have said in our response – this approach seeks to reverse an international standard that was set by the Berne Convention in 1886.

So if this we ever to come to pass, it would mean that an author like Anna Funder, who had Stasiland published in 2001, would lose copyright protection next year. Next year!

The recommendations on fair use would also see writers and publishers not receiving money for the use of their work by large institutions such as businesses, government and education institutions.

Copyright system expanded over time

The second issue we have with the report is its position that the copyright system has expanded over time and all this expansion has been to the benefit of rights holders.

We don’t accept this characterisation.  As we outlined in our initial response to the inquiry, changes to the scope of protection have been accompanied, or followed, by new exceptions. For example:

  • in 2000, the new right to make content available online was accompanied by extension of access provisions for education and libraries to digital
  • Also, the extension of the term of protection in 2005 was followed in 2006 by new exceptions for parody, satire and private copying

In our view it is important to look at all the changes and take a holistic view of the developments in the copyright system in the context of how any future enhancements should be approached.

Overplays problems and understates the benefits

The third matter of concern to us in the report, and in some of the public comments by Commissioners, overplays problems in the current system and understates the benefits.

The Commission has said publicly that, ‘You only need to see what (problems) the schools have to go through to get access to copyright material’.  It is unclear to us what this means.

Today schools get access to everything ever published under the statutory licence.  That is -everything ever published!

Australia’s copyright system enables teachers to copy and share content more extensively than anywhere else in the developed world.

The price of this is just over $17 per student, per year for schools.

To put that in context, copyright fees for the schools sector is less than 0.15% of the costs of educating a school student.

For universities, of the $25.8 billion in revenue in 2014, the copyright fee was 0.12%.

This cost is paid by school departments not students.  The overall cost is low – and transaction costs are minimised because they only need to deal with one licensing body.

In fact, the system is supported by many teachers precisely because it supports the creation of new teaching material and provides access to huge amounts of copyright content.

Nowhere is this more clear than in the submissions from teachers’ bodies to the Australian Law Reform Commission.

Frankly, the position put by other bodies that represent the education sector, would reduce or eliminate the fair compensation that is currently paid for use of works.

All the matters that have been raised in submissions by those representatives of the education sector will be dealt with in the next round of commercial negotiations and are resolvable.

And if they cannot be resolved, then the Copyright Tribunal can determine the value that should be attached to the various types of use made under the licence.

That can include the determination of the value of a ‘type of use’ is zero.

Danger to Australian creativity

Finally, the report’s recommendations in regard to introducing ‘fair use’ represents a profound danger to Australian writing and publishing.

There are multiple problems with ‘fair use’.  It is not as the report appears to believe a clear doctrine that will be settled by the courts and then we will all get on with our lives.

As for example Stanford Universities Library online guide on fair use makes clear:

‘Unfortunately the only way to get a definitive answer on whether a particular use is fair is to have it resolved in federal court’.

This uncertainty remains after more than 120 years of case law.  The truth is ‘fair use’ is a lawyer’s picnic.  Or perhaps a rolling, unending banquet.

But most concerning to us is the simple fact that the introduction of ‘fair use’ runs the very serious risk that people and companies that create work used by large organisations, won’t receive a fair reward for that use and won’t have an incentive, or ability, to keep producing.

Canada is instructive in this regard.

The fact is that the Canadian education industry stopped paying license fees to Canadian writers and publishers following the change in law, resulting in an estimated loss of $30 million a year for content creators, and the closure of publishing operations in Canada.

The fact also is that the education bodies in that country – before the change in law – said that the change would not lead them to stop paying licence fees.  It did.

Forward

This is not to say that we do not support changing the copyright system to ensure that it remains relevant in the face of changes in consumer behaviour driven by digital.

I worked at Optus in the late 1990s and early 2000s when it was rolling out mobiles, which have transformed the world.  I also worked at FOXTEL when it went from analogue to digital.

Many of the members of the Copyright Agency deal with the challenges and opportunities of digital each and every day.  Of course change is constant.

We have agreed already some sensible changes to updating the Act – and simplifying the statutory licence scheme and bringing unpublished works in alignment with published works.

In our view, the right way forward is a careful consideration of issues that cannot be resolved well within the current frame work and a targeted approach to fixing the – not a one size fits all provision that may address none of them well.

Some of the limitations and uncertainties of ‘fair use’ are described well in the US Copyright Office report on mass digitisation and we think the Commission may find those comments useful.

Thank you.