The proposed fair use exception

The fairness factors

4.150 The fair use exception proposed contains four fairness factors. These serve as a checklist of factors to be considered in a given case, with no one factor being more important than another. Rather, all factors would need to be considered and balanced and a decision made in view of all of them.

4.151 The list of fairness factors is non-exhaustive. Other factors may be considered. For example, principles of justice, equity and perhaps even acknowledgment of moral rights may also be relevant in determining the fairness of a use.

4.152 The fairness factors proposed are based upon the four factors that are common to both the US fair use provision and the existing Australian provisions for fair dealing for the purpose of research or study—specifically the CLRC’s consolidated expression of them. The ALRC proposes wording that closely paraphrases these similar factors but also seeks to improve the clarity of the language.

4.153 Analysis of the four factor test in the US requires consideration of the following matters.^[253]

• First factor—‘the purpose and character of the use’. This factor encompasses two issues. First, was the defendant’s use commercial? Secondly, was the use ‘transformative’?^[254]

• Second factor—‘the nature of the copyrighted work’. Again there are two separate matters to be considered. First, was the plaintiff’s work creative? Secondly, was that work published?

• Third factor—‘the amount and substantiality of the portion used in relation to the copyrighted work as a whole’. This consists of an evaluation of two matters. First, how much is the defendant alleged to have taken? Secondly, how important was that taking in the context of the plaintiff’s work?

• Fourth factor—‘effect upon the market for or value of the copyrighted work’. What is the market effect of the defendant’s conduct?

4.154 A number of submissions called for the use of the existing fairness factors for the fair dealing exceptions for research or study^[255] or the US fairness factors^[256]—a number commenting on their similarity^[257]—in determining the fairness of a use under a new fair use exception.

4.155 Reasons given in support of a new Australian fair use exception which adopts these fairness factors included:

• they derive from the common law;^[258]

• the four factors in the US and Australia are substantially the same,^[259] so Australian courts are familiar with them^[260] and so are ‘academics and students who have relied on the fair dealing exception to undertake their own research and study’;^[261]

• they are ‘easily understood’ so would ‘assist users to feel confident making their own evaluation of how they are able to use copyright material in their own specific circumstance’;^[262]

• they are already being applied by some institutions with respect to orphan works and other copyright material in the mistaken belief that Australia already provides a fair use exception;^[263]

• they are substantially the same as those used in other countries such as Israel and the Philippines;^[264] and

• Australian courts would be able to have regard to extensive US jurisprudence^[265] as well as that of other countries who have adopted a similar flexible, fairness-based model.^[266]

4.156 Some also commented that this would afford courts and users greater statutory guidance than currently exists with respect to assessing the fairness of dealings for the specified purposes other than research or study.^[267]

The illustrative purposes

4.157 The fair use exception should contain a non-exhaustive list of illustrative uses or purposes of fair use. These may be thought of as examples of the broad types of uses that may be fair.

4.158 The fair use exceptions in the US and other countries that have enacted fair use or extended fair dealing exceptions, all include illustrative purposes or examples of fair use.

4.159 The importance of listing illustrative purposes in the fair use exception was noted in a number of submissions.^[268] For example, the Law Council of Australia suggested a fair use model ‘that would include reference to the existing specific copyright exceptions which would then act as examples to courts of the types of activities that constitute fair use’.^[269] Similarly, the National Library of Australia called for some existing exceptions

[to] be gathered together under the umbrella of a new fair use exception, and that existing exceptions be listed as within this general exception, illustrating but not defining the extent, of the fair use exception.^[270]

4.160 The fact that a particular use falls into one of the categories of illustrative purposes does not necessarily mean that the use will be fair. Nor does this create a presumption that the use is fair.

4.161 Conversely, the fact that a use is not included as an illustrative purpose will not be a bar to that use constituting a fair use. In theory, a use for any purpose may be considered under the fair use exception.

4.162 Some submissions noted the need for the purposes to be illustrative only and non-exhaustive.^[271] For example, Universities Australia stressed the need for the exception to be ‘sufficiently flexible to allow courts to determine that uses that are not expressly referred to in any opening words or preamble are nevertheless permitted subject only to a fairness test’.^[272] It continued:

it should be sufficiently flexible to allow courts to determine that uses that are unanticipated at the time that the exception is introduced come within the scope of the exception if found to be fair.^[273]

4.163 The ALRC’s list of proposed illustrative purposes includes purposes that are:

• currently the subject of purpose-based exceptions—for example, all but one of the existing fair dealing purposes; and

• not currently the subject of express free use exceptions in the Copyright Act—for example, quotation and non-consumptive use.

4.164 A number of submissions supported this approach, particularly with respect to consolidating the existing fair dealing provisions into a more general fair use exception.^[274]

4.165 The rationale for including the specific illustrative purposes proposed below is made in a number of other chapters in this Discussion Paper.^[275]

Relationship with existing exceptions

4.166 If Australia is to adopt the new fair use exception then it is critical to determine the relationship with exceptions currently in the Copyright Act. It might be said that the issue of how fair use would fit with the existing exceptions and statutory licences was considered ‘very little’ during the earlier debates.^[276]

4.167 In the Issues Paper, the ALRC asked whether a new broad, flexible exception should replace all or some existing exceptions or should apply in addition to existing exceptions.^[277] Submissions in favour of a new broad, flexible exception appeared to give the greatest attention to answering this issue. Among the options canvassed there was support for repeal of some exceptions,^[278] perhaps with a transitional approach.^[279]

4.168 The main concerns expressed in response to this question were for a model that would best ensure the retention of the existing Australian jurisprudence,^[280] provide clarity,^[281] as well as allow the development of further exceptions in response to changing technology and practices.^[282]

4.169 The Copyright Advisory Group—Schools suggested that a degree of certainty may be attained in other ways, including drawing upon the Israeli model of deeming certain uses as fair ex ante—that is, before the event.^[283] Under the fair use regime in Israel, the Minister of Justice may make regulations prescribing conditions under which a use shall be deemed a fair use.^[284] As one commentator has remarked:

This novel method may provide some certainty and clarity for future users who wish to rely on the fair-use defense. It overcomes some of the chilling effects that vague standard-based exemptions involve; especially regarding users who by nature are risk-averse. However, sec 19(c) could also lead to its minimum safe harbors becoming a de-facto ceiling.^[285]

4.170 The ALRC considers that it is preferable to introduce a model that replaces some of the existing exceptions, particularly where it is anticipated that many of the existing excepted uses would be covered by the new fair use exception. This would reduce the length and detail of the Copyright Act and should assist in mitigating statutory interpretation problems.

4.171 Elsewhere, this Discussion Paper contains proposals to repeal a range of specific exceptions, if fair use is enacted. The exceptions are as follows:

• In Chapter 7 (‘Fair Dealing’): ss 40(1), 103C(1), 41, 103A, 41A, 103AA, 42, 103B, 43(2), 104(b).

• In Chapter 8 (‘Non-consumptive use’): ss 43A, 111A, 43B, 111B, 200AAA.

• In Chapter 9 (‘Private and Domestic Use’): ss 43C, 47J, 109A, 110AA, 111.

• In Chapter 11 (‘Libraries, Archives and Digitisation’): s 200AB.

• In Chapter 13 (‘Educational Use’): ss 28, 44, 200, 200AAA.

• In Chapter 14 (‘Government Use’): ss 43(1), 104(1), 48A, 104A.

• In Chapter 16 (‘Broadcasting’): ss 45, 67.

4.172 On further review, there may be other exceptions that should also be repealed, if fair use is enacted. Robert Burrell, Michael Handler, Emily Hudson and Kimberlee Weatherall submitted a comprehensive list of such provisions, and a list of those that should clearly remain.^[286] The former list contains a range of provisions, including exceptions relating to product information for chemicals and medicines,^[287] and computer programs,^[288] which the ALRC has not examined at this stage.

4.173 Other stakeholders suggested the repeal of certain exceptions, regardless of fair use reform. For example, the Arts Law Centre of Australia submitted that ss 65–68, 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’.^[289]

4.174 Repeal of specific exceptions is proposed, in part, in the expectation that most uses now covered would remain permitted under a developing Australian fair use law. However, it is possible that some uses covered by these specific exceptions may not meet the test under the proposed fair use exception. As ARIA observed, ‘[i]n some cases exceptions in Australian law are more generous than those found under US law’.^[290]

Interpreting fair use

4.175 The fair use exception contains some guidance for users of copyright material and the courts—namely the list of illustrative purposes and more importantly, the four fairness factors. This would provide users and courts with more statutory guidance than they currently have with respect to some of the exceptions such as the fair dealing exceptions for purposes other than research or study.^[291]

4.176 Further guidance may be found in:

• existing Australian case law;
• other relevant jurisdictions’ case law; and
• any industry guidelines that are developed.

4.177 A number of submissions considered that, if a new fair use exception were enacted, existing Australian case law, particularly that pertaining to fair dealing, would be of some relevance and provide some guidance to the courts.^[292] For example, the Law Institute of Victoria submitted, ‘[g]iven the similarity of the US fair use factors with the Australian factors for determining fair dealing, our jurisprudence on when a dealing is fair may also be of assistance’.^[293]

4.178 However, others were concerned that ‘it may result in arguments that the current fair dealing exceptions have been relaxed’.^[294] In a joint submission, SBS, Commercial Radio Australia and the ABC expressed concern that any proposal to include the fair dealing exceptions for the purposes of reporting news, criticism or review, and parody or satire within a fair use provision would mean that these exceptions would be ‘open to re-litigation’ and their operation may be restricted.^[295]

4.179 A number of submissions were of the view that it would be helpful if Australian courts could draw upon US or other countries’ jurisprudence.^[296] The Law Council of Australia submitted:

as a relatively small country, the amount of litigation in relation to copyright should also be relatively small. Drawing upon the jurisprudence of the United States would permit Australia to take advantage of the intellectual and financial investment in the creation of that jurisprudence over many years without the disadvantage of having to expend significant judicial resources in the development of a completely stand alone Australian view of fair use.^[297]

4.180 Google submitted that Australian courts would be able to draw upon the approaches taken in other relevant jurisdictions and clarified:

This is not to say, of course, that US or other foreign jurisprudence would be exported in its entirety to Australia; but rather that Australian judges would not necessarily be starting with a blank slate when deciding fair use cases.^[298]

4.181 Some who considered that Australian courts would be able to use US or other countries’ jurisprudence to inform their decisions submitted that it would be helpful for this to be specified,^[299] possibly by an express statement in the relevant Explanatory Memorandum.^[300] As the Australian Digital Alliance and Australian Libraries Copyright Committee submitted:

If the ALRC believes there is merit in referring Australian courts to the approach adopted by courts in the United States, it could recommend that this be clarified by a statement in an accompanying explanatory memorandum to any new provision.^[301]

4.182 In the ALRC’s view, an express statement about the extent to which US or other countries’ jurisprudence should be taken into account by Australian courts is unnecessary. It is well-established that foreign case law may be used by Australian courts, to the extent that the reasoning of such decisions is persuasive.^[302] If fair use is enacted, the ALRC would expect that Australian courts may look to US case law, in particular, as one source of interpretative guidance, but would not be bound by such decisions.

4.183 Another way in which some certainty could be sought in a fair use regime is by the development of industry guidelines and codes of practice.^[303]