The link below is to an article that takes a look at new copyright rules in Europe.
Australia’s consumer laws aren’t adequately protecting Australians who buy digital products such as e-books and digital music. If a TV doesn’t work, or an iPod or computer is faulty, the law provides a remedy. The same is true for physical books and music media – but not for their online counterparts.
Under Australian law consumers are entitled to receive goods that are of acceptable quality and fit for their purposes, and that correspond with their description, among other legally enforceable consumer guarantees. But these guarantees apply only to “goods” and “services”.
How digital products fit (or don’t fit) into the goods and services categories has been debated for decades, and the law still hasn’t properly accommodated them.
Australia’s consumer laws went through a major update in 2010, but remain out of date. The digital world moves fast, but our consumer laws remain rooted in a system that assumes “goods” and “services” are the only types of trade. These laws still owe much to sale of goods legislation passed in the United Kingdom all the way back in 1893.
What are consumer laws?
The law generally expects that people and companies entering into contracts are able to look after their own interests. Consumer laws exist to provide additional legal protection to consumers, who are usually in an unequal bargaining position compared to the companies they deal with.
A consumer is someone who acquires goods or services that are ordinarily bought for personal, domestic or household use, or for a price of A$40,000 or less.
Consumer purchases include a range of items – TVs, iPods and computers are just some examples. Where a consumer purchases goods, the law requires that those goods comply with particular consumer guarantees, no matter what the terms and conditions of sale say.
If a new “smart TV” won’t connect to wifi, or if an iPod or computer’s battery doesn’t last as long as it should, the consumer guarantees provide a remedy.
It was during the 1980s and through to the 2000s that initial questions arose over how the law treated software. The question at this time was whether software counted as “goods”. A series of court cases found that software was considered goods only if it was supplied within a tangible object – for example, on a disk (later, on a CD or DVD).
Because of this, when consumers started downloading software over the internet they were left without many protections. If software downloaded directly from the internet didn’t do what it was supposed to do, they might have no effective legal rights at all.
In 2010, with the Competition and Consumer Act, the definition of goods was finally amended to include “computer software”. But this still excludes many common digital products, such as e-books and digital music. These do not constitute “computer software” as the law understands it.
Recent court proceedings highlight the large gap in the Australian consumer law.
In 2016, the Australian Competition and Consumer Commission brought a Federal Court case against Valve Corporation, alleging it misrepresented consumers’ rights concerning content bought through the Steam video game platform.
Justice Edelman found that Valve Corporation had supplied “goods”, being “computer software”, but also found that “non-executable data was not computer software”, and that such non-executable data could include “music and html images”.
In other words, the computer games were “goods” (attracting the law’s protection) because they were executable programs. This part of the Federal Court’s decision was not challenged in the Full Court of the Federal Court, which dismissed Valve Corp’s appeal in December 2017.
If this definition of computer software is applied in future cases, then there is a legal gap when it comes to other types of digital products. E-books and digital music (among others) require executable files to work, but aren’t themselves executable files, so would not constitute computer software.
If they don’t constitute computer software, they also aren’t goods under the law. And if they aren’t goods, consumers who acquire these digital products don’t obtain the protections and guarantees of Australia’s consumer laws.
The wider consequences of inequality in the law
Beyond this problem for consumers, this legal gap also creates an inequality for retailers. Retailers that deal in physical books and music (whether they are “bricks and mortar” or online) are required to comply with the guarantees and protections under Australian consumer law.
This means that businesses dealing in physical goods incur costs that those that sell only digital equivalents (apart from software) can avoid. Australia is in effect subsidising those who sell only digital products (many of them foreign companies) by not subjecting them to the same legal liabilities.
A simple legislative amendment can easily solve this problem. Rather than providing that goods includes “computer software”, a legal provision stipulating that goods include “computer software and other types of digital products” would capture the broader range of products we see in the marketplace today.
We can learn from the United Kingdom, where digital products are given their own dedicated consumer rights regime. The United Kingdom has a series of consumer rights applicable to the supply of goods, the supply of services, and also to the supply of digital content.
As the Australian Copyright Agency comes under pressure for appearing to use member royalties to enshrine self-serving copyright laws, it’s time to question the purpose of copyright. Some argue current laws ensure artists are fairly paid and make more local content. The evidence doesn’t support this idea.
Copyright is primarily concerned with creative works.
Exploitation of copyright occurs when the author of a creative work excludes all others from reproducing or otherwise using their work for up to 70 years after their death, unless they, the authors, agree to authorise any such use (i.e. pay a fee or a royalty under voluntary or compulsory licences).
On the pro-copyright side, we have the global movie and music industry, many IP lawyers and prominent authors.
Does copyright encourage more creative work?
The intention of copyright laws is to encourage people to create cultural products such as books, songs, movies and fine art etc. The argument goes that if the authors of these works (or their owners) can charge royalties to those who enjoy these works, then more people will decide to work as authors.
The author gets an income and can therefore spend more time creating works.
However, there are strong arguments that copyright may have gone too far. Royalties only go to a small amount of people, and they mostly prop up the incomes of “rent seekers”. Rent seeking is when income from copyright just makes existing creators wealthier and does not encourage more people to become creators.
Royalties should not be paid beyond the point at which the income stream has an effect on decisions to create more now. Existing copyright laws (which can give control for over 100 years) are merely lining the pockets of movie houses and the heirs of dead authors, without having any effect on the current group of artists.
Australian culture will falter without copyright
The next argument in favour of copyright is that the true value of copyright is the ability for the owner to control the use of their work through licensing.
Given the ubiquity of the internet, it is now very easy to copy works and local authors will not be able to make a living from their work.
Hence, any time or effort they put into creations will be in their spare time after working elsewhere. Enabling authors to receive some royalties goes some way towards providing them with independent income.
But the contra-copyright group say the fact that most royalties go to very few authors, or go overseas to the big music and movies houses and publishers, means copyright does little for emerging and local artists.
In fact, the best way to encourage the local cultural sector might be to offer stipends or grants directly to local artists.
It is not to use copyright to overcharge the ordinary householder; prosecute those who illegally download movies; or to waste the time of students and school teachers filling in royalty forms.
A right to control your creation?
Another pro-copyright argument is that copyright is needed to ensure authors are credited for, and control, their work. This is also known as “moral rights”, and creates the obligation to attribute creators and treat their work with respect.
But we could question whether this is the role of copyright. Gifting moral rights does not necessarily mean the artist should be able to decide who can read or watch his or her work for the purpose of genuine enjoyment.
Authors should be paid for their contribution to society
The pro-copyright group claim that royalties are justified on fairness grounds. People should be rewarded according to their contribution to society and as royalties are linked to use (reading or watching), it is a clever way to link contributions.
However, in terms of value to society, a case can be made that primary school teachers, civil engineers or surgeons should be paid more. And as copyright only delivers a living wage to very few artists, we can question whether the current laws are a fair system.
The Productivity Commission recently agreed with the Australian government to reform the education statutory licensing scheme, but commented that this decision was missing a recommendation to move to a “fair use” system of copyright exceptions.
Fair use allows for certain circumstances where people can use copyrighted material without the copyright holder’s permission.
Australia does not have a fair use exception. It only has a more limited “fair dealing” exception which means we can only avoid permission for uses that are on a list.
A fair use system would allow users such as schools and universities to use works in some situations without paying any royalties. Maybe, we should limit copyright to 20 years and increase our stipends to local artists instead.
The link below is to an article that takes a look at possible new book importation laws in Australia.
The report, though, makes a number of sensible recommendations that will help modernise Australia’s copyright laws for the 21st century. Economically, the report is rigorous and comprehensive.
Morally, the study shows a subtle and nuanced appreciation that copyright law is designed ultimately to promote the public interest of the Australian community.
The proposed reforms will enhance consumer rights, competition policy, access to knowledge and Australia’s ambitious National Innovation and Science Agenda and “ideas boom”.
The report also makes some helpful suggestions regarding Australia’s process for treaty-making in respect of intellectual property.
The Productivity Commission has recommended the repeal of parallel importation restrictions for books, which supports the position of Prime Minister Malcolm Turnbull and Treasurer Scott Morrison.
Australia’s parallel importation restrictions are an anachronistic hangover from British imperial publishing networks and are anti-competitive.
Over the past 40 years, the High Court of Australia, the Prices Surveillance Authority, the Australian Parliament, the Australian Competition and Consumer Commission, the Productivity Commission and the Harper Competition Policy Review have highlighted how Australian consumers are paying more than they should for books.
Parallel importation restrictions largely benefit multinational publishing networks and foreign authors rather than local authors. As the Productivity Commission comments:
Most of the additional income from higher book prices goes to overseas authors and publishers whose works are released in Australia. The Commission estimated the additional income flowing overseas is around 1.5 times that retained by local copyright holders. In effect, PIRs impose a private, implicit tax on Australian consumers that largely subsidises foreign copyright holders. Indeed, none of the authors with top ten titles in the sample provided by HarperCollins are Australian.
The removal of parallel importation restrictions would be beneficial for Australian readers. Cheaper books for Aussie kids would be a great policy outcome.
In response to the Productivity Commission, publishers and authors have been running a scare campaign against the commission’s recommendations. The multinational publishing empire HarperCollins has grimly defended the restrictions.
Authors Thomas Keneally, Richard Flanagan, Peter Carey, Tara Moss and Jackie French have railed against the report. However, their emotive arguments are weak, inaccurate and unconvincing.
Parallel importation laws are not an effective means of protecting local culture or creative livelihoods. The removal of the restrictions will not destroy the local publishing industry. Indeed, opening up the book market may well be beneficial for publishers and authors by removing age-old distortions in the marketplace.
Australian consumers deserve a fair deal in the digital economy. It has been concerning that Australian internet users are paying much more for IT works than our counterparts overseas.
The Productivity Commission was concerned that “Australia’s copyright system has progressively expanded and protects works longer than necessary to encourage creative endeavour, with consumers bearing the cost”.
The commission also recommended that Australia should adopt a broad defence of “fair use”, supporting the previous inquiry by the Australian Law Reform Commission Into Copyright Law and the Digital Economy.
The defence of fair use in the United States has enabled innovative start-ups to flourish in hot-spots such as Silicon Valley, Boston and New York. Indeed, the US courts recently recognised that Google Books was protected under the doctrine of fair use.
Professor Peter Jaszi has noted that fair use is the “secret sauce” of US competitiveness.
Australia is at a competitive disadvantage because it has only a much more limited, purpose-specific defence of fair dealing. Start-ups may well be reluctant to base themselves in Australia because of fears of copyright litigation by incumbent industries.
The Productivity Commission recommended:
A new system of user rights, including the introduction of a broad, principles-based fair use exception, is needed to help address this imbalance.
The commission observed:
One of the key advantages of a fair use over a fair dealing exception is that the law can adapt to new circumstances and technologies.
The Australian Law Reform Commission has already highlighted how a defence of fair use could future-proof Australia’s copyright laws.
In addition, the Productivity Commission has recommended that all Australian governments should implement an open access policy for publicly funded research.
The policy should provide free access through an open access repository for all publications funded by governments, directly or through university funding, within 12 months of publication. This proposal will help boost Australia’s Ideas Boom.
The open access sharing of research will support the creative industries, as well as science and technology. Ryan Merkley, CEO of the Creative Commons project, has highlighted the benefits of open access publishing.
In particular, public health research could benefit. As US Vice President Joe Biden recently observed, there is a need to get cancer research out from behind pay-walls.
The Australian government has been involved in a flurry of negotiations over intellectual property and trade, with the Australia-US Free Trade Agreement, the Anti-Counterfeiting Trade Agreement, the Trans-Pacific Partnership and various trade agreements with Chile, Japan, China and South Korea.
The Productivity Commission noted that the Mickey Mouse copyright term extension under the Australia-US Free Trade Agreement was incredibly expensive for the Australian community. Australia is a net importer of copyright works, and there was a need to mitigate against the costs of exorbitant copyright term extensions.
Reflecting upon such hectic activity, the Productivity Commission has been critical of the government entering into trade agreements without openly and fully assessing the benefits and costs of intellectual property obligations.
The commission warned:
Agreements embodying provisions on the scope and term of IP protection necessarily involve a ‘wrestle for rents’ – Australia should not capitulate too easily.
Moreover, the commission was concerned about the “spaghetti bowl” of trade agreements that Australia had been involved in:
Further, in more recent times, there has been a tendency to favour bilateral and regional initiatives over multilateral ones, resulting in overlapping and complex rules.
The commission’s report will provide a salutary caution for the Australian Parliament as it evaluates the Trans-Pacific Partnership.
Rather than let the Productivity Commission’s report be lost in the tumult of the 2016 election, Australian politicians should pay heed to the popular interest in the study.
The Australian public has been crying out for copyright reforms to our anachronistic laws to bring them up to date with the digital age of the 21st century.
There is a great opportunity for political leaders to capitalise upon this public interest in competition, innovation, access to knowledge and fair trade.
The link below is to an article that explores the possible change to Australia’s fair use laws.
Google is one of my favorite brands. Sure, it cops plenty of flak and probably some of it is deserved, but I have to say they are a company that has largely got it altogether. I’m a fan anyway – for what that’s worth.
I am a big fan of Google’s ongoing project to digitize the world’s books and literature. Sure, they need to conform to copyright laws like the rest of us while doing so and they have had some questionable episodes in this project to date. But what an amazing opportunity to read books that have been out of print for years and even centuries. It is a great service and project.
Google was also digitizing the world’s newspapers and this also could have been a major gift to the world, but sadly the project has been shut down. They have managed to place a huge amount of archival material onto the net and it is fully searchable – which is just brilliant. How amazing it would have been if all of the world’s newspapers had been digitized and made available on the web?