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Intellectual Property Arrangements: Australian Productivity Commission Inquiry Report – exceptions and geoblocking

Australia’s exceptions are too narrow and prescriptive, do not reflect the way people today consume and use content, and do not readily accommodate new legitimate uses of copyright material. Legislative change is required to expand the categories of use deemed to be fair. Even when this occurs, changes have simply ‘caught up’ with existing community practice — Australia did not legalise the wide-spread practice of home VCR recording until as late as 2006, by which time most VCRs were household relics.

Australia’s narrow purpose-based exceptions should be replaced with a principles-based, fair use exception, similar to the well-established system operating in the US and other countries. Fair use would similarly allow Australia’s copyright arrangements to adapt to new circumstances, technologies, and uses over time.

Some inquiry participants suggested that the benefits from fair use are largely academic because, although current exceptions do not reflect how people use copyright material in the digital age, rights holders do not pursue infringements for ‘ordinary’ uses.

Participants argued that Australia’s current exceptions frustrate the efforts of online businesses seeking to provide cloud computing solutions, prevent medical and scientific researchers from taking full advantage of text and data mining, and limit universities from offering flexible Massive Open Online Courses. The education sector has also indicated that fair use would avoid the current perverse situation where Australian schools pay millions of dollars each year to use materials that are freely available online.

Rights holders have argued against the adoption of fair use in Australia. They claim that by design, fair use is imprecise and would create significant legal uncertainty for both rights holders and users. Rights holders also argued fair use would significantly reduce their incentives to create and invest in new works, holding up Canada as an example. Some have proclaimed that fair use will equate with ‘free use’, particularly by the education sector.

In addition to the fairness factors above, uncertainty would be further limited by including a non-exhaustive list of illustrative fair uses to guide rights holders and users.

Geoblocking restricts a consumer’s access to digital products, enabling rights holders and intermediaries to segment the Internet into different markets and charge different prices (or offer different services) to consumers depending on their location.

The use of geoblocking technology is pervasive, and frequently results in Australian consumers being offered a lower level of digital service (such as a more limited music or TV streaming catalogue) at a higher price than in overseas markets. Studies show Australian consumers systematically pay higher prices for professional software, music, games and e-books than consumers in comparable overseas markets.

The Australian Government should make clear that it is not an infringement of Australia’s copyright system for consumers to circumvent geoblocking technology and should avoid international obligations that would preclude such practices.