Bills Digest 160 1996-97 Copyright Amendment Bill 1997


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WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History

Copyright Amendment Bill 1997

Date Introduced: 18 June 1997
House: House of Representatives
Portfolio: Attorney-General
Commencement: Royal Assent

Purpose

The purpose of the Bill is to amend the Copyright Act 1968 (Principal Act), primarily to address the issues of moral rights for authors, artists and film directors and producers, and to modernise the existing provisions dealing with journalists' copyright, so as to recognise a publisher's right to provide on-line electronic access to copyright material and electronic publication.The Bill also modifies the law to remove an anomaly in the use of copyright on labels and printed material (which accompanies imported goods) as means of restricting the importation of the product itself.

Background

Moral Rights

The principles which underpin copyright are very old in time.Modern copyright statutes in the English legal system can be traced to the Statute of Anne of 1709.The censure of plagiarism can be traced back to the ancient Greek and Roman worlds.Copyright is a form of intellectual property along with patents, trade marks, designs, circuit layouts and plant breeder's rights.So important is the recognition of the need to protect intellectual property rights that it is included in the Universal Declaration of Human Rights, which at Article 27, paragraph 2, states:

Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

The primary international treaty which deals with copyright is the Berne Convention of 1886 (Berne Convention for the Protection of Literary and Artistic Works).Australia, as a sovereign nation, became a signatory to the Berne Convention in 1928. (1)In more recent years, Australia has become a signatory to the international TRIPS Agreement (Trade Related Aspects of Intellectual Property Rights) which formed part of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), and which was concluded in December 1993.

The Berne Convention has, for many years, included an Article (6 bis) which requires Member countries to protect the moral rights of its authors and artists.Simply stated, moral rights are those rights which an author or artist has in protecting the integrity of their creation from distortion, or a failure to attribute authorship.Moral rights are based 0n the principle that the created work is a reflection of the personality of the author or artist and the work should be respected as such.These rights are additional to the conventional understanding in this country that copyright is, basically, all about economic interests and the need to prevent the pirating of published works. (An interchangeable term in copyright discussions for economic rights is material rights)

Australia has a good international reputation for compliance with international agreements dealing with intellectual property rights.There are some gaps, however, and one of those is that Australia has not, in the past, fully addressed the issue of moral rights in terms of its Copyright legislation.Australia has only limited protection for moral rights.As a consequence, it has been possible in this country to allow a person or institution to buy, say, a work of art and to modify it or display it in a fashion which the artist would consider denigrates his or her reputation.A simple but extreme example is the acquisition of a sculpture which is then trimmed by the owner to allow it to fit into a particular display area.Clearly, the work has been diminished, even destroyed, but the tendency in this country is to consider the loss in value of the work of art rather than the potential loss of reputation of the artist.The Australian approach has, generally, been to regard the sculpture as the complete property of the purchaser who can do what they want with their own property.In Australia, the only effective way an artist can prevent such a distortion is to make the preservation of the work of art in its original form a condition of sale.The artist's moral rights are not automatically protected.European countries, and in more recent times the United Kingdom, have recognised that copyright has two clear dimensions, economic rights and moral rights.

Moral rights are an individual's right (i.e. the rights a natural person) and these rights are not available to a corporate entity which may own copyright material.

There is another view to the need for the implementation of a regime of moral rights for Australia.In 1988, the Copyright Law Review Committee issued a majority report recommending against the introduction of moral rights.The grounds identified by the Committee to support non-introduction included the following:

(a) there was insufficient support within Australia for Australia to enhance itscopyright law in this area;

(b) the theoretical basis for moral rights in a common law system had not been identified; and

(c) violation of moral rights in Australia were too infrequent to warrant legislative intervention.(2)

Journalists' Copyright

Broadly stated, an employed author is not entitled to copyright in his or her work (section 35(6) of the Copyright Act 1968), unless he or she has a contractual arrangement with the employer to reserve copyright ownership.There is a variation to this rule and it applies to employed journalists.Although a newspaper publisher who employs the journalist has the primary copyright in the article published in the newspaper, a journalist is entitled to copyright in any secondary use of the article, such as photocopying for press clipping services and independent book publishing.Journalists are entitled to receive periodic payments for the secondary use of their material.

Collection of royalties and fees for the use of copyright material is vested in a variety of non-government collection agencies, such as CAL (Copyright Agency Limited), which collect royalties and fees on behalf of members.

Two recent issues which have arisen in the area of journalists' copyright are the convergence of electronic technology which can convert printed work, which has initially been prepared in, say, hard copy form, to a form which allows on-line electronic access (theoretically, at least, a secondary use) as well as electronic publishing, and whether the newspaper proprietor should be entitled to collect all copyright revenues (e.g. as is the case in the United States and United Kingdom).Countries which allow the copyright revenue to be 'split' between the newspaper proprietor and the journalist include, Australia, New Zealand and Canada.Some other countries treat the journalist as author and accord the journalist full copyright.(3)

This Bill proposes to modernise the law to recognise that publishers are entitled to present their material in electronic form, and that journalists are entitled to maintain journalists' copyright in other examples of secondary use of their material, such as photocopying and independent book publishing.

Labelling and Packaging of Imported Goods: Some Other Unresolved Issues

Some importers of goods have been able to use the Copyright Act 1968 as a mechanism to provide with exclusive market access to those imported products simply because of an assertion of copyright which attaches to the label or the accompanying instructional material.It is believed that this practice occurs with imported liquor, toy, footwear and sunglasses.As noted in the Explanatory Memorandum (p. 8) to the Bill, the Copyright Law Review Committee reviewed the practice in 1988 and recommended that the anomaly be removed as not being an appropriate use of copyright law.

The Bill addresses this labelling matter but does not deal with the more topical issue of the restriction on parallel imports of CDs and computer software, where the product itself involves copyright in a more primary and direct sense.The Attorney-General said in his Second Reading speech to the Bill that the Government is reviewing the matter of parallel imports.

Another issue not addressed is the anomaly whereby the copyright in commissioned photographs becomes the property of the person who commissioned the work.There is no reservation of copyright for the photographer.A further topical matter which might have been addressed is the issue of retailers playing background music in their stores and their liability to pay licence fees to the collection agency, the Australasian Performing Right Association Limited (APRA). Constitutional Head of Power: History of Intellectual Property Laws

At federation in 1901, the Commonwealth Constitution included a head of power to enable the Commonwealth to pass laws with respect to ' Copyright, patents of inventions and designs, and trade marks'.The Commonwealth has plenary power to pass laws on intellectual property.

A more detailed summary of the history of intellectual property laws and key issues facing Australia can be found in the publication by the author of this Digest, New Ideas, Old Laws: Copyright, Patents, Trade Marks and Designs and How to Avoid Plagiarism, issued by the Department of the Parliamentary Library as Background Paper No. 12 of 1995-96.

A more detailed background to the issue of parallel imports and the price of CDs can be found in the publication by the author of this Digest, Copyright: APRA: Retailers face the Music, a Research Note issued by the Department of the Parliamentary Library in August 1996-97, and Copyright and Monopoly Profits: Books, Recordings and Software a Current Issues Brief by David Richardson issued by the Department of the Parliamentary Library in December 1996.

Main Provisions

Reader's Note:The proposed amendments are included in Schedules to the Bill.The terminology to be used therefore is "Item' in the Schedule in lieu of 'Clause' in the Bill. Schedule 1 Item 1 repeals the existing Part IX False Attribution of Authorship in the Copyright Act 1968 and replaces it with a new Part IX Moral rights of authors of literary, dramatic, musical or artistic works and directors and producers of cinematograph films.The existing Part IX of the Copyright Act 1968 has its limitations in that, while it protects authors and artists from false attribution of their work by another person, it does not empower the author with the positive right to require attribution.The existing Part IX does not prevent an author's name from being added to a work that he or she has not written.Furthermore, the existing Part IX does not extend to cinematograph films which are now a significant area of artistic creation and expression.An 'author' of a cinematograph film is its 'maker' which is defined in the proposed new Part IX to mean the principal director and principal producer.

The moral rights proposed in the new Part IX are additional to other rights recognised and protected under intellectual property law.The moral rights proposed by the Bill are, in broad terms:

(a) the right of attribution of authorship;

(b) the right not to have authorship of a work falsely attributed; and

(c) the right of integrity of authorship of a work (i.e. the right to maintain the integrity of the work and not to have the work subjected to derogatory treatment).

The length of time applicable to the moral rights is the same as subsists in the basic copyright period attaching to the material.For a newly published printed work this is 50 years plus the life of the author.For photographs, sound recordings, cinematograph films and television the period is, as a general statement, 50 years after publication or broadcast.

The definitions of what constitutes derogatory treatment for the purposes of determining whether there has an been an infringement of moral rights are found at proposed new sections 195AI, 195AJ and 195AK in Schedule 1.

A breach of moral rights does not attract a statutory penalty.Remedies are found in civil actions which may give rise to an injunction, an apology, a declaration that a moral right has been infringed, a order for removal of false attribution, or damages for loss arising from the infringement (see proposed new section 195AZ).

Moral rights can be waived by the author, or made subject to an express consent by an author to a particular act of omission.It is not an infringement of moral rights if what otherwise may have been derogatory treatment was reasonable in the circumstances (see proposed new section 195AR). Schedule 2 Item 1 in Schedule 2 proposes reform of existing section 35 of the Copyright Act 1968 to address the issue of employed journalists' copyright.The primary thrust of the proposed amendments is to recognise that new electronic technology has given publishers of newspapers, magazines and similar periodicals more flexibility in how they publish.The industry has moved rapidly into the use of electronic transmission and on-line access.

The proposed amendments accord the publisher the right to electronic publication and the right to restrain photocopying of more than 15% of an issue of a newspaper, magazine or similar periodical.The proposed amendments retain the journalists' copyright in subsequent photocopies of their articles and for independent book publishing of their articles.

There are alternatives to this approach and that is to allow proprietors to have all copyright in the work of employed journalists but with an exception for those occasions where the proprietor on-sells an article to another publisher.In the United States, employed journalists are sometimes employed under an arrangement which allows them 50% of the copyright revenue from their employer's sale of their work.This approach, if pursued in Australia, may precipitate industrial action unless there was some accompanying adjustment to the basic remuneration of journalists.

Schedule 3

The reason for the proposed amendments contained in Schedule 3 is identified in the Explanatory Memorandum (page 33) to the Bill by reference to the Bailey's Irish Cream case (Bailey v Boccaccio and Bailey v Pacific Wine Company Ltd(4)).Bailey's Original Irish Cream is a liqueur manufactured in Ireland.It is marketed in a distinctive bottle with a distinctive label.The Bailey company of Ireland had distribution agreements with an Australian company, Swift & Moore Pty Ltd.Competitors to Swift and More imported Bailey's Irish Cream from the Netherlands at a lower cost to Swift and Moore.Under existing copyright law, Swift and Moore was able to assert copyright in the label, as the approved distributor for the Bailey company in Australia.The effect was to restrict the right to import the whole product.

The proposed amendments will allow the importation of such products by competitors if it can be shown that the overseas manufacturer has already consented to the use of the label or attached instructional documentation.In other words, if the label or instructional material has already been approved by the manufacturer as an accessory to the product (say, for use in another country), then the importation into Australia of the product itself should not be stopped.The issue is that the force of copyright law was never really meant to apply to the contents of the bottle of liqueur which is really the subject of the importation.

Item 2 in the Schedule provides a definition of what constitutes an 'accessory' to the product (e.g. a label, packaging, instructions, warranty or demonstration film).

As noted above, the removal of this anomaly does not extend to the matter of restrictions on the parallel importation of products (such as music CDs and computer software) where the very product itself is the subject of intellectual property rights, such as copyright. Schedule 4

The Schedule contains proposed amendments which modify the effect of the conversion and detention remedies available to the owners of copyright material.Under the present law, a copyright owner may seek orders from the court to seize the entirety of item (e.g. a whole book) which may contain only a small number of pages which infringe copyright.Clearly, the remedy can be 'unfair' in that the value of the item seized may be disproportionate to the commercial value of the infringed copyright.The proposed amendments allow the Court to exercise its discretion in relation to the remedies sought.

In technical language, the infringing copy is called a 'plate' and owes its origins to the printing industry.Items 1 and 3 in the Schedule proposes the modernising and broadening of the term to 'device', which still includes a 'plate'.

Schedule 5

This Schedule streamlines the procedures for payment by Governments of remuneration to copyright owners where the Government (Commonwealth, State or Territory) utilises copyright material for the services of Government.Although it is good practice for Governments to obtain the permission of the copyright owner and, if necessary, negotiate copyright payments before using the copyright owner's work, Governments can utilise the work for the services of government and then settle permission and payments after the event (see section 183 of the Copyright Act 1968).It is suggested that, in the public interest, Governments may need to publish reports which contain copyright material but in circumstances (e.g. security, defence or combating crime) where an obligation to obtain prior permission of the author is counterproductive to the public interest.

Under the existing law, the method for calculation of payments is an assessment by way of full record keeping.The proposed amendments utilise a sampling method similar to that used by non-government collection societies, where there is a declared copyright collecting society which performs the function of collection and distribution of copyright revenues to copyright owners.Similar to the existing law, the Copyright Tribunal will be the forum to hear matters concerning a determination of the terms of negotiation between the parties involved.The Copyright Tribunal will also declare the relevant collecting society.

Item 2 in the Schedule inserts proposed new sections 153E to 153K to implement the new streamlined procedures.Also, see Items 4 and 5 which introduce proposed new sections 182B and 182C, and 183A to 183E, respectively, to modernise the procedure.Proposed new section 183D requires declared collecting societies to furnish annual reports and audited accounts to the Commonwealth Attorney-General.These reports must be then tabled in Parliament.

Schedule 6

The proposed amendments contained in Schedule 6 modernise the terminology used in the Copyright Act 1968 to remove such expressions as 'intellectually handicapped person' and 'handicapped readers' and to replace those expressions with terms such as 'person with a disability'.The Copyright Act 1968 already recognises that it is not an infringement of copyright if a licensed person makes a sound broadcast or adaptation of a literary or dramatic work for the benefit of persons with a disability (see section 47A of the Copyright Act 1968).The proposed amendments also have the effect of removing any differentiation between the range of materials available, and the purpose for which those materials are used, to persons who need assistance, irrespective of the form of disability (see for example Items 31 and 32).

Items 4 and 5 in the Schedule are worth noting because they extend the definition of institution assisting persons with a disability to include for-profit organisations, which were previously excluded.

Under the existing law, licensed institutions which make reproductions for the benefit of persons with a disability are required to destroy the copy within 3 months after the date on which it was made.The proposed amendments remove that obligation, provided the copy is still required to assist persons with a disability and provided the institution has given notice to a collecting society.Commercial exploitation of this exemption is an infringement under section 38 of the Copyright Act 1968 (see Item 37).

Schedule 7

This Schedule contains proposed amendments to Part VA Copying of Broadcasts by Educational and Other Institutions and Part VB Copying of Works etc by Educational and Other Institutions.Essentially, these Parts of the Copyright Act 1968 recognise and give statutory force to the licensing arrangements agreed upon between copyright owners and users.The Parts also provide a statutory right for copying of audio visual broadcast material by educational institutions and institutions which assist persons with a disability.(5)

The Copyright Tribunal plays an important role in these matters in arbitrating and settling disputes between the parties.The proposed amendments provide more flexibility in recognising that either of the parties (i.e. copyright collection agency or the body administering an institution) may wish to apply, after 12 months, for a new determination on the amount of payable in relation to the use of the copyright material (see Items 3, 10 and 12).

A further flexibility is the introduction of the right of a collection agency to send a follow-up demand when an amount is not paid by an institution (see, for example, Item 7 which repeals existing subsection 135N(2)).Under the present law this may have been construed as issuing more than one remuneration notice within a 12 month period, which was expressly prohibited by existing subsection 135N(2).

Schedule 8

This Schedule provides proposed amendments which will allow the expansion of the membership of the Copyright Tribunal to enhance the access by parties to the Tribunal, and to improve the operation of the Tribunal.Provision is made for the appointment of one or more additional Deputy Presidents (see, for example Items 1, 2, 6 and 9).

Digest Comment: It is agreed that the workload of the Copyright Tribunal depends upon the volume of applications.The Explanatory Memorandum to the Bill at page 3 appears to indicate that any increase in public expenditure caused by additional appointments to the Tribunal will be minimal and will depend on applications being made to the Copyright Tribunal.

Schedule 9

This Schedule contains a range of proposed minor amendments which recognise, amongst other technical changes, a change in nomenclature in Australian Customs (e.g. Chief Executive Officer of Customs in lieu of Comptroller-General).Customs plays an important role in the seizure of imports which infringe copyright. Schedule 10

This Schedule contains amendments which broaden the definition of educational institutions (which reproduce copyright works) beyond the mainstream schools and universities to include pre-schools, kindergartens (Item 1), and for-profit educational institutions (see Item 3).Collection Societies may apply to the Copyright Tribunal for review of a declaration that a particular institution is an educational institution (see Item 7).

Schedule 11 This Schedule contains a number of minor technical and consequential amendments, particularly the inclusion of references to the Broadcasting Services Act 1992, which is a significant piece of legislation enacted after the Copyright Act 1968.

Item 38 in the Schedule is of interest in that it enables a party to an application before the Copyright Tribunal to request that the Tribunal be constituted by more than one Member.The existing subsection 146(2) provides that the Tribunal shall be constituted by a single Member.

Concluding Comments

The Bill contains long-awaited and commendable modifications to the Copyright Act 1968.It is a little disappointing for some that it does not deal with the issue of the restriction on parallel imports of CDs and computer software.As noted above, the Attorney-General has stated in his Second Reading speech that the issue of parallel imports is still under review.Other reforms which could have been addressed are the issue of retailers playing background music, and the anomaly surrounding the copyright of commissioned photographs.

The proposed inclusion of an enhanced system of moral rights in Australian copyright law is, however, a very significant reform in itself.

The Explanatory Memorandum to the Bill is exceptional in terms of its clarity and the care in which it explains difficult concepts.

Endnotes

  1. Drawn from S. Ricketson, The Law of Intellectual Property, The Law Book Company, Sydney, 1984.
  2. See outline in the Discussion Paper, Proposed Moral Rights Legislation for Copyright Creators
  3. Attorney-General's Department, Canberra, June 1996: 5 6.
  4. See Report on Journalists' Copyright, Copyright Law Review Committee, Canberra, 1994.
  5. (1987-88) 77 ALR 177.
  6. Drawn from J. McKeough, Blackeney & McKeough Intellectual Property, 2nd Ed., The Law Boo
  7. Company Limited, Sydney, 1992: 115-116,

Contact Officer and Copyright Details

Brendan Bailey
28 June 1997
Bills Digest Service
Information and Research Services

This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

IRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 1997

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1997.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 15 July 1997


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