Copyright and the Digital Economy

August, 2012


An issues paper was released by the Australian Law Reform Commission (ALRC) on 20 August 2012 about Copyright and the Digital Economy (Issues Paper).  In summary, the objective of the Issues Paper is to form a basis for consultation and to seek public submissions, responding to 55 questions raised by the ALRC, as to whether:

A key objective of the Issues Paper is to obtain information from the public so that the ALRC can assess whether, and to what extent, current Australian copyright law needs to be reformed so that (a) it provides sufficient incentive for investment in innovation and content, and (b) allows appropriate access to that content.

This is to enable the ALRC to respond to its terms of reference, which ask the ALRC to consider whether amendments to current Australian copyright law are required to create greater availability of copyright material in ways that will be socially and economically beneficial.

Historically, and as a general comment, copyright laws were primarily enacted to confer economic and legal rights in the creators of certain original works.  As the ALRC notes, with the increasing emergence of the digital economy, some users of copyright material, both domestically and internationally, are questioning the continuing application of the current protection afforded to the owners of original works that are the subject of copyright protection.  It will be interesting to see whether, and to what extent, the ALRC recommends changes to current Australian copyright law to facilitate greater access to the digital economy for private and business purposes.

The closing date for submissions is 16 November 2012.  The ALRC is scheduled to deliver its final report by 30 November 2013.

What are the key issues the ALRC seeks consultation on?

The following are the specific key issues the ALRC seeks consultation on:  caching, indexing, and other Internet functions; cloud computing; copying for private use; online use for social, private or domestic purposes; transformative use; libraries, archives and digitisation; orphan works; data and text mining; educational institutions; crown use of copyright material; re-transmission of free-to-air broadcasts; statutory licences in the digital environment; fair dealing exceptions; other free-use exceptions; fair use; and contracting out.

It is not possible in this article to discuss all of those specific key issues.  However, we do briefly discuss two areas that will, if they are the subject of reforms, have an impact on commercial transactions.

Caching, indexing and other Internet functions

As a general proposition, and as noted by the ALRC, it is well known that Internet service providers, search engines, web hosts and other Internet intermediaries rely on indexing and caching for their efficient operation.

However, as the ALRC notes, the Act only contains limited provisions permitting the copying or reproduction of copyright material for the purposes of caching or indexing – the key ones in the commercial context being:

(a)       to allow a temporary reproduction as part of the “technical process of making or receiving a communication”;[1] and

(b)       to allow a carriage service provider, on a system or network controlled or operated by it, to reproduce copyright material in response to an action by a user to facilitate efficient access to that material by that user or other users.[2]

The ALRC discusses legislative regimes in some overseas jurisdictions (such as the UK and Canada) that contain specific exceptions allowing the caching of copyright material for those who provide Internet-related services and Internet location tools.

In this context, and noting the more limited copyright regime in Australia, the ALRC calls for submissions responding to two key questions, namely:

(c)       what kinds of Internet-related functions (eg caching and indexing) are being impeded current Australian copyright law? and

(d)       should the Act be amended to provide for one or more exceptions for the use of copyright material for caching, indexing or other uses related to the functioning of the Internet?

Depending on the submissions received, and the response of the ALRC, it is possible that reforms to Australian copyright law could facilitate greater use of copyright material in the digital economy.

Cloud computing

Clearly, cloud computing is becoming an increasingly important component of commercial enterprise both domestically and internationally.  In general terms, “cloud computing” is the practice of using a network of remote servers hosted on the Internet (in the “cloud”) to store, manage, and process data, rather than a local server or a personal computer.

Cloud computing presents a number of legal challenges, including from an Australian copyright law perspective:

(a)       whether the storage by an individual or company of copyright material they have copied themselves on a remote server can expose the individual or company and/or the provider of the remote server to a claim for an infringement of copyright? and

(b)       whether, by reproducing or communicating copyright material originally uploaded to a remote server, the provider of the remote server is itself infringing copyright?

The ALRC notes that cloud computing represents a major development in the digital environment, but also notes that it raises a number of potential legal risks.  Unlike the questions asked in relation to the issue of indexing and caching, the ALRC calls for submissions in response to a broader question, namely, is Australian copyright law impeding the development or delivery of cloud computing services?  The broader scope of this question reflects the challenges currently being faced by the providers and users of cloud computing services.

Mills Oakley has dedicated Intellectual Property and Technology and Communications teams that can provide you with advice on copyright, and other issues, affecting the digital economy.

[1] Sections 43A and 111A of the Act.

[2] Section 116AB of the Act.

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