Productivity Commission Draft IP Report - the breakdown

As most of you will have heard by now (or read previously on our blog) the Productivity Commission released its draft report into Australia's Intellectual Property Arrangements late last month. They’ve also issued a series of nice infographics summarising their main findings (here’s the copyright one).

Since the draft report’s release, the Commission has been accepting public submissions on it, taking feedback on their proposed findings to help them prepare the final report. This week, the Commission has been holding a series of public hearings in the east coast capitals to hear directly from some of the 300+ stakeholders who have responded so far. You can see the ADA's submission here.

The copyright overview section and infographics are titled Copy(not)right - giving you an indicator of the direction of the Commission's recommendations in this area. The PC are supportive of copyright in general, but critical of the balance struck in Australian copyright law. And they recommend some pretty significant changes.

It is perhaps not surprising, then, that it is the copyright conclusions that have received the most media attention - there have been articles in favour (particularly of the recommendations relating to geoblocking) and articles opposed (especially regarding some of the statements around term). But in many of these, there seems to be confusion about what the PC actually said, and what it means for Australia. So in the interest of creating a cheat sheet for those not planning on reading the whole 600+ pages, we thought it worth doing a slightly longer blog post than usual, to summarise the major copyright recommendations.

Here, in all their glory, are the primary copyright findings and recommendations of the Productivity Commission's draft IP report, and some thoughts on them. Remember that these are just draft findings and recommendations at this stage - the final report isn’t due out til August.

First, the Commission does not recommend a reduction in the copyright term.

The discussion of copyright term is the part of the draft report that has probably created the greatest public furore, with publishers and authors being particularly vocal in their opposition to any reduction. But the thing is, the Commission didn’t actually recommend a change in term.

It did propose two formal findings on this issue - one saying that the current copyright term of life of the author plus 70 years is excessive and one saying that the economically optimal term of copyright would be closer to 15-25 years from creation. But neither of these are recommendations. That’s because, as they acknowledge in the body of the report, a whole swag of international treaties we've signed set minimum standards on term. So term reduction isn't an option for Australia. The Minister for Communications and the Arts has said it again in a press release, for all those who missed it in the report.

All in all, it's probably fair to say that the PC would favour a reduction in the copyright term, but it’s not fair to say it actually recommends a reduction. And either way, Australia's copyright term is not changing - it is simply impossible to unravel the relevant international treaty framework.


The Commission does find that copyright is weighted too heavily in favour of creators.

While there is no formal recommendation linked to this finding, it is important to note as a conclusion, as it underpins all of the other conclusions of the report and explains why the Commission's recommendations primarily relate to greater recognition of user rights.

Specifically, the draft report finds that “Australia’s copyright arrangements are weighed too heavily in favour of copyright owners, to the detriment of the long-term interests of both consumers and intermediate users.” In the PC’s opinion, all IP law should only target uses that are detrimental to copyright owners and would thus lead to a disincentive to create (ie free riding). But copyright doesn’t do this very well - as the Commission points out, “copyright is overly broad, provides the same levels of protection to commercial and non-commercial works; and protects works with very low levels of creative input, works that are no longer being supplied to the market, and works where ownership can no longer be identified.” All these add up to a law that prevents use for the sake of prevention; not because it will harm the interests of the creator.

To address this imbalance...

They recommend that we introduce fair use.

This is without doubt the key copyright recommendation of the draft report. It follows on from similar recommendations from the ALRC, the CLRC, JSCOT, Senate Select Committee on the Free Trade Agreement between Australia and the United States of America, and the House of Representatives Standing Committee on Infrastructure and Communications - ie 5 independent reports since 1998. So while this is the most important recommendation of the report, it is hardly a surprise. The arguments in favour of fair use in Australia have been set out many times; the PC just provides the latest perspective. But their commentary is important to the ongoing debate. Opponents of fair use often argue that it would be devastating for the Australian economy - it's nice to have the experts say this isn't true.

The ADA is in favour of fair use, and we've posted before about why we think it is necessary in Australia. But to summarise - fair use is the only way to create a copyright system that is responsive to new technologies and new uses, and recognises the rights of users alongside those of copyright owners. Our current copyright system applies strict and broad reaching principle-based rules to protect copyright material, and then relies on specific exceptions to allow particular uses for socially beneficial or practical reasons. The problem with this approach is that it means that even the smallest of adjustments in response to cultural/technological changes need to be legislated, and that can take an inordinately long time. Even the least controversial changes (like the extension of legal deposit to electronic materials that was passed in 2015) can sit for decades on a desk, trying to make its way onto legislators' priority lists. This is why it was illegal to tape TV until 2006, and is still illegal to forward an email, cache or datamine.

This reliance on specific exceptions means that Australia's copyright system is constantly playing catch up, with activities that happen thousands of times a day around the country left technically illegal because it's too hard to get legislation passed to allow them, and not worth the copyright owners’ time to license them. And while it may be ok for private individuals to just run the gauntlet and assume that no one will sue them for forwarding that email, it's not so easy for those industries that rely on using copyright material, like businesses, schools, universities, researchers, and libraries and archives. They're stuck with the laws we have in all their imperfection.

Fair use creates an escape valve for all this, making it legal to undertake any use that is ‘fair’, taking into account factors that include the impact on the copyright owner’s market. This is what puts it on the Commission's recommendation list - it adjusts the system to better target uses that harm copyright owners, just as they want.

The PC recommends the removal of parallel importation restrictions on books.

Authors and publishers have also been very concerned about this, and with reason. Not only is this a clear recommendation of the report, it is one that could actually happen, as the government said they support such a change last year. However, both Labor and the Greens, in the weeks since the draft report's release, have been a bit more circumspect, saying they'll consult before making a decision.

In the same vein, the Commission recommends we make it clear that circumventing geoblocks is legal.

This is the recommendation that first grabbed the public’s attention when the report was released, and was the focus of much of the initial media reports. But interestingly, it seems to have died away since in the public debate. That might be because it isn’t really recommending any changes to Australian law, just “clarification.” Even the Prime Minister’s own website says that copyright law does not prevent you from using a virtual private network (VPN) to get around geoblocking technology to access overseas content like the US version of Netflix. Though the Commission, and the House of Representatives Standing Committee on Infrastructure and Communications whose 2013 recommendation they are endorsing, are right that there is still some debate about what the actual legal position is. Clarification certainly wouldn’t hurt.

The PC say we should end perpetual copyright in unpublished works

This one is a no brainer that should have happened years ago. It's very hard to think of anyone who benefits from the fact that the Captain Cook diaries and Jane Austen letters held in the National Library are still in copyright. The current copyright term of the life of the author plus 70 years is more than enough protection for any work - published or not. And keeping unpublished works in perpetual copyright is out of line with the whole purpose of intellectual property law - to encourage both the creation of knowledge and its dissemination for the benefit of society.

This recommendation is, in fact, so non-controversial that it is already being proposed by the government. An exposure draft of the Copyright Amendment (Disability Access and Other Measures) Bill that would introduce this change (along with a host of others) was released late last year. If we can get it tabled and through parliament before the Commission releases its final report in August, it might be able to cut this recommendation entirely.

The Commission recommends that we should extend the existing ISP safe harbours to other online service providers

This should also be a no-brainer, as it's how other countries (like the US and Japan) apply their similar safe harbours. It has also been recommended for Australia several times before. But it's still argued against by a core group of objectors. This is another one we've written about previously. The strong objection in some quarters is particularly confusing because the safe harbours are supposed to be a mechanism that helps both creators and intermediaries - they provide a carrot to encourage intermediaries to work with creators to fight online copyright infringement.

It is unclear why there would be fierce objection to schools, universities and libraries having the same legal protection as commercial ISPs when someone uses their systems to infringe copyright. Really the objection seems to be that online service providers like Facebook and Youtube would also get that protection. But as these multinationals are already operating under the system in the US, where they are all based, the change isn’t so big for them. It would be nice to see Australian start ups like Redbubble and Envato get the same level of protection here at home.

Finally, they also said we should have open access to all government-funded research.

Although not in the copyright section of the draft report, this is very much part of the copyright recommendations. It follows a growing trend around the world to encourage greater access for members of the public to research that their taxes have paid for. To many this seems commonsensical - but it has been seen as a radical and dangerously disruptive move by many of the traditional academic publishers (who make a lot of money from providing access to this material via their own services).

Interestingly, the PC’s recommendation doesn’t seem to have raised an eyebrow, at least based on the lack of obvious pushback either in the media or in submissions to the Commission. Perhaps this is a sign that open access to publicly funded research is becoming widely accepted. Or perhaps it’s just that the main objectors are based outside Australia and so have yet to notice/weigh in on the PC’s recommendation. Either way, it would be great to see the government take this up as a otherwise uncontroversial recommendation. Though the rate of movement in government policies can be slow, so it would probably be at least a few years before we see the effects publicly.


The PC’s report contains a number of recommendations that aim to pull back some overly expansive elements of the Australian copyright system, to better target the protection of copyright owners’ interests without inhibiting innovation and harmless uses. Most of the recommendations have been made before - fair use, geoblocking, safe harbours, parallel importation - and/or relate to changes that are already on the government’s to do list - unpublished works, safe harbours and parallel importation (again).

What the PC adds to this conversation is an economic viewpoint focused on the big-picture costs and benefits for Australia - not just the impact on particular industries. Potential economic impacts are often raised in the copyright policy debates in Australia, but rarely with independent expert backing. So it is great to have this extra input - and it will be very interesting to see what the government does with it.


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