Our copyright laws must be strengthened

by Don Groves

New research by GfK Australia which shows the number of film and TV titles viewed legally surpassed those downloaded or shared illegally for the first time last year is a salutary reminder that online piracy is still an endemic problem.

That prompted me to seek out industry viewpoints on how Australia is meeting the challenge via changes to copyright law and other measures. The consensus: the introduction of a U.S.-style fair use regime, as recommended by the Australian Law Reform Commission (ALRC) and advocated by Google Australia out of naked self-interest, would be a disaster for content owners and consumers.

On the plus side, the web site blocking legislation introduced last year, as well as having the practical effect of taking down illegal sites when the Federal Court makes its first orders, is helping to make consumers even more aware that pirating is risky.

GfK’s study revealed Australians paid to watch 6.1 million titles in the last half of 2015, while 4.5 million titles were pirated. That is a marked improvement from the previous six months when the ratio was 5.9 million pirated/3.8 million paid. But it is clear millions of people still have no qualms about not paying for content they watch.

Creative Content Australia estimates 1.4 million Australians access The Pirate Bay each month and there were 36.4 million illegal downloads of George Miller’s Mad Max: Fury Road in 2015. Last year GfK’s research showed 53% of people who pirate content said they had stopped or reduced that activity due to anti-piracy measures including the site blocking legislation and the court case brought by the Dallas Buyers Club producers, who sought the contact details of Australians suspected of illegally downloading the title.

Under the U.S. doctrine, a use is deemed “fair” considering a series of tests including whether it is for commercial use or non-profit educational purposes, the nature of the copyrighted work and the effect of the use on the potential market for or value of the copyrighted work.

Experts warn that granting fair use exceptions in Australia would create a legal minefield in disputes over determining exceptions for copyright use and result in a high level of uncertainty in the transition from one set of laws to another. That uncertainty could last a long time and be very costly, according to Law and Economics Consulting Associates’ Dr George Barker.

The Productivity Commission’s draft report on the ALRC’s recommendations, released on April 29, predictably called for a “new, principles-based, fair use exception, to protect user rights without undermining the incentive to create.” The PC claimed, “’Surveys reveal much online copyright infringement is out of sheer frustration from poor access. The best antidote to copyright infringement is accessible and competitively priced online content, not draconian penalties and big brother enforcement.”

That flies in the face of how many other countries are protecting copyright and ignores the efforts of Australian film and home entertainment distributors, pay-TV and free-to-air broadcasters to release content quickly and affordably. The July 2 election following a double dissolution may well delay the government’s response to the report but some copyright industry figures are concerned.

Australian Copyright Council executive director Fiona Phillips says, “My sense is that fair use is very much in play under the Turnbull government. I do not think fair use will best serve the interests of either those seeking to earn a living from their creative content or those wanting to use it.”

Matthew Swinn, a partner at Melbourne law firm King & Wood Mallesons, has a different perspective from some of his peers, declaring, “A fair use defence should be adopted, in my view. The patchwork quilt of existing defences to infringement of copyright has contributed to the legislation swelling to ridiculous complexity. The Intellectual Property Committee of the Law Council of Australia has supported the ALRC’s proposal to introduce a broad fair use defence. It has been road-tested for decades in the U.S. and is likely to provide a workable and flexible regime.”

Phillips points out that there is no Bill of Rights in Australia, unlike the U.S. If fair use was adopted here she believes it would be less open for an Australian court to interpret the legislation as the U.S. courts have done. She warns there would be a prolonged period of uncertainty until Australia develops a body of law on fair use or industry agreements and guidelines are established. She regards the way some U.S. courts have applied fair use as breaches of international law. Besides, Australia already has specific exceptions and statutory licences that serve public policy objectives.

She advocates a suite of measures to increase copyright protection which will complement the web site blocking legislation, including increased public education, effective licensing models and other regulatory changes to ensure the copyright law stays current.

Village Roadshow along with the major U.S. studios and Foxtel were the first to apply to the Federal Court seeking orders for internet service providers (ISPs) to take down piracy sites. The Australian branches of Universal Music, Warner Music, Sony Music Entertainment and J Albert & Son Pty Ltd together with APRA and AMCOS also made an application.

The international evidence is irrefutable: blocking one illegal site directly causes a steep drop in traffic to other unlicensed sites. ISPs in 19 countries have been ordered to block access to nearly 500 websites. In the U.K., where courts have blocked a numerous torrent file-sharing sites including The Pirate Bay, Kickass Torrent and Isohunt, there was a 45% decline between 2012 and 2014 in visitors to all BitTorrent sites. In Italy there was a 25.6% drop in overall BitTorrent downloads between 2013 and 2015 following the blocking of 24 BitTorrent sites.

Moreover, a study released in February by Carnegie Mellon University academics, The Dual Impact of Movie Piracy on Box-Office Revenue: Cannibalization and Promotion, found that reducing piracy could increase theatrical revenues in the U.S. by 15%, or $US1.34 billion, per year. There is no reason to suppose Australian cinemas would not benefit similarly if there were tougher copyright protection and enforcement.

Allen’s partner Miriam Stiel says, “Web site blocking is not a ‘silver bullet’ but it is an important component of the broader legal and social solution required to tackle the problem of online copyright infringement.”

Matthew Swinn agrees: “Making it more difficult or tedious to access sites that facilitate piracy, whilst making legitimate content available in a timely fashion on convenient and affordable streaming services, is likely to lead users to prefer the authorised channels. I can access episodes of my favourite shows for the price of a cup of coffee using services that work straight out of the box with no configuration required. That’s an attractive proposition for most people.”

Dr Barker warns, “If there were to be a weakening of copyright law I think there would be a loss to Australia as a whole in creativity innovation, economic growth and employment across a wide range of industries. So there has to be a logical hope the law will be improved. But what will happen is a matter of politics and there are a number of special interests seeking to undermine such an outcome The problem is the main victim will be future consumers who will enjoy less creative output from inefficient copyright laws.”