Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I table two supplementary explanatory memoranda relating to the government amendments to be moved to the Copyright Amendment Bill 2006. The memoranda was circulated in the chamber on 28 and 30 November 2006. I seek leave to move the following government amendments together: (1) to (19) on sheet ZA204, (1) to (9), (11) to (35), and (37) to (63) on sheet QE275. Whilst they relate to different areas, I believe we can have a cognate debate and deal with them as package, and it could make matters easier.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Labor wants amendment (21) on sheet QE275 put separately. So (1) to (19) on sheet ZA204, (1) to (9), (11) to (35), with the exception of (21), and (37) to (63) on sheet QE275 could be moved together. We want to express a different view in respect of (21).

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I have been advised that they can be moved together and we can divide the questions in the way you have described, Senator Ludwig.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Thank you.

Leave granted.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I move the following amendments on sheet ZA204:

(1)    Schedule 1, item 6, page 18 (line 17), omit “offences”, substitute “offence”.

(2)    Schedule 1, item 6, page 18 (line 28) to page 19 (line 3), omit subsection 132AI(8).

(3)    Schedule 1, item 6, page 19 (line 4), omit “Subsections (7) and (8) are offences”, substitute “Subsection (7) is an offence”.

(4)    Schedule 1, item 6, page 27 (line 1), omit subparagraph 132AO(5)(a)(i).

(5)    Schedule 1, item 8, page 36 (lines 20 to 23), omit subsection 133B(1), substitute:

        (1)    The regulations may make provision enabling a person who is alleged to have committed an offence of strict liability against this Division to do both of the following as an alternative to prosecution:

             (a)    pay a penalty to the Commonwealth;

             (b)    forfeit to the Commonwealth:

                   (i)    each article (if any) that is alleged to be an infringing copy of a work or other subject-matter and that is alleged to have been involved in the commission of the offence; and

                  (ii)    each device (if any) that is alleged to have been made to be used for making an infringing copy of a work or other subject-matter and that is alleged to have been involved in the commission of the offence.

                   (i)    each article (if any) that is alleged to be an infringing copy of a work or other subject-matter and that is alleged to have been involved in the commission of the offence; and

                  (ii)    each device (if any) that is alleged to have been made to be used for making an infringing copy of a work or other subject-matter and that is alleged to have been involved in the commission of the offence.

Note:   Regulations made for this purpose will make provision to the effect that a prosecution of an alleged offender will be avoided if the alleged offender both pays a penalty to the Commonwealth and forfeits to the Commonwealth all relevant articles and devices (if any).

Note:   Subsection 10(1) defines broadcast as a communication to the public delivered by a broadcasting service within the meaning of the Broadcasting Services Act 1992.

(1)    The Minister must cause to be carried out by the end of 31 March 2008 a review of the operation of sections 47J and 110AA of the Copyright Act 1968.

Note:   Those sections are inserted in that Act by this Part.

(2)    The Minister must cause a copy of the report of the review to be laid before each House of the Parliament within 15 sitting days of that House after the report is completed.

                   (i)    is given by a teacher; and

                  (ii)    is not given for profit; and

                   (i)    is given by a teacher; and

                  (ii)    is not given for profit; and

Note:     The heading to section 28 is altered by inserting “and communication” after “Performance”.

I also move the following amendments on sheet QE275:

record means a disc, tape, paper or other device in which sounds are embodied.

private and domestic use means private and domestic use on or off domestic premises.

109A Copying sound recordings for private and domestic use

                   (i)    is a device that can be used to cause sound recordings to be heard; and

                  (ii)    he or she owns; and

Note:   If the earlier or later copy is dealt with as described in subsection (3), then copyright may be infringed not only by the making of the later copy but also by a dealing with the later copy.

41A Fair dealing for purpose of parody or satire

103AA Fair dealing for purpose of parody or satire

Cost recovery not commercial advantage or profit

51B Making preservation copies of significant works in key cultural institutions’ collections

                   (i)    has, under a law of the Commonwealth or a State or Territory, the function of developing and maintaining the collection; or

                  (ii)    is prescribed by the regulations for the purposes of this subparagraph; and

110BA Making preservation copies of significant recordings and films in key cultural institutions’ collections

                   (i)    has, under a law of the Commonwealth or a State or Territory, the function of developing and maintaining the collection; or

                  (ii)    is prescribed by the regulations for the purposes of this subparagraph; and

112AA Making preservation copies of significant published editions in key cultural institutions’ collections

                   (i)    has, under a law of the Commonwealth or a State or Territory, the function of developing and maintaining the collection; or

                  (ii)    is prescribed by the regulations for the purposes of this subparagraph; and

200AAA Proxy web caching by educational institutions

                   (i)    temporary electronic reproductions of works made available online through the system to users of the system in response to action by the users; and

                  (ii)    temporary electronic copies of other subject-matter made available online through the system to users of the system in response to action by the users; and

system includes network.

broadcaster means a person licensed under the Broadcasting Services Act 1992 to provide a broadcasting service (as defined in that Act) by which an encoded broadcast is delivered.

licensor means a body corporate for which both the following conditions are met:

                   (i)    entitles any owner of copyright, or any owner of copyright of a specified kind, to become a member of the body; and

                  (ii)    requires the body to protect the interests of its members connected with copyright; and

                 (iii)    provides that the main business of the body is granting licences; and

                 (iv)    requires the body to distribute to its members the proceeds (after deduction of the body’s administrative expenses) from payments to the body for licences; and

                  (v)    prevents the body from paying dividends.

157A Tribunal must have regard to ACCC guidelines on request

Part 4—Records notices

Copyright Act 1968

Note 1:             The following heading to subsection 135K(1) is inserted “If records notice is given”.

Note 2:             The following heading to subsection 135K(3) is inserted “If sampling notice is given”.

(1)    The amendment of section 135K of the Copyright Act 1968 made by this Part applies in relation to a records notice given on or after the commencement of the amendment.

(2)    The amendment also applies in relation to a records notice given by or on behalf of an administering body before that commencement, if the body and the collecting society make an agreement determining a matter described in subsection 135K(2A) of the Copyright Act 1968. In that case, the amendment applies at and after the time the agreement comes into force.

Note:   While the amendment does not apply, section 135K of the Copyright Act 1968, as in force before the commencement of the amendment, applies.

(3)    In this item:

Note 1:             The following heading to subsection 135ZX(1) is inserted “If records notice is given”.

Note 2:             The following heading to subsection 135ZX(3) is inserted “If sampling notice is given”.

Note 3:             The following heading to subsection 135ZX(4) is inserted “Regulations relevant to records notices and sampling notices”.

(1)    The amendment of section 135ZX of the Copyright Act 1968 made by this Part applies in relation to a records notice given on or after the commencement of the amendment.

(2)    The amendment also applies in relation to a records notice given by or on behalf of an administering body before that commencement, if the body and the relevant collecting society make an agreement determining a matter described in subsection 135ZX(2A) of the Copyright Act 1968. In that case, the amendment applies at and after the time the agreement comes into force.

Note:   While the amendment does not apply, section 135ZX of the Copyright Act 1968, as in force before the commencement of the amendment, applies.

(3)    In this item:

153BAA Application to the Tribunal under subsection 135K(2A)

administering body has the same meaning as in Part VA.

collecting society has the same meaning as in Part VA.

153DB Application to the Tribunal under subsection 135ZX(2A)

administering body has the same meaning as in Part VB.

relevant collecting society has the same meaning as in Part VB.

                (iia)    relates to elements of the original program that will not be readily available to the person when the circumvention occurs; and

                (iia)    relates to elements of the original program that will not be readily available to the person doing the act when the circumvention occurs; and

                (iia)    relates to elements of the original program that will not be readily available to the person doing the act when the circumvention occurs; and

                (iia)    relates to elements of the original program that will not be readily available to the person when the circumvention occurs; and

                (iia)    relates to elements of the original program that will not be readily available to the person doing the act when the circumvention occurs; and

                (iia)    relates to elements of the original program that will not be readily available to the person doing the act when the circumvention occurs; and

Firstly, I will deal with amendments (1) to (7) on sheet QE275. These amendments remove five of the strict liability offences from the bill. Namely, possessing a device to be used for copying a work or other subject matter where the copy will be an infringing copy—subsection 132AL(9); causing a literary, dramatic or musical work to be performed in public at a place of public entertainment where the performance infringes copyright and the work—subsection 132AN(5); making a direct recording of a performance during the protection period of the performance and without the authority of the performer—subsection 248PA(5); possessing a plate or recording equipment to be used for making an unauthorised recording of a performance or a copy of an unauthorised recording where the possession occurs during the protection period of the performance—subsection 248PE(6); and possessing a plate or recording equipment to be used for making an unauthorised recording of a performance—subsection 248QB(6).

These amendments are in response to a recommendation of the Senate Standing Committee on Legal and Constitutional Affairs that the strict liability offences in the bill be re-examined for amendment to reduce the possible widespread impact of their application on the legitimate activities of ordinary Australians and businesses. The government has decided to remove these five strict liability offences because they could arguably capture some legitimate activities of individuals and businesses and thereby extend criminal liability more widely than intended. The removal of these offences was a more feasible and sensible course of action than introducing a defence. The removal of these strict liability offences does not affect the equivalent fault based indictable or summary offences. Law enforcement officers and prosecutors will be able to rely on these offences which have higher penalties, and this will deter genuine copyright pirates.

The strict liability offences that are retained in the bill will not operate adversely against ordinary Australians and legitimate businesses. They will be a vital part of a strong and effective copyright enforcement regime and will act as a deterrent to copyright piracy.

I also refer to amendments (1) and (3) on sheet ZA204. These are consequential amendments to the bill that are required because of the amendments that I have just referred to that remove five of the strict liability offences. That is the first group of that package of amendments.

Amendments (2), (4), (6), (8), (10), (12), (14) and (16) on sheet ZA204 remove an additional eight strict liability offences from the bill. They are as follows. Amendment (2): distributing an infringing copy of a work or other subject matter where the extent of the distribution affects prejudicially the owner of the copyright—subsection 132AI(8); amendment (4): causing a sound recording to be heard in public at a place of public entertainment where it infringes copyright in the recording or film—subsection 132AO(5)(a)(i); amendment (6): communicating a performance to the public during the 20-year protection period of the performance without the authority of the performer—subsection 248PC(5); amendment (8): causing a recording of a performance to be heard or seen in public during the 20-year protection period of the performance—subsection 248PD(5); amendment (10): distributing an unauthorised recording of a performance during the protection period of the performance where it will affect prejudicially the financial interests of the performer in the performance—subsection 248PJ(8); amendment (12): possession of an unauthorised recording of a performance in preparation for or in the course of distributing the recording to an extent that will affect prejudicially the financial interests of the performer in the performance—subsection 248PK(5)(a)(iv); amendment (14): distributing an unauthorised sound recording of a performance during the 50-year protection period where it will affect prejudicially the financial interests of the performer in the performance—subsection 248QE(8); and amendment (16): possessing an unauthorised sound recording of a performance during the 50-year protection period in preparation for or in the course of distributing the recording to an extent that it will affect prejudicially the financial interests of the performer in the performance—subsection 248QF(5)(a)(iv).

These amendments are in response to a recommendation of the Senate Standing Committee on Legal and Constitutional Affairs and further stakeholder representations that strict liability offences in the bill should be amended to reduce the possible widespread impact of their application on the reasonable activities of ordinary Australians and businesses. The government has decided to add these to the list of strict liability offences to be removed to allay concerns that they would extend criminal liability more widely than intended. The removal of these strict liability offences does not affect the equivalent fault based indictable or summary offences. Law enforcement officers and prosecutors will be able to rely on these offences, which have higher penalties and which would, of course, deter copyright pirates. The strict liability offences that are retained in the bill will not operate adversely against ordinary Australians and legitimate businesses. As I said earlier, they will be a vital part of a strong and effective copyright enforcement regime and will, of course, act as a deterrent to copyright piracy.

I now refer to amendments (1), (3), (7), (9), (11), (13) and (15) on sheet ZA204. These are consequential to the amendments that I have just outlined and are much in the fashion that I described the earlier batch of amendments. They are required as a consequence of the amendments that I have previously spoken to.

I now refer to amendment (5) on sheet ZA204, which deals with infringement notices. This amends new subsection 133B, inserted by the bill, to provide that a recipient of an infringement notice will be required to do two things as an alternative to prosecution for an alleged strict liability offence. First, they will be required to pay the infringement notice penalty. One infringement notice penalty equals 12 penalty points, which is $1,320. Second, they will be required to forfeit infringing copies made or other devices that have been made to be used for making infringing copies as part of the alleged commission of the offence. This amendment will encourage an infringement notice recipient to cooperate with police by divesting themselves of material that they could use for further criminal activity.

I now refer to amendment (8) on sheet QE275. This amendment amends the bill to insert a new subparagraph 54(1A) to provide a localised definition of ‘record’ for division 6, part III, of the Copyright Act. The amendment retains the existing definition of ‘record’ in the act for that part. This amendment is necessary because the new definition of ‘record’ inserted by schedule 3 of the bill includes references to ‘electronic file’. Using this definition in division 6, part III, would have the unintended effect of extending the operation of the statutory licence for recording all musical works—for example, digital downloads and ringtone sales. The amendment ensures that the bill makes no change to the existing operation of division 6, part III.

I now refer to amendment (9) on sheet QE275. This relates to private and domestic use. This amends the bill to add a new definition of ‘private and domestic use’ in subsection 10(1) of the act. This amendment is in response to Senate committee recommendation 4. The bill adds new copyright exceptions that permit the recording or copying of copyright material for private and domestic use in some circumstances. This amendment makes it clear that private and domestic use can occur outside a person’s home as well as inside. The amendment ensures that it is clear that, for example, a person who under new section 109A copies music to an iPod can listen to that music in a public place or on public transport.

I refer to amendment (11) on sheet QE275. This amends item 1 of schedule 6 in the bill. It inserts paragraphs (e) and (f) in new subsection 11(3). This subsection contains a number of restrictions preventing sales and other dealings with an article or thing embodying a film or sound recording of a broadcast. Paragraph (e) also prohibits causing a recording made of a broadcast to be performed in public, while paragraph (f) prohibits the broadcasting of a recording made under subsection 111. This amendment prevents potential misuse of subsection 111 in conjunction with compulsory licences that allow the public performance and broadcasting of sound recordings.

I refer to amendment (17) on sheet ZA204. This relates to time shifting. This amends item 1 of schedule 6 in the bill. This amendment substitutes a new section 111(1), which removes the requirement that a recording of a broadcast under section 111 must be made in domestic premises. This amendment provides greater flexibility in the conditions that apply to time-shift recording. The development of digital technologies is likely to result in increasing use of personal consumer devices and other means which enable individuals to record television and radio broadcasts on or off domestic premises. The revised wording of section 111 by this amendment enables an individual to record broadcasts as well as view and listen to the recording outside their homes as well as inside for private and domestic use.

I refer to amendment (18) on sheet ZA204. This inserts a new item 9AA at the end of part 2 of schedule 6 of the bill. The effect of this amendment is to require the review of the operation of new section 47J and section 110AA be carried out by the end of March 2008. It also requires the report of the review to be subsequently tabled in each house of parliament within 15 sitting days after the report is completed. So that provides some rigour, if you like, to the report being concluded and tabled. This review will enable consideration to be given to whether these new copyright exceptions should be expanded with respect to digital audiovisual material in a way which complies with our international treaty obligations. This review will consider how to achieve an appropriate balance between the legitimate interests of rights holders and users of copyright material.

I refer now to amendment (12) on sheet QE275. This deals with format shifting. This amends item 8 of schedule 6 of the bill by omitting the proposed section 109A and substituting a new section 109A. The amendments will better recognise and render legitimate the ordinary use by consumers of digital musical players such as iPods and MP3 players. In particular, new section 109A responds to concerns that, as originally introduced, this provision was too restrictive. This amendment responds to recommendation 5 of the Senate committee. New section 109A permits the owner of a copy of a sound recording to make another copy for private and domestic use. The new exception will allow the owner of a sound recording to make copies for the purpose of using a playing device that he or she owns.

The new section 109 lists the conditions necessary for the new provision to operate. It requires that the sole purpose of making a copy must be the owner’s private and domestic use with a device that can cause sound recordings to be heard and is owned by the owner of the earlier copy. The term ‘device’ envisages that a copy might be stored in the memory of a personal computer or portable playing device or that a copy might be embodied in a physical article such as a compact disc or storage medium. Copying may also occur sequentially. The revised drafting approach will allow for digital playing devices such as the Apple iPod to function where more than one copy of a sound recording is maintained in the device and a personal computer. This of course responds to rapidly changing technology. These amendments demonstrate that the government has listened carefully to comments by the stakeholders on the exposure draft to ensure the bill achieves the government’s objectives. There are other amendments on which I will comment further shortly. (Time expired)

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Is everyone clear on that series of amendments?

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

Clear as mud.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

The Australian Greens oppose this legislation. We want an Australia with a diverse and productive use of information and cultural generation. We support a balanced regulation of copyright, one which protects the capacity of owners and, in particular, producers of intellectual property and cultural products to benefit, but also where users and consumers have a right to fair use. Copyright law in Australia is currently unbalanced, and this will not be addressed by the Copyright Amendment Bill 2006. Indeed, it will be made worse. This bill, as we all know, is the result of the commitments made by the Australian government as part of the US free trade agreement. Allan Fels, the former head of the ACCC, and Fred Brenchley, the former editor of the Australian Financial Review, described the process this way:

Australia is obliged to change its Copyright Act to accommodate stricter controls on technology prevention measures (TPMs), which circumvent copyright required under the US free-trade agreement (USFTA). But Cabinet is using this window to roll in a host of other changes. The result, however, is a shocker for ordinary consumers, who do not deserve to be treated like the real criminals, the copyright pirates.

So the free trade agreement with the United States has meant that the worst aspects of the American copyright system are being imported into Australian law with none of the consumer safeguards such as open-ended fair use rights that exist in the United States. The Greens opposed the free trade agreement with the US and the legislation that implemented it, and today we oppose this legislation also.

Like many in the community, we warned that the free trade agreement with the US would lead to further erosion of the rights of ordinary users in relation to copyright issues. This bill is further evidence of what we were saying then. Peter Moon, a Melbourne IT lawyer, was spot-on when he said in Tuesday’s Australian Financial Review that the bill is ‘an Australian-US love child spawned by the free trade agreement’. Big users of copyright have got everything they want and more, and the users and consumers are faced with a big stick whenever they step outside the narrow and restrictive framework set by copyright owners. This bill will introduce new rights of time shifting and format shifting of various media, but those rights are so narrowly conceived that they allow the criminalisation of many common practices that are even allowed under the US laws.

Whilst the government has just moved to remove some of the worst aspects of this bill—the criminalisation of everyday practices through the strict liability for some offences such as recording a concert on your mobile phone—the essential problems remain. The target and the enormous effect of the bill can be summed up in this excerpt from a submission to the Senate inquiry by the Australian Federation Against Copyright Theft. The federation represent big owners of copyright—in particular, the media and movie moguls of the US, such as Rupert Murdoch. In their submission they said:

The reality is more than 1/5 of Australians are currently involved in the types of infringing behaviour the Government expressly intends and needs to deter. This means ordinary everyday Australians from all walks of life and of varying ages. Ordinary people who make illegal copies of film and television programs for work colleagues and friends. Doctors, lawyers, factory workers, mothers, students using ordinary equipment engaged in pirate movie uploading, copying, swap clubs ...

These are not appropriate or acceptable ‘consumer’ or ‘small business’ behaviours but they are growing rapidly.

In other words 20 per cent of Australians are threatened by the penalties that are put forward in this legislation. They are not copying material to mass-produce or sell on the black market. They are doing what people have done for thousands of years: enthusiastically sharing knowledge, stories, music and artistic creation. The movie moguls may hate it but it is the way that life is. People cooperate and share ideas. That is what makes us human. This bill seeks to quash that capacity in this area.

As Fels and Benchley pointed out in the Australian Financial Review:

Copyright is an intangible. Complying with it in the digital age with its host of new technologies will require widespread public acceptance. Draconian personal fines and laughable restrictions are not the way to achieve it.

Once again we have the alleged needs of big business, in particular US media corporations, triumphing over common sense. This is why the proposed changes have been almost universally condemned and that the amendments the government claims address these concerns do little to change the substantive problems. The government should understand the modern world of digital media, but the recent changes to media laws and the failure to get a handle on the broadband needs of the country suggest that they do not. The government should listen to the concerns of the community and to industry users, who are saying clearly that they do not want to go down this path. In the Age this week Mark Pearce wrote:

These laws must be junked. We need to start afresh. There are more media technologies coming down the pipeline every day. Each one will present new threats, and new opportunities. If we overreact, in response to a bogus threat, we’ll box ourselves in and consign Australia to second-rate status in the global creative economy.

He is absolutely right. This bill should be scrapped. The Greens will not be supporting this bill and hope that others in the Senate will do likewise.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I will just continue with the amendments that I am moving and I refer to sheet QE275, amendments (13), (14) and (19), dealing with parody and satire. These amendments remove the new exception for parody and satire from the proposed new section 200AB in the Copyright Amendment Bill 2006 and instead create new exceptions for parody and satire in provisions of parts 3 and 4 of the act, which already provide for fair dealings. The amended parody and satire exceptions will apply where a person or organisation can demonstrate that the use for the purpose of parody or satire is a fair dealing. Amendment (13) amends schedule 6 of the bill by inserting new items 9A and 9B. These insert into the act new exceptions for fair dealings with works into a proposed new section 41A and fair dealings with audiovisual items of a proposed new section 103AA for the purposes of parody or satire.

These exceptions are consistent with the present structure of the act, which already contains fair dealing exceptions for criticism and review and reporting of the news. Case law suggests that use of copyright material for parody and satire is likely to overlap or be closely connected to uses for these other fair dealing purposes. It is appropriate to require that a use for the purpose of parody satire should be fair. Parody by its nature is likely to involve holding up a creator or performance to scorn or ridicule. Satire does not involve such direct comment on the original material, but in using material for a general point it should also not be unfair in its effects on the copyright owner. Amendment (14) amends item 10 of schedule 6 of the bill by substituting ‘(4) or (5)’ in paragraph 200AB(1)(b). This change is a consequence of a previous omission of a subparagraph. Item 19 amends item 10 of schedule 6 of the bill by omitting subsection 200AB(5), which is removed by the amendments.

I refer to amendments (15) to (18) and (20), which relate to fair use. These are to be found on sheet QE275. These amendments make a number of technical changes to new section 200AB inserted by item 10 of schedule 6 of the bill. New section 200AB is a significant innovative new exception to ensure copyright law does not unduly block the use of copyright material for socially useful purposes where an exception to copyright does not conflict with Australia’s obligations under international treaties. Amendment (15) amends item 10 of schedule 6 by omitting the words ‘or a person licensed by the owner of the copyright’ from paragraph 200AB(1)(d). The omitting paragraph more closely follows the wording of article 13 of the TRIPS agreement.

Amendment (16) amends item 10 of schedule 6 of the bill by adding ‘or profit’ at the end of paragraph 200AB(2)(c). This amendment requires that a use by a body administering a library or archives must be made partly for the purpose of obtaining a commercial advantage or profit. The present paragraph 200AB(2)(c) in the bill imposes a condition that it not be for the purpose of obtaining a commercial advantage. The intention was that an eligible body should not obtain an exception to copyright if the body administering a library or archives was making use of copyright material partly for the purpose of gaining an advantage, benefit or gain from being engaged in commerce. The addition of the words ‘or profit’ is to make clear that this condition includes that the use by a body administering a library or archives is not to be partly for the purpose of making a profit. Amendments (17) and (18) ensure the term ‘or profit’ is also used with paragraphs 200AB(3)(c) and (4)(c).

Amendment (20) amends item 10 of schedule 6 of the bill by inserting a new subsection. It provides that a use does not fail to meet the conditions in paragraph 200AB(2)(c), (3)(c) or (4)(c) merely because of the charging of a fee that is connected with the use and that fee does not exceed the costs of the use to the charger of the fee—much like a cost recovery mechanism. It is common for bodies such as libraries and archives or educational institutions to impose a fee to recover costs associated with the uses of the kind referred to in section 200AB(2), (3) and (4). The amendment makes clear that the mere fact of adopting a user-pays system of recovering costs connected with the use does not constitute a purpose partly for obtaining a commercial advantage or profit. I think we will leave amendment (21) on sheet QE275 for the moment. We will come back to that one.

Amendments (22) to (35), on sheet QE275, respond to the Senate committee’s recommendations 7 and 8 concerning the operation of schedule 6, part 5. This concerns the official copying of library and archive material. The scope of the exception for key cultural institutions in schedule 6 will be broadened to confer on the minister a power to prescribe by regulation particular institutions as being key cultural institutions for the purposes of the provisions. The government considers this to be a more appropriate approach than listing some new bodies, such as the ABC or SBS, but not others that may have important cultural collections. This provides a degree of flexibility to keep up with events of the day. These amendments will provide scope to consider the merits of claims of institutions other than those who have a statutory function of developing and maintaining a collection but who nonetheless develop and maintain collections that are of historical and cultural significance to Australia.

These amendments will provide that up to three copies of any material—for example, works, sound recordings and films—can be made. However, this can only be done for the purposes of preservation. These provisions complement the other library and archive copying provisions already in the act. The commercial availability test has been retained, as it is appropriate in these circumstances. Free copying of materials should only occur where a copy can no longer be purchased. The commercial availability test does not apply to manuscripts, first records or unpublished records embodying sound recording or first copies, or unpublished copies of films.

The policy for these amendments is to ensure that key cultural institutions are able to fulfil their mandate to preserve items of historical or cultural significance to Australia in their collections. The provisions are consistent with international best-practice guidelines produced by UNESCO for preservation.

I now move to amendment (19), on sheet ZA204, which deals with communication for educational instruction. This amendment is in response to recommendation 9 of the Senate committee. It omits from the bill proposed new section 28A inserted by item 1 of schedule 8 of the bill and substitutes, at the end of existing section 28, new subsections (5), (6) and (7). The amendment is narrower in scope than proposed section 28A in the bill and has been inserted to avoid the unintended consequence that communications made to enable performances in the classroom could also be used for other purposes.

Existing section 28 provides an exception to copyright whereby literary, dramatic and musical works, films and sound recordings may be performed in the classroom without infringing copyright and with no remuneration payable. The section was initially drafted to provide for copyright materials to be performed electronically in the classroom by playing a sound or video recording on a TV video recorder or tape player. Technological developments have led to copyright materials now being communicated from a central source player—for example, located in the library—to remote classrooms.

The new section 28(5) has been drafted to better reflect the government’s policy intention that communications made merely to facilitate performances in classrooms, where those performances are exempt from any remuneration or the need for a licence, should not infringe copyright. The new section 28(5) does not apply to artistic works or broadcasts; these are dealt with separately in sections 28(6) and 28(7) respectively. The effect of these two new subsections is to extend the operation of section 28 to the communication of artistic works, live broadcasts or recordings of broadcasts by educational institutions so that they can be screened or played in the classroom without infringing copyright. The provisions bring the communication of artistic works in line with the treatment of other works under section 28(5) and implement the government’s intention that schools should not be paying broadcasters when they distribute or communicate either live broadcast programs or recordings of broadcast programs for use in the classroom. These amendments do not undermine the operation of part VA. They have been endorsed by both Screenrights and the educational sector as an appropriate compromise.

I now refer to amendment (37), on sheet QE275, which deals with caching by educational institutions. This responds to recommendation 10 of the Senate committee. The amendment replaces proposed new section 200AAA inserted by item 10 of schedule 8 of the bill with a new section 200AAA. The amendment clarifies that caching of online material by educational institutions for efficiency purposes does not infringe copyright. The provision has been redrafted to better reflect the government’s intention that schools should not be liable to pay remuneration when materials are automatically saved in their computers’ own systems cache, particularly when this is done only for the efficient operating of the computer system.

New subsection (2) of the new section 200AAA provides that, where certain conditions are met, copyright of a work or other subject matter is not infringed by reproducing the work or communicating the work to a user of the system. This new section is not intended to allow an educational institution to retain permanent copies of online material, nor to deliberately create an archive of online material under the guise of caching. It is not intended, for example, that the provision would allow the downloading of a computer program onto a server for purposes other than the efficiency of the educational institution’s internet access. The policy intention of the provision is to allow educational institutions to provide efficient internet access.

New subsection (4) of the new section 200AAA requires the new section to be disregarded in circumstances of caching by persons other than educational institutions. This subsection has been included to avoid the risk that the creation of an exception for educational bodies as outlined in the new section creates by inference or statutory interpretation a situation whereby it becomes a copyright-infringing act for other non-educational bodies to proxy cache.

I now refer to amendment (38) on sheet QE275, dealing with encoded broadcasts. This replaces the definition of ‘broadcaster’ with a new definition. The amendment corrects an unintended consequence of the original definition which may, in effect, have excluded parties who were intended to fall with in its scope. The definition of ‘broadcaster’ is central to part 5AA because it is the broadcaster who can authorise or refuse to authorise acts under the provisions. In practice, the person who holds a broadcasting licence under the Broadcasting Services Act 1992 and, in the case of subscription services, who contracts with subscribers to provide a broadcasting service is the appropriate person to provide that authorisation.

In relation to subscription broadcasts, the amended definition reflects industry arrangements where the technical role of making encoded broadcasts is not necessarily undertaken by the licence holders. A person, for example, may be the subscription television broadcast or narrowcast licensee for a certain area or group, but, due to commercial arrangements which provide for the sharing of technical broadcast infrastructure with other broadcasters, that person may not necessarily be the person who makes the encoded broadcast.

I refer to amendment (39) on sheet QE275 dealing with voluntary licences. This substitutes a new definition of ‘licensor’ in the act relating to the jurisdiction of the Copyright Tribunal in place of the proposed definition inserted by the bill. The definition has been revised to restrict ‘licensor’ more clearly to collecting societies, as intended by the government, because the definition in the bill arguably could include substantial copyright owners who are not collecting societies. (Extension of time granted)

I now refer to amendment (40) on sheet QE275, dealing with the ACCC guidelines. This amendment makes a minor change to specify more precisely the circumstances in which the Copyright Tribunal is to have regard to relevant guidelines to be issued by the Australian Competition and Consumer Commission.

Amendments (41) to (44) on sheet QE275 deal with the review of a collecting society’s distribution arrangement. These amendments affirm that an order made by the Copyright Tribunal varying or replacing the distribution arrangement of a declared collecting society does not affect a distribution begun by the society before the tribunal’s order is made.

Amendment (45) on sheet QE275 deals with records notices. This amendment amends schedule 11 of the bill to retain the existing record-keeping requirements applying to educational and other institutions which have chosen to pay for copying under licence on the basis of full recording of copying. This change is being made to the bill, which would have displaced those requirements, at the strong urging of educational representatives. Matters, however, relating to record keeping that are not prescribed by those existing arrangements will be subject to the jurisdiction of the Copyright Tribunal if the parties cannot agree on them. To this extent, the effect of the relevant provisions of the bill will be continued by the amendment.

Finally, I deal with amendments (46) to (63) on sheet QE275. These deal with technical corrections and interoperability. They amend the exceptions for interoperability in schedule 12 of the bill, ‘Technological protection measures’, to make a technical correction. The interoperability exceptions apply to each provision that provides civil or criminal liability for the act of circumvention or for dealings in circumvention devices or services. The effect of these amendments is to clarify that the exception for interoperability applies only where the elements of the computer program that is the subject of circumvention are not or will not be readily available to the persons exercising the exception at the time of circumvention. For example, if the owner of copyright in a computer program has made or will make elements of that computer program that are necessary to create an interoperable program readily available in an unprotected format, the exception will not apply.

That deals with the government amendments which I have moved, by leave, together. I have left out, of course, government amendment (21), which Senator Ludwig has indicated he wishes to deal with separately. I will leave that for separate comment.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

It seems to me that we have taken 45 minutes for the government to get its position all out on the table. For those who are following the debate, the government brought forward the Copyright Amendment Bill 2006, and they then brought forward a number of supplementary amendments to that and then another group of amendments. Some of those amendments then amended the first lot as well. The government has now taken the opportunity of explaining its position and the number of amendments that it is now seeking to move to amend the Copyright Amendment Bill 2006 to accord with the various recommendations and submissions of the parties to the Senate Standing Committee on Legal and Constitutional Affairs.

I can say at the outset that, from Labor’s perspective, the process seems a little untidy, quite frankly. It would have been far more helpful for the government in this instance to have taken a leaf out of its own book—when it did the Anti-Money Laundering and Counter-Terrorism Financing Bill, it withdrew the exposure bill and then had another go and brought forward an exposure bill to leave it on the table a little bit longer to ensure that all of those interested parties had been able to have their say. What it looks like is that we have amendment piled upon amendment piled upon an amending bill. To try to find a position through all of that is no easy task. I can say, though, that the government did pick up many of the recommendations of the Senate legal and constitutional committee, so I cannot be too hard on the government in that respect. But I suspect I will be as the night progresses—it is more than likely.

The government now has a more reasonable bill, and I suspect it could have easily got there without having gone through this tortuous process. However, there can still be some unintended consequences, as some of the consultation process appears to have been truncated and some of it, quite frankly, took too long. From my memory, back in 2001, when I was a parliamentary secretary to Mr McClelland, who was then the shadow Attorney-General, Phillips Fox was undertaking the digital review. The fair use issue was truncated by two years before we got to that review, and now we have this Copyright Amendment Bill.

Most of the submitters complained, and those who did not complain appeared to at least recognise that the process seemed short towards the end. By the time we got to an exposure draft, to a bill and then to the committee, it appeared to be a very truncated process, and it would appear that this can be confirmed by the number of submissions to the committee even after the closing date. Submissions continued to be made to various parties, and to me, even after the committee report had been presented. I am sure submissions were also being made to the government, which would seem to be evidenced by the amendments to the legislation. The submitters were successful in some parts and not in others in persuading the government of the merit of their arguments.

In all, that leaves me concerned that this matter will have to be revisited—that there still may be unintended consequences, and some areas may be unclear, for various stakeholders within the industry. But when you look at the basic premise—that we are trying to achieve some consumer benefit—that does allay some of my concerns. It is well past the time for issues such as time shifting and format shifting to be dealt with. It is unfortunate that the government has dealt with it in the way it has but, be that as it may, it is well overdue. Consumers need some certainty about what they can do, and copyright owners want to maintain their protections and their rights.

It is pleasing that the government has moved significantly away from many of the strict liability offences. The government might be able to reflect on whether the report is still accurate, but it would seem that the issues around criminal liability and the number of strict liability offences that were put forward were extreme to say the least. They covered the whole gamut of the area—they certainly drafted diligently to ensure that no-one, from consumers to business, would escape a strict liability offence.

The submission indicated that we do understand the need to ensure copyright holders’ rights are protected, but a lot of water has flowed under the bridge. Many common-law countries do not have strict liability offences in respect of copyright on their statute books, and they certainly have not found their way into patent or trademark law in Australia. I always hate saying things like that, because sometimes I am surprised the following year when I see trademark law or patent law changed to accommodate those statements I made. But let us hope that that does not happen.

The committee highlighted a range of deficiencies, and I think Ms Weatherall summarised that point. She pointed to many deficiencies with the proposed criminal liability provisions, both from a policy level and in relation to the likely practical impact. In her view, the reach of the provisions is overly broad and most problematic where they apply to acts not made for a commercial purpose or in a commercial context but as a necessary part of conducting ordinary legitimate business by ordinary Australians. That encapsulates the entire area.

The position is that strict liability provisions remain, and I urge caution here. I am not convinced. In the short space of time we have had since the government proposed very strenuous strict liability provisions, many of them covering a range of circumstances, the government’s first position was to take away five of them. Their next position was to take a few more away, perhaps when they understood the effect of Ms Weatherall’s submission. So we have the government backsliding on strict liability. But the concern is that there are still strict liability provisions left. At what point do you stop? Do you stop at a point that is easily and clearly definable, to give certainty to industry and consumers, where strict liability offences apply and where that will be supported by public and business education campaigns so they are aware of what the impact will be?

If you have done that, that is helpful. However, I am not sure that you have or that you have been able to articulate it here with any great certainty. I can foreshadow that we will not move amendments that go to this area, because it is much easier in a sense to mention all the concerns that we have. We note that you moved some way at first. We note that you then slid a lot further. However, we do not know the complete effect of what is left. We have to take it, by and large, on a kiss and a promise that you have got it right.

What also worries me is how the infringement notice scheme will work. But I will come back to that when I get an ALRC report. I am sure you have read it; it is the principled regulations. Hopefully, if my staff member is listening to me, he will bring it down so I will be able to refer to it. Perhaps I can deal with some of it from memory. That ALRC report deals with what would be regarded as model clauses that you would find in an infringement notice scheme. It is important to understand that, if you are going to have an infringement notice scheme, you then require strict liability offences.

To ensure that they sit together well you need to have followed those model provisions in the ALRC report so that all of those issues are covered off. I suspect, Madam Temporary Chair, you will give the government the opportunity to tell me whether they have followed those model provisions. The other position we have come to is that we have now removed 12 strict liability offences—those that the government believe ‘average’ consumers, if there is such a thing, may be susceptible to—and then we have left the commercial type of strict liability offences. But, as I have indicated, if they are to be coupled with an infringement notice scheme then the infringement notice scheme should be at least efficient to the extent that it is compatible with other infringement notice schemes.

If you look at the operation of it, it seems to suggest (a) that you pay a penalty to the Commonwealth—that would be a normal outcome of an infringement notice scheme—and (b) forfeit to the Commonwealth each article, if any, that is alleged ‘to be an infringing copy of a work or other subject matter that is alleged’. Then in (ii) it mentions ‘each device that is alleged’. So it seems to be that there are two provisos. It says:

The regulations may make provision enabling a person who has alleged to have committed an offence of strict liability against this Division to do both of the following ...

So it would seem that both (a) and (b) have to be satisfied. And in (i) and (ii) of (b) there is an ‘and’, so both of those have to be satisfied. I am not sure what happens if you only have one and not the other. I am not sure whether it would create a problem if, for each article, you only had the article and not the device. I am not a perfect enough drafter of these things to understand that. It would probably not be a problem, but I raise it as one of the subsidiary issues. A person might have the device and no article. It may be that the alternates or an ‘or’ might have been a little bit more helpful in relation to ‘each article that is alleged’. But I suspect the regulations may go some way to sorting that question out.

The other issue is the regulations and that, when you do those, you do undertake to at least look at the principled regulations of the ALRC and use the model in constructing them so that there is some uniformity across the Commonwealth. Wearing another hat, I note that in the Customs area you use infringement notice schemes, and I am sure they exist in other areas of the Commonwealth. In implementing them it is helpful to ensure that there is some consistency in approach.

The concept of forfeiture to the Commonwealth is another matter that I would raise. It is a case of whether it is permissible to forfeit, on having paid a penalty. The other question is whether, if the penalty has been paid but then you are asking for a forfeiture to the Commonwealth, you would then have to reward by just means. In other words, is it constitutionally valid to have both provisions of paying a penalty and forfeiting? I understand the Commonwealth does have the power to seize, but in this instance you are asking the citizen to forfeit to the Commonwealth each article and each device, if any. The ‘if any’ might survive the ‘and’, but I think that is a difficult way of drafting these provisions.

I see that I am going to be challenged in being able to finish but I am sure if I sit down I will get another opportunity. I will stop at this point and let someone else have a reasonable attempt.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

To allow some degree of coherent continuity, I will allow Senator Ludwig to finish most of his strand, but I think this process highlights the problem we have. I can understand from a government management point of view that it is easier for them to move all their amendments as one big blob, but it is less than ideal to do so. I guess it is in keeping with the less than ideal process that we have had, including the fact that it took the minister 35 or 40 minutes to go through explaining all of the 80 different amendments, which range across numerous schedules within the bill and quite different topics.

Senator Ludwig, having used up 15 minutes, still needs more time to make his response because there are so many different topics that are being addressed within these bulk amendments. As I said, I think that is a less than ideal process. I might let Senator Ludwig finish his stream of consciousness before I ask one or two questions about one or two of the specific amendments within the government blob before I sit down.

I note for the record that I put a contingent notice on the Notice Paper, which, fairly obviously, I did not proceed with. It arose from when the second reading question was to be put and sought to split the bill into those sections that related specifically to the Australia-US Free Trade Agreement and separate those out from the rest. It is still my view that, from the point of view of the eminently desirable principle of getting things right rather than just getting things through, we would benefit from more time scrutinising the many and varied issues raised in this legislation, including the many and varied amendments and amendments to amendments that have been put forward in the last day or two.

I did not proceed with that contingent motion because it did not have support, and it is a little bit messy separating out some of the amendments to do with the free trade agreement, but I put on the record that it is my view and the Democrats view that that would be the preferable way to go. If there is a sudden uprising of agreement from the government on that, we would certainly embrace it. We do think that this area of law is going to have major consequences for many different stakeholders and, flowing on from that, indirect consequences for pretty much everybody in the Australian community.

You cannot envisage every aspect of how it is going to operate, but I do think one group that will win out of all these changes, at least for a while, is the lawyers, as there will be a lot of work being done to clarify the impact, the meaning and the operation of a number of these changes. To some extent, that is unavoidable. Any time you make a change in this area, people will test the law—I acknowledge that—but I do think that, whilst there have clearly been significant steps forward from where the bill was originally at, with the various amendments that are in it, the process is still less than ideal. This sort of unnecessarily hasty approach, which has been compounded by unnecessarily compacted debate at the moment—with a range of amendments dealing with a lot of different issues all being put together as one congealed wobbling blob—is less than perfect. But, anyway, that is what we have got, so we may as well get on with it.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

This is really a question, so I will keep it open-ended. I have not come to any conclusive view. The ALRC report Principled regulation under ‘Use at federal level: Constitution limits’ says at 12.19:

In the federal sphere in Australia, constitutional considerations prevent non-judicial officers from considering, deciding on and imposing penalties. In this context non-judicial officers can only perform purely administrative tasks; they simply put into effect a process of issuing penalty notices that is triggered automatically by a particular set of facts. For this reason, it is critical to determine whether the amount payable under an infringement notice is truly to be regarded as a penalty, as under the Constitution only a court may exercise judicial power.

I will not go on any further. The first part of it would be (a) paying a penalty to the Commonwealth, but it is the (b) part—that is, forfeiture to the Commonwealth—that I am seeking a view from you on. I am seeking from you a view that it is within the constitutional limits and it does not offend the ALRC—and, if you say that, why it is that you say it does not.

When you look at the other examples they have given of recent schemes, they all appear to have it down pat—for example under ‘Customs infringement notice requirements’, under section 243X, there is an infringement notice scheme and it does not go any further than that. In terms of seizure, for example, it is a matter that they can undertake separately and distinct from the scheme. But what you have done in this instance is tie those together. I was really looking to see whether it was permissible. If you tell me it is, I will accept that I have got that wrong—though I am not sure whether I am even right about it. But, with all of these things, it is better to sort it out now and get it on the record so that we have a lot of certainty here; otherwise someone else will simply challenge it along the way and we will back here again with it. But I am sure you have the right answer and you will be able to help me on that issue.

In terms of Labor’s position, it is pleasing to see that, because of the committee report and Labor’s pushing, these provisions have at least been confined. If you are going to use the infringement notice scheme, in the ALRC report there are a range of guidelines as to how you would bring that scheme into effect. If you have not already, I would encourage you to use those guidelines to ensure that there is some uniformity in your approach.

In relation to time shifting, which makes it legal for people to tape TV or radio programs at home—that is the shorthand way of saying it—for their private and domestic use in order to play them at a more convenient time, the committee did recommend that proposed subsection 111 be redrafted to make it absolutely clear that individual consumers are not restricted to watching and listening to broadcasting recordings in their home. I think I recall at a committee hearing that I was wrong about that, but it now appears that we have shifted a little bit to make it plainer. I do appreciate that the government has provided some certainty on that. Although I must have been wrong at the outset, I have now been persuaded that I was right after all—and that is pleasing to see sometimes. In any event, I think it a case of the more certainty you can provide to the consumer, the better. Labor’s push here is to ensure that that is in fact the case. In Labor’s additional report, it says at recommendation 3:

Labor Senators recommend that the time-shifting and format-shifting provisions of Schedule 6 of the Bill be amended to enable copying for personal and domestic use to occur in places other than domestic premises ...

The other area that comes to mind with amendment (12) on sheet QE275 is format shifting. A submission came to me, and I suspect it went to the government as well, on a matter to do with this and I want to get a bit of clarity on it. The format-shifting position is now certainly better, and I appreciate the government backsliding—after Labor’s pushing—on this to get to a position which gives consumers a lot more certainty. But there is still one outstanding issue that keeps popping up. We seem to keep getting tied up with technology, whether it be an iPod or an MP3 player. Let us talk about technology for a moment.

One way that people distribute information or music now is with an attached video clip. Microsoft is in the future going to use a new device—and I do not want to give them a plug, so I will not use the name of their device—to compete with iPod video, and I guess I have to give the name of that device. You can buy CDs of particular singles which, when you put them into your computer, provide a video clip of the music. That certainly did not exist in my era of vinyl records, but you can now put CDs into your computer and they will play the record and show you the video clip. People can choose to download the video clip, or the music which includes a video clip, to their particular device, which can then replay it.

There is a question in my mind as to whether that is permissible under format shifting or whether a person somewhere along the line has to take only the music and not the video clip which is provided on the CD. It would seem to me that you would have to leave the video clip behind. That may or may not be easy in terms of how these things work and how the software interacts with the particular CD when you are downloading or ripping it—I think that is the word that they use; I should qualify that by saying legitimately ripping it—from the CD and putting it on your video MP3 player. You would then have to try to work out how to leave the video clip behind without breaching copyright. If I have that wrong, then I am sure that you can tell me. If I have got that right, you can tell me what you are going to do about it.

I will not go to the detail of amendment (9) on sheet QE275. In the absence of a broader fair use provision, between amendment (9) and amendment (12) a fair approach has been found. But I will make the point that I have made previously about the technology limits of the bill. The different types of CDs that you can buy, which include ones with video clips, and the different types of downloads available, which can also include video clips, demonstrate that. Our second reading amendment pointed out that one of the concerns that Labor has is that the exceptions regime you have adopted keeps this bill technologically caught in 2006. Technologies change. Music in my era went from 78 LPs to 33s—all vinyl—and then to 8-track, which people quickly forgot and which some people may not recall, to cassettes to CDs to now digital downloads. And even those went through a couple of different formats within all of that, with there now being video clips and YouTube. That is in the space of—and I will not say how long—not a very long time, really. What worries me is that by not adopting a fair use approach you have in part caused the bill to be written for technology which exists in 2006 and therefore have left little room for development, notwithstanding that there is the issue of the protection of the copyright owners and holders as well.

There is an amendment on fair dealing exceptions for research and study on sheet QE275, but I will not deal with that one now because we can come back to that issue. Going to the removal of the commercial availability test, I see that the government have come around to the position recommended by Labor senators. In recommendation 6 of Labor’s additional report, Labor senators recommended that schedule 6 of the bill be amended to remove the commercial availability test. You have not gone that far as yet. I still hope to persuade you later on in respect of that one.

Amendments (22) to (35) on sheet QE275 deal with the cultural institutions. You are dealing with them by regulation. The committee recommended that schedule 6 of the bill be clarified to make it absolutely clear that libraries, archives and cultural institutions are able to make sufficient copies for the purposes of preservation. After a few amendments, you have managed to get to a position which is at least acceptable. When you look at the main committee report, what we find is that you have moved to accept those recommendations, but when you look at the next part, which is about the key cultural institutions, you are doing that by regulation.

One of the difficulties is that we have to rely on the government including all the relevant institutions in the regulations and not simply getting cute by putting some in and leaving others out. That is why in truth I always prefer legislation to be dealt with in the substantive bill. But I understand why you are doing it by regulation. What I seek from you, if you can comment on it to that extent, is a guarantee that you will not leave out what are in effect key cultural institutions. When you deal with the regulations, I want you to approach this in a reasonable manner. I know it will come back here as a disallowable instrument, but I would like an undertaking that those key cultural institutions—such as the ABC, SBS, the Australian Film Commission, university research institutions and other like institutions—are in fact going to be included and not unfairly excluded. We might have an argument around the edges as to which ones might or might not fall within that provision, but if that is the case I would certainly prefer to have that argument here than at some time later on during the examination of a regulation. As you know, regulations are blunt instruments; it is hard to disallow parts of a regulation when trying to achieve a finer point.

I am going to run out of time again, which belies the range of amendments that have been put forward. I will talk in the available time and wrap up my comments on some of these amendments—I can come back to some of them later. Looking at the range of amendments that have been sought to be moved, I am still concerned that some of those provisions have not been fixed up. What happened to amendment (19) was particularly interesting, as you came to an agreement, as I understand it—or at least an acceptance—between the screenwriters and CAG. By the time you had gone to the drafters, it had fallen apart again. They read it and they have come back to you again, and you have fixed the work ‘broadcast’. I have to say it was a tortuous process to follow for all concerned. It is amazing that now it is fixed—we hope. I have not heard anything different to that from those two august bodies. I will leave my comments, and I might come back with some more comments shortly.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I will deal with some of the issues that Senator Ludwig has raised. In dealing with the strict liability and, in particular, the forfeiture that Senator Ludwig noted, we are saying that the bill has a cost-effective remedy to deal with that offending activity that is at the low end of the scale—minor infringements, if you like. That provides for there to be a voluntary forfeiture by the person concerned, so that, if they pay the fine and forfeit the article, they can avoid any further action. If they do not, then there can be a full-scale prosecution and that is the penalty they will suffer. That does not conflict with our understanding of section 51 of the Constitution, which deals with the acquisition of property. We do not believe that position arises at all. We are confident that this regime does not offend that provision of the Constitution.

The general question of the relationship of the regulations with the ALRC report was another matter that Senator Ludwig raised. In preparing the regulations for the infringement notice scheme, the government has followed the Commonwealth guidelines on penalties, issued in 2004, which followed the ALRC report of 2002. We have here a consistent approach. Our approach to the guidelines was as a result of guidelines formulated from the ALRC report, so that is also taken care of.

I can give an undertaking to the Senate that there will be a reasonable approach to the listing of these cultural bodies. Senator Ludwig has mentioned some to which we certainly would have a reasonable approach, and I can give that undertaking. But we do not want to specify them in the legislation, because it is too cumbersome, and we think regulations give you that flexibility.

There was a question about downloading a video coupled with a song, such as what one gets from iTunes. The advice I have is that people who are providing that product have obtained a general licence for the video and song to be downloaded several times. A licence would have already been obtained, which means that you can access or download the song with the video without copyright infringement—that is how I understand it. That was another issue that Senator Ludwig raised. I stress that we are going to have a review, which must be completed by March 2008. The review is going to look at the technical aspects of all of this. I think there is rigour in that, as I said earlier. The report will go to parliament. I think that will be a wide review. I am not so sure we will take up Senator Ludwig’s offer, but of course it will be a wide and transparent process.

Senator Bartlett mentioned that we should go for a broader fair use right and that we have narrowed it too much. I think, as Senator Ludwig says, we need to have certainty for consumers. Our specific exceptions, which we have set out in the bill, provide that clarity and certainty for consumers. If we simply had a broad definition and left it at that, I think it would give lawyers a field day when trying to work out what it all meant. I think it is better to have it the way that we have structured it. I think that deals with Senator Ludwig’s issues.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

I would like to direct some questions to the minister. In my speech in the second reading debate yesterday I raised the process of lip-syncing a song and then placing it on YouTube or MySpace. I want to ask the minister specifically whether that circumstance, which I think relates to strict liability—distributing material online to an extent that it prejudices a copyright owner—is still a strict liability offence, because my understanding is that that is the provision that catches the scenario of a 14-year-old lip-syncing a song. This provision alone, according to notes by Kim Weatherall from, I think, her blog, would make our criminal law significantly harsher than US law, since in the US you have to at least distribute $1,000 worth of retail value of infringing copies before you get pinged under criminal law. I have another question, but if the minister is able to respond to that now, I will come back to it.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I can give a straightforward answer to that. The answer is no; that strict liability applies for the purpose of trade.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

Another scenario that I think has been quite popular in the debate is that of causing a film to be seen or a sound recording to be heard in public at a place of public entertainment—scenarios like playing your radio or CD player too loud or showing kids a film on a wet day on a school camp. They were technically criminal offences attracting strict liability. Can you provide an explanation to the Senate of the status of those examples, please?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

Both those examples would not attract the strict liability regime, so the answer would be no.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

Thank you. One more scenario is the process of breaching copyright. If someone did breach copyright, and they copied and then sold a CD, so a commercial activity was involved, how many offences would that constitute? With each offence, would that compound the strict liability penalty involved or would that constitute one offence and therefore attract the $6,600 fine as opposed to a $60,000 fine? Can you explain how those strict liability penalty infringements would apply in a scenario where one CD was sold that someone had ripped and breached copyright?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

The advice I have is that that will be dealt with by guidelines. Unfortunately, I cannot provide the detail here, so I will take that question on notice and get back to Senator Lundy.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

I think it is important, particularly because it was noted during the Senate inquiry that the AFP had not done the work necessary to be able to give the committee full information about the application of the strict liability regime in any of its capacities. I would like to know the detail about how these fines would apply, given that there are still some consumers out there who might breach copyright. There might be something commercial tied up in that, but it does not make them any more of a criminal in doing that activity. I am still concerned about those inadvertent copyright breaches that might technically have a commercial element to them and the magnitude and application of the fine as a result of the strict liability offence.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

As I said, the principle is: one item copied many times or many items copie once. Those are the two conflicting scenarios you have. I might add that it is certainly a very different scenario when someone has a lot of copies and they are for their own use. But if someone has a lot of copies and they are selling them for financial gain, that is a different story as well. We recently had some experience in markets where we had quite organised groups selling copies that had been made many times of the one thing and sold for gain. I will take that on notice and get back to you, Senator Lundy.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

Just to sum up the concerns, it really is about the sort of scenario where innocent people who are not motivated to make a profit or do a bulk load get pinged through maybe doing something for a friend or something like that. It could not be seen as criminal activity. I guess where the concern about strict liability comes in is that those circumstances are not able to be taken into account in the eyes of the law. I know you have taken it on notice, so I will look forward to your response later in the evening.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Senator Lundy raised an issue that is important in that, when the AFP made their submission, they had not had an opportunity to look at all the strict liability offences. However, we will get to the AFP again, if not through estimates. But it would be helpful if we understood how the AFP intends to operate in this field now that at least the amendments upon the amendments upon the amendments are now finalised, because they have what is called a case categorisation and prioritisation model. They rate things as high, medium and low, and it depends on whether they accept a case as to how these matters will be enforced so that the consumers, during the education campaign, understand where the AFP will intrude and where they may or may not. I understand that you cannot direct the AFP as easily as that, but I think it is helpful that some of the guidelines between the Attorney-General’s Department and the AFP make it clear as to where and when they are more likely to act, depending on whether it meets the case categorisation and prioritisation model, the CCPM, where it will not, what happens to those where it does not meet the CCPM—where it is not accepted—where it goes to next and whether you intend to use an infringement notice scheme issued by Customs officials or by clerks in Attorney-General’s, as the case may be. How will that regime work?

We came across this in another bill—and I think the Attorney-General’s Department might be aware of it—which dealt with search and seizure powers for Centrelink. I might be talking about them out of school, but I understood that they had a range of minor fraud matters which did not meet the CCPM but which they were still vitally interested in—matters that they regarded as serious but not serious enough to warrant the Australian Federal Police to pick up. Centrelink were trying to pick up that workload themselves. In this area, they were seeking information from the government as to how to structure their enforcement regime, whether all the matters would be referred to the AFP for investigation, whether they would meet the CCPM or whether it was intended to use another law enforcement agency to enforce those less serious areas. I am seeking certainty so that the public understand how these matters will work.

There are a couple of other matters that I have not gone to in any detail. I will refer to them briefly. Firstly, the caching matter. Recommendation 10 states:

The committee recommends that proposed section 200AAA in Schedule 8 of the Bill be clarified to ensure that caching for efficiency purposes (proxy caching) does not infringe copyright; and to ensure that there is no doubt that the reproduction must be removed ...

It seems that the government has adopted the substance of the compromise recommendation from schools and screenwriters which I think I briefly referred to earlier.

In terms of record keeping for educational institutions, the bill contained a repeal of the provisions which give effect to a prescribed record-keeping system. If implemented, the Australian Vice-Chancellors Committee submitted that:

... an institution issuing a records notice would be required to reach agreement with the collecting society regarding the form of record keeping system or, failing that, apply to the Tribunal for determination …

This would involve enormous cost. In Labor’s supplementary report—and I am pleased to say that it looks like Labor has again been at the fore in trying to effect a reasonable outcome for all—recommendation 7 states:

Labor Senators recommend that Schedule 11 of the Bill be amended to remove proposed paragraphs 135K(1)(b)(c) and (d), and proposed paragraphs 135ZX(1)(b)(c) and (d) in relation to records notices.

This recommendation attempts to ameliorate the effects submitted by the Australian Vice-Chancellors Committee. The government of course has introduced a new regime for records notices—existing sections are retained and new provisions added so that where there is a dispute that cannot be resolved between the parties the Copyright Tribunal shall have jurisdiction. Again that seems okay, if I can use that colloquial language. The concern is whether in practice it does not have the effect the AVCC is concerned about, that it does create enormous cost through unintended consequences. In that instance, it appears to have satisfied the concerns. Again, without more information, I am unable to come to a conclusive view, but I will take it on the government’s say-so that in fact it does meet those requirements that were raised and that the parties will not unnecessarily be burdened by cost when they try to fairly resolve the issues between them.

Some of the other broader issues I will not go to in detail given the time. However, there were a range of additional amendments which went to definition of ‘record’ in section 51(1) and the removal of parody or satire provisions from section 200AB and the insertion of a new provision—sections 41A and 103AA. Certainly all the submissions we heard from indicated that that needed rectification of some type.

Amendments (15) to (18) have expanded commercial advantage to include profit—one wonders whether you need to include loss as well sometime, but I will not go there if you do not need to. Amendment (20) inserts a new subsection 200AB, which clarifies cost recovery for not commercial advantage or profit. I will not go through all the amendments, but it seems that we have got to a much better position than when we started this process.

In conclusion, I want to touch on strict liability again. There is still some concern from those who want to protect their copyright—copyright owners and copyright holders—to ensure that the regime is fair and that they can rely on the government to effectively implement a scheme that adequately polices this area. They are also concerned to ensure that the Australian Federal Police have sufficient resources and are clear about what their duties will be under this regime so that they can assist in combating copyright abuse—in fact, I think they prefer to refer to it as theft. I am seeking some assurances from the government that they have worked out the details of what I referred to earlier and that they can provide some assurance to copyright owners that the Australian Federal Police have sufficient resources to assist with enforcement in this area.

The last matters I want to go to—and, really, it was a late run—are a number of concerns raised by the ISPs, the internet service providers. They had some disquiet, as it was conveyed to me, about how this bill would operate. It seems that a major concern for the ICT sector relates to the proposed distribution of strict liability offences. As I understand it, some of those have been dealt with. But if the government could turn their minds to how the ISP concerns have been met, we could at least have it in the transcript that we have raised it and that the government have provided some answers.

Regarding the definition of the term ‘distribution’ in section 132AI, given that there is no scope for a court to interpret, it seems that an ISP could be subject to criminal sanctions. What they are trying to understand is what sort of criminal liability might attach to an ISP in this area and whether there is scope for the ISP to be found liable for authorising copyright infringement in situations where an ISP could be held criminally liable for the actions of others, under the strict liability provisions that still remain. Will the distribution offence in the bill capture an ISP or another person, such as a subscriber of the ISP, who has used the ISP’s network to communicate infringing copies? I can understand their concern. I make no value judgement about it, provided that the minister can provide some certainty as to how it would apply. That would go some way to mitigating the concern I have.

I go to the interrelationship between the new strict liability criminal offences created by this bill and the safe harbour provision that could limit the ISPs in certain circumstances—whether or not that regime provides a shield to criminal action. Of course, it is one of those matters that should be on the table for continual review. I note that the government has provided a review mechanism in the bill. Perhaps I worry unnecessarily, but, given that we started back in 2001 with the digital agenda review, the other fair use review, we do not want to end up with a process such as this again. In government, Labor would not undertake this messy approach, I have to say. In opposition, we had no choice but to work with the government to try to improve the legislation. With that, I will take my leave.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

Firstly, in relation to the ISPs, I understand that the concern that Senator Ludwig has is that an internet service provider may be criminally liable for actions of third parties who use an ISP’s network to communicate infringing copies. Certainly, the government is satisfied that this does not alter the current position of ISPs under the Copyright Act, that no further clarifying amendments are necessary and that to commit an offence a person or entity must directly commit all the elements of the offence themselves. In the case that I have described, an ISP would not be liable.

In relation to the enforcement of all this, it has been raised at the Police Ministers Council with not much success. I think that there is an avenue for state and territory police to have a role in the enforcement of this because, with regard to groups that are involved in a more organised criminal way, we have found that other things are involved, such as drugs or other illegal behaviour. It is clearly in the interest of states to take part in this. We would want to see not only the Australian Federal Police but also state and territory police involved. Of course, case prioritisation would apply to this, as with anything else, and that is a matter for the AFP. Certainly, I would leave that to the AFP. I would imagine that the AFP would be more preoccupied with the organised aspects of this, where we see, as we have seen recently, organised syndicates involved in infringing copyright in a systematic way and doing so for the purposes of financial gain.

In relation to a more general approach to this, Senator Ludwig, you and I have discussed the role of the Australian Crime Commission. There could well be a role for the Australian Crime Commission in carrying out a determination in relation to assessing how large the problem is, where it is situated and what form and shape it takes. That is something that is best left until after we deal with the passage of this legislation. Certainly, the AFP will be looking at this legislation and working out how it can apply the law and enforce it. But, importantly, we would envisage the state and territory police services having a role in this as well, and that is something that I intend to pursue at the Police Ministers Council. As to how they would prioritise a particular infringement, I think it would be the same as with any other matter: it would go to the extent of criminality, the effect it is having and the seriousness of it—all the usual criteria that would be looked at in assessing a case for investigation. I think that deals with the major issues that Senator Ludwig raised.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

On the earlier issue about fines, I have some more information that might help the minister resolve my question. For every commercial copy of a CD that is made—again, working on the scenario that it was not done for commercial profit—each song has three copyright protections on it and each CD has, say, 10 songs on it. So that could be technically 33 individual copyright infringements for one CD copied and sold. The act currently talks about a fine for a copyright infringement of $6,600. Extrapolating that, 33 times $6,600 is $217,800 for that one technical sale of one CD. That really goes to the heart of the point I was making earlier. It also goes to the heart of the issue that Senator Ludwig raised about the fact that we do not know how these fines are going to be applied, we do not know whether there is a limit on how a fine could be applied to one individual in what circumstances and we do not know whether the on-the-spot fine has any potential restrictions on it. You can appreciate that even in the sale of 10 CDs inadvertently to mates you could be looking at, quite absurdly, fines of over a million dollars. I do not think that would be the intention of the bill, but I am looking forward to the clarification from the minister in that regard.

I would also like to follow up some questions about ISPs. In particular, further to Senator Ludwig’s questions, I would like to follow up whether there is any potential for ancillary liability—for an ISP to be pulled into having some liability for distribution. Could the minister outline the interrelationship between the new strict liability criminal offences created by this bill and the safe harbour provisions that could limit the liability of ISPs in certain circumstances and whether or not that safe harbour regime provides any shield to criminal liabilities under this bill.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I might just reiterate that to commit an offence, a person or entity must directly commit all the elements of the offence themselves. There is no ancillary liability; there is no vicarious liability. You must commit the offence yourself, all the elements thereof, so that an unwary or unwitting ISP cannot just be snared in the way that Senator Ludwig has indicated. I want to be quite clear about that. The fine which Senator Ludwig refers to is $1,320 for an individual and $6,600 for a company. In the scenario that Senator Lundy has portrayed, the liability would attach to the article that is being copied—the article which is the DVD. It does not matter how many songs are on there; it is the article for which you are fined. It would not be a case of being fined 13 times, for each different song on the article.

The other scenario was that of a person who has made some CDs and sells a couple to his mates for, say, $10 or whatever. This is a discretionary system as to whether to issue an infringement notice. Certainly it is one which is based on the facts. Throughout my remarks in support of these amendments I have mentioned that the aim of the legislation is to target those pirates who are the ‘genuine pirates’, if I can call them that—if a pirate can be genuine—and not the unwitting user or the person who is a consumer. The area that Senator Ludwig is describing is one which is not in that domain of a genuine pirate. Certainly, from my knowledge of the AFP and the people they have been targeting, it would not be the person that Senator Ludwig has described. It would be those people down at the markets who are selling CDs in a very organised fashion. They are the ones who are doing all the damage.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

I want to pursue the question about the interrelationship with the new provisions. Notwithstanding your assurances about the ISPs attracting no liability, has there been an analysis done about the interrelationship between those offences and the safe harbour provisions that affect ISPs? I would like you to reconcile how much discretion is associated with the strict liability regime.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

It is a very broad discretion because, as much as any police officer exercising his or her duty when they come across someone who may have infringed the law, they enforce the law but they do so on a very common-sense basis. So it is hard to really describe how a person such as an AFP officer would exercise that discretion. It would be according to normal policing work, I would suggest.

In relation to the analysis, there has been no analysis that I am aware of, but we have certainly examined the interrelationship with safe harbour provisions. If you are talking about a formal review—and that is an independent assessment—then certainly the department and the government have examined the interrelationship with safe harbour provisions. As with the existing offences, the new criminal offence regime will not have any effect on the operation of the safe harbour provisions in part V, division 2AA. I think that that spells it out as clearly as it could be. I think that does address that concern quite squarely.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I just want to ask the minister a couple of questions about some of the amendments, firstly, the very final—amendment, (19), on sheet ZA204, dealing with communication for educational institutions. I just want to clarify a point. I think it was when he was talking to that amendment—he spoke to a lot amendments—he said that this amendment has been endorsed by the educational sector as an appropriate compromise. I have still been receiving representations from a range of people, as I am sure we all have right up until now—in fact I still have emails coming through right in front of me. I did get one on this area about the same time as this amendment was tabled. I just want to check: when you say the educational sector, does that mean the universities, for example, or schools or libraries or are you able to reassure the Senate that that solution you have got there, which I think is an amendment to what was originally amendment (36) on the other sheet, is now one that, broadly speaking, the universities and others—vice-chancellors, schools et cetera—have, as you said, endorsed as satisfactory?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I can confirm that it is amendment (19) on sheet ZA204 where I state that the amendments do not undermine the operation of part (5)(a). They have been endorsed by both screenwriters and the educational sector as an appropriate compromise. The educational sector comprised both schools and universities and representative bodies for them, and I think that addresses Senator Bartlett’s concern that it was a broad representation of the educational sector.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I also had a question about amendment (18), which requires a review to be carried out by the end of March 2008 of the operation of sections 47J and 110AA of the Copyright Act and for it to be tabled in parliament. I note that recommendation 15 from the majority report recommends that the government undertakes a public review of the impact of the changes made to the Copyright Act by this bill, a review of all of the changes rather than just those two sections. Is there some broader intent? What is the government’s response to that recommendation? Are you making any commitment to undertake a review of the totality of the impact of all of these changes or just to those two sections? Secondly, whilst I recognise that it is not appropriate to detail in legislation the full nature of the type of review that is foreshadowed or will be required by the amendment, is the minister able to give a commitment that the review will be a public one that will enable public input rather than an internal departmental one?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

To have a review at that time of the whole act would be too broad and too soon. What we have chosen here with sections 47J and 110AA are the most innovative aspects of the bill. They are the ones where you are actually breaking new ground with format shifting and other things, and I think it is important that we look at that area. That is where the new frontier is, if you like. Certainly, we will pick up things as we move along. The process has demonstrated this. The very reason we have these amendments here tonight is as a result of the Senate Legal and Constitutional Legislation Committee making recommendations, and others as well. In fact some of these have been the result of stakeholders making further representations. It would be very foolish to stand still with copyright law and with emerging technologies. As the Attorney-General and I have said several times: it is an issue which we have to keep abreast of. But initially to have the outcomes that we need, I think that we need to make that review targeted and rigorous and according to a strict time line, and that is what we have done. But to have a broad one at that stage would be too early, and I think the breadth of it would defeat the purpose. I can understand what Senator Bartlett is saying but I think that the government’s position is that we have had a period of exposure drafts, a thorough period of consultation and we need to get this legislation bedded down and see how it runs. If amendments need to be made we will make them, but in relation to those innovative ones we definitely will have a very targeted review.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The question is that government amendments (1) to (19) on sheet ZA204, and (1) to (20) and (22) to (63) on sheet QE275 be agreed to.

Question agreed to.

The Temporary Chairman:

The question now is that amendment (21) on sheet QE275 be agreed to.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

As I indicated earlier, I reserved my remarks on this one. This replaces proposed 40(5) in the bill with a new subsection and inserts new subsections 40(6), (7) and (8). This amendment is being made in response to recommendation 6 of the Senate committee and submissions by stakeholders. The new 40(5) makes the same change to existing section 40(3) as was intended by proposed section 40(5) in the bill. Many stakeholders, commenting on the proposed section 40(5) in the bill, expressed the understanding that it had a different effect from what was intended. Section 40(5) in the amendment has been drafted to express the original intention in a different and clearer way. It does so by incorporating a definition of ‘reasonable portion’ instead of referring to the definition in subsections 10(2) and (2A) and also indicates the works of which such amount may be reproduced.

It is also intended to make it clear that, as is the case under section 40 of the act now, reproduction of more than a reasonable portion of the works referred to in section 40(5) or of other works may still be considered a fair dealing for research or study under sections 40(1) and 40(2). The new subsections that are inserted by way of amendment are consequential on the redrafting of section 40(5). This is a matter which relates to fair dealing for research or study, and I commend the amendment to the Senate.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

As I foreshadowed, we do not agree with amendment (21). We think the original provision in the act should stand. It really is one of those areas where I think caution is warranted. Amendment (21) has also significantly changed from the earlier amendment, and you have then formatted it. The concern is whether or not it really achieves the purpose that you set out for it, or at least that you hope it will achieve. The amendment reads:

Despite subsection (2), a reproduction, for the purpose of research or study, of not more than a reasonable portion of a work or adaptation that is described in an item of the table and is not contained in an article in a periodical publication is taken to be a fair dealing with the work or adaptation for the purpose of research or study.

And then the table sets out two items under ‘work or adaptation’ and the amount that is a reasonable portion, which is, under item 1:

(a)

10% of the number of pages in the edition; or

(b)

if the work or adaptation is divided into chapters—a single chapter

Item 2 differentiates between that type of work and ‘a published literary work in electronic form’ and considers a reasonable portion as being:

(a)

10% of the number of words in the work or adaptation; or

(b)

if the work or adaptation is divided into chapters—a single chapter

One of the concerns raised is that, because of the way the online environment works, people are retailing, or at least putting online, chapters for sale, and the argument is that this would reduce a business case for the future. I am not going to run with that particular argument; I will simply say that the difficulty in moving this way is that you will put in place a regime that I do not think has the support of the whole industry. It certainly has not been discussed enough at this point to provide certainty, although you might disagree with that, Minister. ‘Reasonable portion’ is now based on 10 per cent of the words in an electronic work and 10 per cent of the number of pages of a non-electronic work, as the two main criteria.

We are urging that you maintain the current position of the existing provision in the Copyright Act 1968 until such time as you can at least consult with all the relevant parties to come to a much better position than the one you have arrived at now. It is not so much about the provision as drafted if it works the way you hope it will work—but I doubt that it will in fact achieve that and I think the parties will end up litigating to try to achieve some certainty. I always find it disappointing when we end up there, having to work out what the provision should or should not say and what copyright holders’ rights are. I will not spend any more time on this area. I have made the point that I need to make. Given the time, I will leave it at that.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I wanted to ask the minister about the new version of section 40(5) that will be put in place by government amendment (21), perhaps following through a bit further on the scenario or the reality that Senator Ludwig described, where in the online environment a work that is a ‘published literary work in electronic form’ is sometimes retailed in single chapters—people can purchase individual chapters. In the table under amendment (21), it says that if the work or adaptation is divided into chapters then a single chapter is a ‘reasonable portion’. I wanted to clarify that, when you talk about an adaptation, you do not mean a work that is being adapted for the online environment per se. Also, I am sure that the minister is aware of the argument that Senator Ludwig put about the potential impact of this proposed section on work that is retailed in single chapters, and I wanted to know if the minister had a response to that concern and its potential impact on publishers and copyright owners.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

In relation to the effect of amendment (21) on section 40 of the act, the amendment defines with certainty what works can be so copied. It also defines with certainty how much of such works is a reasonable portion that can be copied. The existing section 40 does not provide anyone with the certainty that we think it should, and we believe that this amendment makes it even clearer. You heard Senator Ludwig say that the 10 per cent relates to words for electronic works and to pages for hard-copy works. We believe that this amendment does improve section 40 for those reasons, and I think that it is highly desirable that we have a clearer understanding of how that section 40 works for both the copyright holder and the user. They know exactly where they stand with this amendment.

Question agreed to.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I can gladly say that I am not going to move amendments (1) to (26) on sheet 5133 revised. I think I made the point and foreshadowed that I would not be moving those amendments in relation to strict liability. I dealt with those comprehensively. What we have had, of course, is the shocking position where the government backslid on five strict liability offences, with significant pushing by Labor, and then they backslid again because of the nonsensical position they got to. So, rather than try to complicate it any further, I indicated then that I thought they were wrong the first time and they were still wrong the second time. I think I have made that point three or four times now, so I will not continue to make the point. We can move on to the Democrat amendments.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

by leave—I move Democrat amendments (1), (2) and (3) on sheet 5132 revised:

(1)    Schedule 1, page 37 (after line 12), after item 12, insert:

12A Subsection 152(1) (after the definition of broadcasting)

Insert:

community radio broadcasting licence means a community broadcasting licence allocated by the Australian Broadcasting Authority under the Broadcasting Services Act 1992 that authorises the holder of the licence to broadcast radio programs.

(2)    Schedule 1, page 37 (after line 12), after item 12, insert:

12B Subsection 152(8)

Repeal the subsection, substitute:

        (8)    The Tribunal must not make an order that would require a broadcaster who is the holder of a community radio broadcasting licence to pay, in respect of the broadcasting of published sound recordings during the period covered by the order, an amount exceeding 1% of the amount determined by the Tribunal to be the gross earnings of the broadcaster during the period equal to the period covered by the order that ended on the last 30 June that occurred before the period covered by the order.

(3)    Schedule 1, page 37 (after line 12), after item 12, insert:

12C Subsection 152(9)

Repeal the subsection, substitute:

        (9)    If a broadcaster that is the holder of a licence referred to in subsection (8) has, with the permission of the Australian Broadcasting Authority, adopted an accounting period ending on a day other than 30 June, the reference in subsection (8) to 30 June is, in relation to the broadcaster, a reference to that other day.

community radio broadcasting licence means a community broadcasting licence allocated by the Australian Broadcasting Authority under the Broadcasting Services Act 1992 that authorises the holder of the licence to broadcast radio programs.

These amendments deal with something that should be in the bill but is not. As I mentioned in my speech in the second reading debate, the whole bill before us—and let us not forget that it has 12 schedules and 213 pages—deals with a huge range of issues, particularly areas like fair use provisions, the digital agenda review and technological protection measures. Whilst the very final stage of the process—the extremely rushed consideration of the legislation—has been unsatisfactory, the procedures leading up to that did involve a lot of public consultation and a lot of different reviews and exposure drafts of legislation. That is certainly welcomed.

Alongside of all those reviews there was also a review announced nearly two years ago by the Attorney-General, Mr Ruddock, on the current circumstance surrounding the cap on the licence fee for playing sound recordings on radio—usually known by the terms ‘music’ and ‘songs’. This review relates to an issue that has been around for a long time. The debate has been around for a long time. But it was conducted alongside all of the other ones, with a range of public consultation and stakeholder input.

Many of the changes that we are dealing with tonight in the legislation were announced by the Attorney-General in a very long media release on 14 May 2006. It was headed ‘Major copyright reforms strike balance’. All those reforms, in areas like legislative reform to tackle piracy, strengthening of copyright enforcement, new flexible dealing exceptions, reforms arising from the digital agenda review and new exceptions for private use, are contained in the legislation—even the amendments to do with pirate goods coming into the country and the activities of Customs. All of these changes were announced on 14 May 2006. All of them, in varying forms and amended in some ways following further consultation, are contained in this legislation, except for the Attorney-General’s commitment to removing the licence fee cap for playing sound recordings on radio. I will read the Attorney-General’s comments from that time into the record, because it puts the argument quite well. He says:

After an open public consultation process, the Government has agreed to remove the legislative cap on copyright licence fees paid by radio broadcasters for playing sound recordings. The one per cent cap was adopted in 1968 to protect radio broadcasters because they faced special economic difficulties at that time. Sound recording owners (mainly record companies and artists) and radio broadcasters, who operate in a profitable and robust industry, should be able to negotiate a market rate without legislative intervention. If they can’t agree on fees, they can put their case to the independent Copyright Tribunal, like any other copyright owners and users.

That is what Mr Ruddock said on 14 May 2006, as I said, as part of a media release headed ‘Major copyright reforms strike balance’. One of the concerns I have is that, by not having this in this package of reform measures, it actually distorts the balance, as was made clear quite specifically in evidence given to the Senate committee hearing into this legislation.

Some of these other changes will directly lead to lower income streams for copyright holders, particularly for performers—that is, lower royalties, particularly with some of the changes to copying. I am not saying I therefore oppose those changes; I am simply saying that it is quite clear, almost by definition, that that will be the case. It will now be opened up for people to be more easily able to copy as part of fair use changes. It is reasonable to say, as Mr Ruddock’s headline implies, that it is part of a balance that you should also make the change which opens up to a market rate the income available and the income stream for performers, artists and musicians in Australia. It therefore harms that balance not to have this measure in the legislation.

In his summary remarks on closing the second reading stage of the debate, the minister responded to my comments in the second reading stage. When I asked why the removal of the one per cent cap on licence fees involving the broadcast of sound recordings was not contained in the bill, the minister said:

The government agrees that this is an important issue and it has consulted and come to a decision on it ... A number of submissions from affected stakeholders in recent months have meant that further work is required. This could not be completed in time for the introduction of this bill. The government has therefore not made a decision about the timing of this reform.

I must say that I do not think that satisfactorily answers the concerns I expressed and the arguments I put, with all due respect to the minister. This is not a complex amendment; it is very straightforward. Unlike a lot of this legislation, it is a very simple, discrete amendment and a very simple, discrete issue. As always, there are arguments on both sides; however, it is pretty clear what the arguments are and it is very clear what the effects will be one way or the other. Unlike a lot of more complex areas we have been dealing with in respect of this legislation, where you are balancing a range of different competing interests and uncertainty about definitions and legal consequences, there is simply no question about the broadcast licence fee.

This is the only group in the community that are not able to have access to a fair market basis without any statutory restrictions on earning an income from their copyright. While I would not make the argument about why it is appropriate for the cap to be removed—as Minister Ruddock said, it was put in place in 1968 on the basis of special economic difficulties at that time—I do not quite remember the special economic circumstances that were faced by the commercial radio industry in 1968. I’m fibbing; I do remember those 78s, just before the LPs came in that Senator Ludwig referred to, so perhaps I’m about as old as he is but, whatever they were, they are certainly not present now. After the recent media reforms that were passed a few weeks ago, I do not think anybody would suggest that the commercial radio industry is facing economic hard times and that there is some reason why they should get special treatment, that there are some circumstances of the moment that would suggest they need to have this little reduction in costs—a reduction in costs, I might say, at the expense of Australian musicians.

The argument for removing the cap is very strong and very clear. It is a bit hard to make the argument, because the government itself has accepted it. Minister Ellison said that the cabinet has come to a decision on it. There is no indication, unless the minister wants to correct me, that the government has changed its decision, so why are we not doing it now? We all know the reality that this major package of copyright reform measures is a one-off. We know that it will be much more difficult to get a single, discrete, small piece of Copyright Act amendment legislation up before the next election. Indeed, the very argument that the department put at the Senate committee hearing as to why we had to deal with all of these measures now, rather than just deal with the ones to do with the free trade agreement that had to be through before the end of the year, was that the government wanted to make all of these changes as part of one total reform package. Well, you cannot have it both ways. If you want a total reform package, then let us have the total package. Why is this one element not in the package?

The minister said a number of submissions from affected stakeholders meant that further work was required. What is it that is required? What is the further work that is being done that could not be completed in time for the introduction of this legislation? Is the government changing its decision? If the cabinet decision stands, why are we not proceeding now with this change? I simply say that, whilst there is competing interest here, this is a clear-cut situation of who the interests are—it is that part of the commercial radio industry that relies a lot on playing music versus Australian musicians, performers and their record companies. They are the winners and losers here.

The simple fact is that, if the cap is removed, artists and performers and their record companies and representatives will be able to negotiate a licence fee with commercial radio as every other copyright user can do in all other areas of the Copyright Act. If no agreement can be reached, they can go to the Copyright Tribunal and determine a fair market rate, just as everybody else does. What possible reason can there be for this group within the Australian community, musicians and performers in particular, to have their incomes capped? Nobody is suggesting that talk-back hosts, who are another part of commercial radio expenses, have their incomes capped. Some people might like the idea of it, but nobody is going to suggest it. In effect, it means a subsidy, but commercial radio stations that play music are able to get their product at below market rates compared with that part of the commercial radio industry that does not generate that product predominantly from music. That in itself is a market distortion that I think is unfair.

So there are any number of arguments as to why the cap should be removed. It is a bit of extra special treatment for the commercial radio industry and is not one that I can see has any justification, particularly given that this legislatively imposed cap on the earning stream of copyright owners, musicians, performers and their record companies are the only groups in the community that this applies to. I really need to get some indication from the government. As everybody in this chamber would know, this remains an ongoing issue and one that has a lot of interest from a lot of people in the community. I think the least I can get is a clear idea of what is going on. The government said they made a decision six months ago. The minister said yesterday they have come to a decision. The decision has not changed. They need to get all the reforms through in one package. Here is the package. It is all before us. What is the problem?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I will not be very long. Unfortunately, I am not in a position to support the Democrat amendments. I understand the principled position Senator Bartlett has put in respect of it. In fact, I would pick up on one part and say to the government that it is not part of this amendment package. I think that is plain. It seems to be a matter that falls generally in the area but is certainly not part of the legislative package, even as amended, that this government is pursuing.

But the government did put out a discussion paper on this issue and it appears to me that the government intends to take some action in this area. It would be helpful if the government could advise as to when it intends to take some action in this area, so that we can have a look at what the government intends to bring forward in a real and concrete way. Otherwise, I will start using the language again that the government is ‘dragging its heels’ in respect of this area.

I guess in this instance it would apply to Mr Ruddock and not you, Senator Ellison, so you can at least duck that one. But I think it is important that the government addresses this area. I do not want to see four years go by, or five—as was the case of the digital agenda review—and then suddenly have a rush to bundle it in at the end together with the fair use review and those matters that had to be dealt with under the Australia-US FTA, which you have done, but that it should be dealt with in this way for the one per cent cap on licensing fees for commercial play Australia. It is an important area that should be addressed and the government should be encouraged—perhaps Minister Ellison could encourage Mr Ruddock—to address it in such a way that it comes back here in a concrete form.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

This is an amendment which does not necessarily relate to the others that we have been talking about today. It is not essential that it be dealt with at the same time. In any event, the government has been seeking submissions from key affected stakeholders in recent months, and has not made a decision on the timing of this change. The matter is still under consideration. It is not in any way disadvantageous to this bill or the other provisions if it is not there.

It may be a simple amendment that the Democrats are proposing but it is a complex issue that needs to be carefully considered, and that is what the government is doing. For those reasons the government cannot support the Democrat amendments.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

In response to Senator Ludwig’s comments, it has been said that the government put out a discussion paper. They did not just put out a discussion paper; they put out a decision. They announced a cabinet decision. Why is it that after having made the cabinet decision more than six months ago there now needs to be work done with affected stakeholders?

With respect to the minister, this is not a complex issue; it is a very clear-cut issue. It is far less complex than a lot of the matters that are in other schedules in this legislation. It is just as relevant to the matters before us as all of the other 12 schedules in this legislation. Many of the schedules in this legislation could have been stand-alone schedules. The 12 schedules do not interrelate; they do not interconnect in some sort of intrinsically interwoven package. This is totally validly part of what is before us today. That is why Minister Ruddock announced the government’s decision at the same time as he announced all the other changes and decisions that are reflected in the legislation.

For the minister to simply say, ‘We’re still talking with affected stakeholders,’ frankly does not answer the simple question: if further work is required, does this mean that the government have changed their decision? Does the cabinet decision and the decision announced by Minister Ruddock still stand? We could at least get that on the record.

In implementing this change there is obviously a prospect of some sort of financial impact down the track. Nobody knows how much, because if it went to the Copyright Tribunal nobody knows what market value they would determine. So it seems to me that you could not do some sort of adjustment package until you knew what sort of adjustment would be needed—assuming there is any adjustment assistance needed, which is another issue.

I appreciate that Minister Ellison is not Minister Ruddock and he is not in a position to be persuaded by my arguments. Well, I am sure he can be persuaded by my arguments but he is not in a position to vote in accordance with the persuasiveness of my arguments even if he was persuaded, which he probably is! But he could at least clarify for the record whether the cabinet decision to remove this cap still stands as part 1.

Some of the most obviously affected stakeholders are those who continue to be affected by having their income constrained artificially—which are performers and record companies. Are they amongst the stakeholders that work is being done with?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

It is no secret that the government announced on 14 May 2006 that it had agreed to remove the one per cent legislative cap. That is a matter of record. That decision stands but, as I said, it is a question of considering further submissions from key stakeholders. Six months is not a particularly long time in the scheme of things when looking at this sort of area. I cannot take it any further than that.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Senator Bartlett, let me clarify that it is the case that it was a discussion paper, and I accept that it was also a cabinet decision. I might have left that out of my chronology. The point I ended up with was that it is a government decision that should be acted upon. They should bring forward legislation; you are right about that. It is not a part of this package. It is disappointing that the government is dragging its heels but, be that as it may, we do not have it before us, and it does not change the Labor Party’s position.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

In conclusion, I recognise that it is not part of this package, but the point is that it was part of the government’s package. It was part of the whole package that was announced back in May, and it should have stayed in the package. And it is completely appropriate for the Senate, as a legislative body, to put it back in the package.

The minister says that six months is not that long to consult with stakeholders. That was what the whole discussion paper was about. I recall being at Waterfront Place in Brisbane when Minister Ruddock gave the speech when he launched the discussion paper—along with, I think, one or two other discussion papers—back around, I think, the start of 2005. It is something that has been going for a lot longer than six months. In fact, for quite a period prior to that discussion paper being launched, nearly two years ago, it was a matter for debate. So the statement, ‘It has only recently been decided and we’ve still got to work through some of the detail,’ is pretty flimsy, quite frankly. There has been plenty of time to work through the detail. And, as I said, it is far less complex and much more clear in its consequences than a lot of what we have been dealing with and will continue to deal with with other aspects of the legislation.

Be that as it may, I am obviously not going to get satisfaction this evening. I simply put on the record that the Democrats certainly will not let the matter rest. I note the minister’s comment that the government’s decision has not changed. We will continue to use the Senate’s role as a law-making body to keep this issue on the record, whether through a private senator’s bill or something else. It is simply a matter of a fair go. Nobody else in the community would accept having their income constrained with some sort of salary cap on what they are allowed to earn.

Particularly when it is about earnings through an industry that is clearly profitable, like the commercial radio industry is, one has to wonder what other deals, agreements or swaps might be going on around in the backroom somewhere, given the inability to have any more clarity from the government about what is going on. As to whether this was part of some other agreement that has been sacrificed to allow the broader media reforms through, I guess people can always speculate about those things. But the problem is that, unless the government can be more clear and open about what on earth is going on, people obviously will speculate about what the real agendas and motivations are and why the heels are dragging on this. Frankly, that is a less than ideal situation.

Question put:

That the amendments (Senator Bartlett’s) be agreed to.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

The opposition opposes schedule 6 in the following terms:

(27)  Schedule 6, Part 4, page 107 (lines 2 to 36), TO BE OPPOSED.

I have already spoken to this. It deals with fair dealing for research and study. I will not take time to reiterate the arguments that I have already made about that. The government’s paltry opposition to it did not really make it, but I will move that motion based on the arguments that I have already made.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

The government opposes this motion, which would omit the proposed amendment in the bill of section 40, which is on copying that is deemed to be a fair dealing for research or study. As Senator Ludwig has said, we have gone through the arguments pretty extensively, and I will not add to them.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

The question is that part 4 of schedule 6 stand as printed.

Question agreed to.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

The opposition opposes schedule 8 in the following terms:

(28)  Schedule 8, item 8, page 119 (line 32) to page 120 (line 6), TO BE OPPOSED.

This motion is about insubstantial copying or cherry picking. The main committee report from the Senate Standing Committee on Legal and Constitutional Affairs recommended that the government consider the possibility of amending the proposed subsection 135ZM(B)(5) in schedule 8 of the bill so that insubstantial copying of works and electronic works need not be continuous. The government in this instance did not accept this recommendation. You considered the provision technologically neutral. You backtracked on it from your original position. The position that Labor has put forward is a more sensible position. I will not go to the detail. It is plain that the government has not looked at recommendation 11 in any meaningful way. There is still a problem in this area and the government should be encouraged to accept our motion. It would improve the overall bill. I recognise that this is a position which the government has not picked up. It would be helpful if the government picked up the recommendation. I recognise that I probably do not have the numbers in this chamber, so I will not take up a substantial amount of time arguing for it. Simply put, it would be a much better than the position the government has got to.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

The government opposes this motion, and this will come as no surprise to the opposition. This provision implements a recommendation of the Phillips Fox digital agenda review. This provision is one that the government cannot see any way to support. In any event, there has been adequate discussion tonight on these matters.

The Temporary Chairman:

The question is that item 8 of schedule 8 stand as printed.

Question agreed to.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

I move opposition amendment (29) on sheet 5133 revised:

(29)  Schedule 12, item 1, page 184 (line 15), omit subparagraph (a)(ii) of the definition of access control technological protection measure, substitute:

                  (ii)    prevents, inhibits or restricts the doing of an act comprised in copyright; and”.

                  (ii)    prevents, inhibits or restricts the doing of an act comprised in copyright; and”.

This is a very important amendment; it seeks to change the definition of a technological protection measure to ensure that TPMs, as they are known for the purposes of this bill, are linked to the protection from copyright infringement. I want to pick up my comments on TPMs where I left off in my speech in the second reading debate. As I was saying, the bill purports to close off some of the more obvious examples of TPMs that are not designed to prevent infringement of copyright but, indeed, designed to exploit market power. New exceptions have been created to prevent market segmentation and abuse of spare parts markets. Both of those exceptions are welcomed.

However, I think it is in a pretty sneaky and unforgivable way that the Howard government has determined to remove the link between the use of TPMs and the protection of infringement of copyright in the definition of a TPM in a bill. The definition of a TPM proposed in this bill has the effect of giving corporations who own copyright the ability to use that power under the Copyright Act to protect business models—not copyright. No link to copyright protection will be required. I think this represents an anti-free-trade and anti-open-market position. I am very disappointed that there has not been more of an explanation from the government about why they have taken this position. To me, and to a lot of commentators and observers, this seems to be about protecting incumbent operators in the market at the expense of new market entrants, and it is therefore anticompetitive.

To say what we are debating here has significant ramifications is an understatement. This is a substantial power shift in favour of copyright holders—but only those that are big and powerful enough to pursue a comprehensive TPM strategy. Technological protection measures are not simple things and they require a lot of resources. We are not talking about copyright owners who are creators or artists; it is the companies that have the global distribution rights of the copyrighted material. Unfortunately, this is part of a pattern of the Howard government. This government is very happy to do these things at the behest of the big end of town. It is a form of patronage that we are now seeing reflected in this aspect of this bill, and it is further evidence of a whittling away of the capacity of smaller innovators and technologists to come up with new technology solutions and new innovations.

It is interesting to note that the exposure draft of this bill did not have this deficient definition. In fact, it contained a definition that kept the link between the use of TPMs and protection from copyright infringement. It is worth noting that the government majority House of Representatives review of technological protection measures—they had a whole review of it in the House—came up with the following recommendation:

The Committee recommends that, in the legislation implementing Article 17.4.7 of the Australia-United States Free Trade Agreement, the definition of technological protection measure/effective technological measure clearly require a direct link between access control and copyright protection.

That was the House committee. I think, to their serious credit, government senators on the Senate Standing Committee on Legal and Constitutional Affairs also recommend a return to this original definition. Two parliamentary committees and one exposure draft agree with Labor’s amendment.

This issue attracted a lot of attention at the disgracefully brief Senate inquiry, and we heard conflicting evidence of legal opinions—some said that the definition of the TPM in the bill we are debating was required to satisfy the free trade agreement requirements, and we heard evidence and legal opinions that in fact the exposure draft definition was required to satisfy our obligations under the free trade agreement. So we got it from all sides. Labor and Liberal senators on the committee were both convinced that the intent of the free trade agreement and its rather vague wording permits the definition that contains the link and that such a definition adequately fulfils our obligations.

I cannot speak for the Liberal senators’ reasoning, but Labor has been convinced of the need for the link to exist, on the basis of maintaining the integrity of the purpose of the laws: to protect copyright. In addition, we heard advice that, in fact, that definition was the only definition that would satisfy the free trade agreement.

We asked at the Senate committee hearing whether the department had received advice in the time between the exposure draft and the bill, and the department informed the committee that they had received advice that led them to unlink the TPM definition and the protection from copyright infringement. The Senate committee requested and received, I presume, at least some of this advice—and key aspects of it confirmed Labor’s fears that this push to change the definition was indeed to protect future business models of incumbent players.

It is important to note that this advice was provided to the committee on the condition that it was kept in confidence, and this was claimed because of the commercial sensitivity of the advice—because it was all about business models! I think it is obvious that the government has been got at, and it is fair for me to ask the minister on what specific basis they changed their minds. I would also like to ask whether they received any representations from US interests or, indeed, the US embassy.

It is also important to refute claims by AFACT, representing the Motion Picture Association and other copyright holders and distributors, that the exposure draft did not in fact comply with the free trade agreement. I would like to refer to evidence presented to the Senate inquiry from Professor Brian Fitzgerald et al in response to a direct question by Senator Ludwig. Senator Ludwig’s question was: what is your response to evidence from the department that the AUSTFA requires the TPM provisions to be drafted as they are currently drafted—that is, incorporating a linkage to copyright infringement would not meet the requirements of the free trade agreement? A summary of the answer provided by Professor Fitzgerald was that the incorporation of a link to preventing or inhibiting copyright infringement in the definition of TPM and access control TPM is supported by the text of the AUSTFA, the findings of the Office of International Law, the findings of the House of Representatives Standing Committee on Legal and Constitutional Affairs and US case law. Professor Fitzgerald expanded on this by asserting that:

The Attorney-General’s Department response to the committee is not an obstacle in this interpretation. In substance the article cited by the Attorney-General’s Department—that is, 17.4.7(d)—prevents Australia from requiring copyright owners to prove that an actual infringement has occurred; for example, that someone has actually copied the work to obtain protection under the TPM provisions. It does not limit the definition of TPM or prevent Australia from enacting laws that require a copyright owner to prove that a technology was designed to prevent or inhibit copyright infringement for it to be a TPM.

Finally, the professor cites two principal statements in the free trade agreement which prescribed the boundaries of the definitions of technological protection measures and access control technological protection measures under domestic law, and these are articles 17.4.7(a) and 17.4.7(b). Article 17.4.7(a) insists on a connection with the exercise of copyright owners’ rights. Article 7A says:

... in order to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that authors, performers and producers of phonograms using connection with the exercise of their rights—

that is the key phrase—

and that restrict unauthorised acts in respect of their works, performances and phonograms.

‘And’ is obviously a key word in that interpretation. Article 7(b) defines an effective TPM as including both devices that protect copyright and devices that control access to a work. It states:

An effective technological measure means any technology device or component that in the normal course of its operation controls access to a protected work, performance, phonogram or other protected subject matter or protects any copyright.

The key word in the phrase ‘or protects any copyright’ is ‘or’. But the opinion of Professor Fitzgerald and his colleague Mr Dale Clapperton submitted that in taking both 17.4.7(a) and (b) into account the correct interpretation of article 17.4.7 requires a direct link between any effective TPM and the prevention of copyright infringement. Labor agrees. The impact of the government’s definition is not only an abuse of copyright law; it also creates massive disincentives for software innovation. Combined with inadequate exceptions to permit the development of interoperable products, the threat of criminal offences is enough to prevent the development of such interoperable products.

I will speak briefly to Labor’s next amendment, which looks at inserting another inclusion into the definition of computer programs. Interoperable products allow consumers genuine options in their use of software and create alternative non-proprietary products. This is important to ensure that the perpetuation or emergence of monopolies is avoided. This is particularly important for innovators in the open source area.

We will be moving an amendment for an exception to permit the development of not just interoperable computer programs but the data as well. That is Labor’s next amendment. Without this exception data can be locked up and access denied without the use of proprietary products. Even if the data itself was not copyright protected, which is quite absurd, it defies archiving principles.

My colleague Senator Ludwig has just suggested that we move the two remaining opposition amendments together—that is, opposition amendments (30) and (31). I seek leave to do that.

Leave granted.

I move opposition amendments (30) and (31) on sheet 5133 revised:

202B Contractual evasion of technological protection measures

I turn now to opposition amendment (30). Including data in this definition and exception to allow computer interoperability as a legitimate reason to circumvent a technological protection measure overcomes a particular concern of experienced technologists in the area, whereby without the definition of data being included in that way it is quite possible for interoperable computer programs to be produced but the data to be unavailable because it is stored in a proprietary format. This is particularly true not when the data itself has any copyright protection but when in fact the format in which the data is stored becomes inaccessible if it is not available through that interoperability exception.

The issue of the interoperability of data is an important one, and I am familiar with the Commonwealth government’s archiving policies in this regard. A great deal of effort has been put in by the National Archives to promote the use of data formats and storage formats that are open sourced—that are accessible. The issue for them is very much that the Commonwealth ought not to be locked into licensing arrangements surrounding proprietary software and/or data standards to access that content in the future. Without those open standards or the ability to interoperate with both the programs and the data itself, serious commercial disadvantage and public policy disadvantage can be inflicted. (Time expired)

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

The government opposes opposition amendments (29), (30) and (31) and does so for a variety of reasons. Firstly, in relation to whether the technological protection measures are anticompetitive, our answer is a clear no. As noted by Senator Lundy, the bill contains a broad exception from liability for circumvention where a TPM has an anticompetitive impact on the availability of spare parts and services. It also contains exceptions allowing for the creation of interoperable software and other articles. These exceptions will ensure that the provisions will not lock in existing players but will allow the evolution of technology. I think that is an important aspect in relation to the TPMs.

In relation to the consideration of the views of the United States on TPM issues, I can say quite clearly that the United States contributed its views to this discussion as much as any other stakeholder. We talked to domestic stakeholders, both copyright owners and users, and we spoke to the United States as well. When we have a free trade agreement, we have to ensure that we comply with the treaty that we have signed. There is nothing untoward in that. Of course we discussed the matter with the United States like any other stakeholder.

Amendment (29) is opposed on the basis that schedule 12 of the bill, which is in line with the Australia-US Free Trade Agreement obligations, has been the subject of substantial consultation. I think that has been the hallmark of the process in relation to the drafting of this bill. In response to the exposure draft of the TPM provisions, both copyright users and owners sought greater clarity and simplicity in the operation of the definitions. They also sought certainty on the issue of geographic market segmentation. The government listened to the views of all stakeholders and created a definition that will enable owners to safely make copyright materials available online, while also ensuring user certainty over the important areas of region coding and the supply of aftermarket goods and services. It does not require an everyday consumer to make a determination about whether their computer makes copies when they access websites or use computer software. We believe Labor’s amendment will put uncertainty back into the TPM definition. The amendment, we believe, will stifle the development of online distribution of copyright material, placing Australia at a disadvantage compared with the rest of the world.

Similarly, in relation to amendment (30), which deals with the TPMs exception for the development of interoperable computer programs, the government does not support this amendment for the reason that the amendment is unnecessary. We believe it does not bring greater clarity. The TPM scheme cannot be used to prevent individuals or businesses from using existing data with new computer software. The definition of a TPM requires that a TPM be placed on material in which copyright subsists by or on behalf of the owner of the copyright. A software company that prevents customers from using their own copyright material in the form of data by the application of a TPM would not be protected by the scheme. Even if the software-inserted copyright material belongs to the company with the customer’s data, the act allows the customer as a copyright owner to authorise circumvention of a TPM that prevents access to the customer’s data. Aside from that, we believe Labor’s amendment would provide little additional assistance to those involved in the creation of interoperable programs, as it only applies to one of the six types of liability under the bill. It would not allow dealings in circumvention devices or services to be used for the purpose of whatever additional activities it is trying to address, nor would it provide any exceptions to criminal activity.

Opposition amendment (31) involves the contractual evasion of technological protection measures. Again, the government does not support this amendment for the reason that the relationship between contracts and exceptions is not confined to the TPM scheme. The issue of contractual override of copyright act exceptions is relevant for the act as a whole. How could the opposition show that its amendments will not have the unintended or unfortunate effect of implying that every other exception in the act can be overridden by contract? I think this issue is a very complex one in relation to the contractual evasion of TPM measures. We believe that this requires more policy consideration and is something which we can look at as the legislation is bedded down. I think that those reasons spell out why the government cannot support the three Labor amendments.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

Going to the issue of contractual evasion, this has been previously raised, I think in the law review, and it has popped up in the inquiries. It relates to the way in which consumers are treated. The problem is this: many people know that when they open a new application or purchase new software they are required to tick a box that says that they have read a very long, complicated and convoluted contract. The theory is that this is a contract that is somehow negotiated between the consumer and the company, and it has the effect of overriding law that is in statute. The reality, however, is that of course consumers have no power to vary the terms of the contracts that have this overriding effect. So, in general, they are completely disempowered. We are concerned that, because of the criminal liabilities associated with some of these penalties, that again puts consumers at a disadvantage. Indeed, it allows copyright holders to escape their responsibilities as well and fails to protect their interests.

But I do not want to spend time on that. I want to spend time on the substantive amendment, which I believe is the one that relates to the TPM. I am highly intrigued by the minister’s statement that of course the government consulted US stakeholders. I am actually flabbergasted, because the time for doing that was during the negotiation phase of the free trade agreement, which laid out these clauses that we are now trying to interpret for the purposes of Australian law, in the Australian parliament. Why on earth did US interests get a say?

I can understand that AFACT represented the Motion Picture Association and all the global corporations, and some of them might be US interests, but I do not think it is appropriate that the US made representations on how on earth this parliament should interpret the agreement for the purposes of this bill. That is outrageous. I seek some more clarification on that because our job with this bill—and this is completely timely; we have to pass some legislation prior to 1 January to fulfil our obligations under the Australia-US Free Trade Agreement—is to make law that is compliant with that agreement, not to ask the US what they think. Perhaps the wording was too vague for their liking or they had their own corporate interests ask them to toughen it up a little bit. I think those arguments have no right to influence how we determine what is suitable for Australian law, particularly since we have seen evidence of international interpretation of this law. I referenced it earlier: the Office of International Law and, indeed, according to Professor Fitzgerald and others, US case law have determined that that link ought to apply.

I suppose this is where the outrageousness or audacity of the government’s decision to drop this link really comes to the fore. I think the minister has basically confessed that it has been at the behest of US interests—not Australian interests and certainly not Australian consumer interests—to change this link. We are setting an appalling precedent whereby the Copyright Act, copyright protection measures, TPMs and all those things can now be used to protect a business model, and that can be their motivation. That is just not right. It is certainly not right given the circumstances in which we find ourselves debating this, which is supposed to be the interpretation of the free trade agreement into Australian law.

I go to another statement that the minister made: that the amendment that Labor has proposed, to re-establish that link, is somehow creating more uncertainty. I noticed only one group that asserted that: AFACT, again on behalf of the Motion Picture Association—indeed, on the basis that they came up with a whole list of unintended consequences that were, quite frankly, ludicrous and designed to confuse and muddy the debate. I do not think there were unintended consequences, not when we have all the other legal advice pointing us in the other direction. So uncertainty is a very weak and implausible justification for making this change. I again put to the government that the ramifications of this are perhaps far more serious than even they realise. Perhaps in their naivety, to give them the benefit of the doubt—perhaps they are not just complete puppets—they accepted these opinions and changed it.

I foreshadow now that this will be highly problematic. It will be heralded around the world as an important development on behalf of the further exploitation and diminution of the integrity of copyright law, and then other places will seek to emulate it as well and Australia will be seen as a weak and ill-informed jurisdiction in this regard. It is a very sensitive issue. People watch this type of law around the world with great interest because a lot is at stake. Ultimately, as I said before, it is about anticompetitive conduct and locking up content in unreasonable ways, not for the purposes of protecting copyright infringement but for protecting business models, and that means protecting new ways to gouge consumers and inhibit consumers from using content that they have legitimately purchased. That is not the direction in which we ought to be going. It does not represent a balance between the interests of creators and the interests of consumers; it puts that balance firmly in favour of copyright holders and distributors.

I also do not accept the government’s explanation with respect to the word ‘data’. I think that is a quite reasonable expansion of that exception. My interpretation of what the government said is that data would in fact be rolled into their definition anyway, so I think they are just being pig-headed about not supporting this amendment—perhaps because they did not think of it. I think that is highly unfortunate as well. I will leave it there.

Finally, I want to stress that the minister’s assertion that there was substantial consultation on this point was absolutely false, particularly because the exposure draft contained the link. That was heralded by everyone except, obviously, AFACT and US interests. There was not substantial consultation on the current wording of the bill. They snuck it out with the final bill, and many people did not see it until the bill hit the deck in this place. That is not substantial consultation. It is basically being sneaky, and I think that is unforgivable, particularly in this circumstance.

I will close my comments by reminding senators that the purposes of copyright law in the first instance are to protect the interests of the creators of new works in such a way that there is a financial incentive for them to keep creating and a return on their own investment in time and effort to make it all worth while. I think there are many aspects of this bill where that has probably been lost sight of, but this particular definition is a complete departure. That is an unwelcome precedent with respect to copyright law that I think will undermine the integrity of these laws in Australia.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I want to make one thing very clear. Whilst the US made submissions, it did not enjoy any position which was more advantageous over other stakeholders and those submissions that were put to the government. Whether or not we listen to what the US says is another matter, but I can assure you that the policy that we have developed has been policy which the government firmly believe is in the best interests of Australia and no-one else.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I presume we all want to get this wrapped up one way or the other by 11 o’clock this evening, so I will not talk for an excessive length of time, but I do want to put a couple of points on the record on behalf of the Democrats. I do not have a problem with governments listening to views from the US, Kazakhstan or anywhere else. The point is, though, that it is clearly the US view that has been adopted by the government, and I do have a problem with that. Everyone has a right to put in a view from anywhere, but the concern I have is that it is the US view that has been adopted. Again, before the cheap shots come out, that is not an anti-American comment. If we were talking about wheat then we would be horrified about giving the Americans any advantage, but in this area giving the US an advantage does not seem to be a problem. I read from paragraph 3.139 of the majority report of the Standing Committee on Legal and Constitutional Affairs:

The committee accepts the Department’s explanation of the need to ensure compliance with the AUSFTA. However, the committee notes the apparent divergence between the view expressed by the Department in the course of the inquiry—

into the legislation as it now stands—

and other previous interpretations of the AUSFTA put forward by the Department and the Federal Government.

That is why it is legitimate to ask the question: what has changed? Why is it that even under the department’s own reasoning, under their previous exposure drafts, there was a particular interpretation that was seen as consistent with the free trade agreement, and then suddenly at the last minute it was changed—the change in relation to the link between prevention of the infringement of copyright and TPM of the Copyright Act that occurred—particularly when it seems clear that this will tilt the balance further towards the US side of the argument? It is also a reminder that in this debate, as in many other debates, words are not what they seem a lot of the time.

When we are talking about terms like ‘free trade agreement’ and people like the Democrats express concern about it, that does not mean that we are anti free trade any more than it means that we are anti the USA. The concern, as was made clear by people back when there were committee inquiries into the free trade agreement, is that in many respects it is actually anti freeing up of trade—it is anticompetitive. To some extent you could say all copyright is anticompetitive. As I have said all the way through this debate, you are always faced with having to balance competing interests. The fact is the approach the government is now taking in regard to technological protection measures, at least on many people’s interpretation, goes beyond protecting our copyright to an anticompetitive measure more broadly. That is undesirable. I do not think there is any doubt that the free trade agreement, as it was agreed to by the Australian government and indeed, I might say, by the ALP, has components—not the whole thing, but components—that are anticompetitive and anti freeing up of trade. But that is, I suppose, revisiting a debate that we had a couple of years ago.

In pointing out that the ALP supported the Australia-US Free Trade Agreement after a couple of, frankly, fairly minor last-minute amendments put forward by the then leader, Mr Latham, does not negate the validity of the argument that Senator Lundy is making now. We all accept that the Australia-US Free Trade Agreement is in place, for better or worse, and I am not saying it is 100 per cent bad by any means. We certainly all therefore accept that, under the terms of that, we have to ensure that this aspect of our legislation is compliant with it by the end of this year. But within that, there is still leeway. There was leeway in respect of what the wording was in the exposure draft. That has been modified by the government. I think it is completely appropriate for questions to be asked, as Senator Lundy has, as to quite why that change was made. I also agree that the reasons given have not been particularly convincing.

Having said that, as is the case with much of this legislation and certainly this section as the committee inquiry demonstrated and the committee report noted, these are technical and complex provisions. There were different views put forward about this particular point and whether there is a link to copyright infringement and, indeed, how it portrays itself in the free trade agreement or in US law let alone in this legislation. I will conclude by going back to the point I started at in my first contribution this evening. It is not always clear who the winners and losers are out of all these changes, but I think it is a fairly safe bet that one group that will be the winners, at least for the next few years, will be the lawyers. To some extent that is unavoidable. Everybody will be testing the limits of what all this means with all of these changes.

I think we could have done a better job than we have, though frankly it is amazing that we have done as good a job as we have given the time frame. I think it is worth noting and giving some positive recognition to the government for taking on board, at least to some extent, the concerns that were raised from various people in the community. I particularly commend the work of the senate legal and constitutional committee. My views are not the same in totality as those the government members or the ALP members of the committee put forward but I do think, given the outrageously short time frame, the committee did an extraordinary job and those people that provided input to the committee did an extraordinary job.

I suppose if there is one example of the benefits of all this newfangled technology, then we are out of the era of 78 records, flexible LPs, eight tracks and all those things and into digital technology and CDs, past the wireless. There is simply no way we could have done it in that sort of time frame even a few years ago. The ability of people to put arguments online and to transmit data very quickly to try to get amendments up and scrutinise them very quickly using all this new technology is, frankly, the only way that we had any hope of being able to deal with the legislation and the large package of changes that the government has put forward including their further 80 amendments this week. But I still fear that we have come short of where we should be because of an unnecessarily truncated time frame. It seems frustrating after literally years of consultation that in the last couple of days so many things have to be rushed through when there is not the need to do so. In schedule 12 of the bill that these amendments go to, it is necessary to do so, and I accept that. Like Senator Lundy, I just do not accept some of the content of that schedule and I think these amendments do a better job of addressing those concerns.

Question put:

That the amendments (Senator Lundy’s) be agreed to.