Christmas has come early for copyright owners in Australia. The film company, Roadshow, the pay television company Foxtel, and Rupert Murdoch’s News Corp and News Limited–as well as copyright industries–have been clamoring for new copyright powers and remedies. In the summer break, the Coalition Government has responded to such entreaties from its industry supporters and donors, with a new package of copyright laws and policies [pdf].

There has been significant debate over the proposals between the odd couple of Attorney-General George Brandis and the Minister for Communications, Malcolm Turnbull. There have been deep, philosophical differences between the two Ministers over the copyright agenda. The Attorney-General George Brandis has supported a model of copyright maximalism, with strong rights and remedies for the copyright empires in film, television, and publishing. He has shown little empathy for the information technology companies of the digital economy. The Attorney-General has been impatient to press ahead with a copyright regime. The Minister for Communications, Malcolm Turnbull, has been somewhat more circumspect, recognizing that there is a need to ensure that copyright laws do not adversely impact upon competition in the digital economy. The final proposal is a somewhat awkward compromise between the discipline-and-punish regime preferred by Brandis, and the responsive regulation model favored by Turnbull.

In his new book, Information Doesn’t Want to Be Free: Laws for the Internet Age, Cory Doctorow has some sage advice for copyright owners:

Things that don’t make money:

• Complaining about piracy.
• Calling your customers thieves.
• Treating your customers like thieves.

In this context, the push by copyright owners and the Coalition Government to have a copyright crackdown may well be counter-productive to their interests.

The Internet Filter

The proposal to give copyright owners the power to block websites is highly controversial. The Australian Government have devised a local version of the Stop Online Piracy Act–nicknamed #SOPA. There is a concern that such a power will interfere with civil liberties, traditional freedoms, and Internet rights. There is also an anxiety that copyright trolls will abuse such a scheme. The Australian Government has not explained what safeguards and protections will be in the bill.

Malcolm Turnbull has been super-sensitive to criticisms of the copyright regime. He was incensed by questions from the Fairfax journalist Ben Grubb about whether the legislation was an internet filter:

That’s nonsense Ben. There’s no internet filter here at all. What on earth are you talking about? What we’re, look, what we are simply doing is proposing to amend the ? we’re going to amend the Copyright Act to make it more straightforward for rights owners to do what they can do now, which is to seek an order that access be prevented’ to a site that is infringing content. Now the reason for the legislative provision is to make it available, is to enable you to get a remedy against an ISP -in other words to get an order against an ISP whose costs would have to be covered and so forth to block access to an overseas illegal download)?, uh, pirate site. I’ll just use the word pirate because it’s easy we understand what we’re talking about. So if you have, you know, bengrubbdownloads.com.au in Australia and you are happily streaming, you know, unlicensed copies of movies, then this amendment would have no relevance to you because the rights owners can go after you directly.

Critics of the regime have been unconvinced by such sophistry, and have been of the view that blocking websites amounted to an internet filter.

Professor Dan Hunter from Swinburne University has commented that blocking websites is bad for Australia’s digital economy. He observed that ‘a poorly drafted law will inevitably be used to threaten Australia’s nascent cloud computing industry, because cloud storage is where a large number of infringing files are found these days.’

The Copyright Code

The Australian Government has given an ultimatum to internet service providers to co-operate with copyright owners or else. If internet service providers refuse to co-operate within four months, the Australian Government will be able to impose its own industry scheme. The Ministers explained:

The Attorney-General and the Minister for Communications have written to industry leaders requiring them to immediately develop an industry code with a view to registration by the Australian Communications and Media Authority (ACMA) under Part 6 of the Telecommunications Act 1997. The code will include a process to notify consumers when a copyright breach has occurred and provide information on how they can gain access to legitimate content. The Minister and the Attorney-General expect strong collaboration between rights holders, internet service providers (ISPs) and consumers on this issue. A copy of the letter to the industry leaders is attached. Failing agreement within 120 days, the Government will impose binding arrangements either by an industry code prescribed by the Attorney-General under the Copyright Act 1968 or an industry standard prescribed by the ACMA, at the direction of the Minister for Communications under the Telecommunications Act.

Such a proposal involves a striking combination of copyright law and media law. Internet service providers face a Hobson’s choice–they can either submit to an industry code with copyright owners in a short time frame, or else have the Federal Government impose an industry code upon them.

Dr. Nicolas Suzor and Eleanor Angel from Queensland University of Technology have provided an incisive analysis of the regime:

ISPs and copyright owners have 120 days (over the holiday period) to come to agreement on an issue that they have been at loggerheads over for the past five years. The government hasn’t given ISPs much negotiating power, either. The clear threat is that if ISPs don’t give the industry what it wants, the government will do it for them. These types of industry codes can be an effective way to regulate, but the only way they will reflect the overall public interest is if consumer groups are also given a seat at the negotiating table. We also need transparency and continual monitoring to ensure the scheme is not being abused, and public interest groups must have the power to effectively protect end users. In this proposal, consumer groups are not invited, and rightsholders hold all the power.

The Coalition Government’s tactics and strategies in this area are crafty. Professor Susan Sell has highlighted the use of soft power in copyright policy-making. This is a classic instance of trying to use industry codes and private agreements to achieve copyright goals. There will be much debate over whether the new scheme will constitute an Internet Tax.

Consumer Rights

Australian consumers have been let down by the copyright proposals. There is no defense of fair use, even though such a defense had been recommended by the Australian Law Reform Commission. There is no policy action on IT pricing rip-offs by copyright owners and information technology owners. Furthermore, the Government has failed to provide for a general safe harbor for intermediaries. As a result, Australian consumers are third-class citizens in the digital economy–lacking the rights and privileges of their counterparts in the United States.

The Coalition Government has not extended the safe harbor for intermediaries such as search engines, social media, and internet video sites. Malcolm Turnbull noted: ‘Given that this is related to broader issues than just online copyright, this proposal will not be pursued at this time.’ He stressed: ‘The Government expects that schools, libraries, search engines and wifi providers will continue to take steps to reduce online copyright infringement on their systems.’ Such a decision represents a public policy failure for Google–which had been heavily lobbying the Federal Government for an extended safe harbor. Google’s Digital Alliance has protested against the decision. However, the Coalition Government has shown little sympathy for Google and other information technology companies–especially given the scandal over tax avoidance in the new economy. Moreover, the Coalition Government has been keen to please Rupert Murdoch–who has called Google ?Kleptomaniacs? in the past.

Nonetheless, such an approach to intermediary liability in respect of copyright law is of concern. It is outrageous that Malcolm Turnbull expects that schools and libraries will be copyright cops and police copyright infringement on their networks. Such a proposal will interfere with the mission of schools and libraries to provide access to knowledge.

Although the Coalition Government emphasized that timely access to affordable copyright content was key to addressing copyright infringement, the policy package provides no legislative or administrative proposals to address that issue. Turnbull sought to explain why the Coalition Government had not responded to the IT Pricing inquiry: ‘The Inquiry raised significant public awareness of the issue of price disparity and brought to the attention of Australians a range of options and opportunities available to level the playing field.’ He noted: ‘The Government agrees that Australian consumers should be empowered to seek out goods and services at the best available price, consistent with the measures being introduced for online copyright.’ Turnbull observed that ‘there are also a number of other processes underway within Government including the Competition Policy Review (the Harper Review) and the Government’s consideration of its response to the Australian Law Reform Commission’s report into Copyright in the Digital Economy.’ While the Coalition Government has deferred its response to the IT Pricing inquiry, it has rushed ahead with its proposals to enhance the rights and remedies of copyright owners.

Political Responses

In response, the Australian Labor Party has lambasted the proposal. In a powerful critique, Jason Clare MP has maintained that the Abbott Government does not understand the Internet:

The Abbott Government has made it clear it doesn’t understand the internet or its users. Senator Brandis demonstrated this with his complete inability to explain metadata earlier this year. Malcolm Turnbull is about to buy an ageing copper network because he thinks that by 2023 the median household in Australia will only require 15 Mbps.

Jason Clare argued: ‘It is clear that action is needed both to deter piracy, and to encourage access to legitimate content.’ He also wondered whether the proposals of the government would be effective: ‘Site-blocking is unlikely to be an effective strategy for dealing with online piracy’. Jason Clare maintained that ‘the Government has passed the buck back to industry, asking rights holders and ISPs to reach an agreement among themselves’. He contended: ‘Any crackdown on the infringement of copyright needs to be accompanied by changes to make copyright law fairer, clearer, and more in keeping with public expectations’. In his view, ‘The Government should look after the interests of consumers.’

The Australian Greens have also been highly critical of the copyright proposals of the Coalition Government. Senator Scott Ludlam has commented:

The Greens will not support amendments to the Copyright Act to allow rights holders to apply for a court order requiring ISPs to block access to a website. Such a move would be a defacto Internet filter and would allow rights holders to unilaterally require websites to be blocked. This kind of Internet filter would not be effective at all, due to the widespread availability of basic VPN software to evade it.

Senator Ludlam was also of the view that the ultimatum for a copyright code was unjust: “The Australian ISP and content industries have continuously failed to successfully negotiate a shared approach to copyright infringement over a period of at least three years, due in large part to the unwillingness of copyright holders to be flexible in their position.” He observed: “In this context, the Government’s requirement that a joint code be developed within 120 days is farcical.” In his view, “This is not enough time to develop a code.” Senator Ludlam lamented that “the Government has not specifically allocated a role for public interest organisations to have a place at the negotiating table,” even though “users will be the ones most affected by this new code.” He concluded: “Any industry code will be easily evaded by copyright infringers and will not address the real issue: The lack of timely, affordable availability of content in Australia, which other markets such as the US already enjoy.”

CHOICE Australia–the leading consumer rights’ group in Australia–was also disappointed by the copyright proposals. Alan Kirkland was wary of ‘an industry-run internet filter to block ‘offending’ websites’. He commented:

We know that internet filters don’t work. This approach has been called ineffective and disproportionate by courts overseas, and it risks raising internet costs for everyone.

Kirkland said that there was a need to fix the availability, and the high prices in respect of copyright works.

The Communications Alliance has been cautious about the Coalition Government’s copyright plans.

Pirate Party Australia has denounced the new copyright regime. President of the Pirate Party, Brendan Molloy, has commented:

This proposal is effectively the beginning of an Australian version of the failed US Stop Online Piracy Act. Notification schemes, graduated response schemes and website blocking do not work. They are costly, ineffective and disproportionate, as evidenced by academia and decisions of foreign courts. Fighting the Internet itself as opposed to solving the lack of convenient and affordable access does not work, nor does propping up business models that rely upon the control of content consumption in the digital environment.

Deputy President, Simon Frew, added: “Website blocking is censorship, plain and simple.” He commented: “By ignoring the IT Pricing Inquiry and numerous submissions to different reviews that Australians are regularly paying more and waiting longer for content, the Coalition is looking to enact a legislative dinosaur that will be easily bypassed by savvy Internet users in seconds.”

The Institute of Public Affairs has also expressed reservations about the proposed copyright regime. Chris Berg commented:

The government’s proposal to block websites that infringe copyright is an internet filter and a threat to free speech. This is nothing more than an internet filter, of the sort which the Coalition proudly opposed when it was proposed by the Rudd and Gillard governments. There is no reason to believe that this will reduce copyright infringement in any material way.

Such criticism is notable–given that the Institute of Public Affairs is often an ally and a friend of the Coalition Government, across a range of policy fields.

The Future of the Internet

It will be interesting to see what the Australian Senate will make of the Coalition Government’s proposals in respect of a copyright crackdown in 2015. The Australian Senate has been compared to the Star Wars’ Cantina–such is its diversity and variety. Much will depend upon cross-benchers like Nick Xenophon, the Palmer United Party, Family First, the Liberal Democratic Party, and various micro-parties and independents.

The Coalition Government’s copyright proposals will further enhance the private power of copyright owners in respect of the governance of the Internet. Bernard Keane worries: “We’ve thus arrived at the fully fledged war on the internet by this government that some of us have long been predicting, a war motivated by commercial interests and the never-satisfied greed of security agencies for more powers of surveillance and control, and a deep and abiding fear of what citizens will do with communications technology that is no longer controlled by governments.” This is disturbing. The Internet will be increasingly subject to the rule of private sovereigns. As Tim Berners-Lee says, we need a Magna Carta to protect an open and accessible Internet–rather than a copyright crackdown.

Dr. Matthew Rimmer is an Australian Research Council Future Fellow, working on Intellectual Property and Climate Change. He is an associate professor at the ANU College of Law, and an associate director of the Australian Centre for Intellectual Property in Agriculture (ACIPA).

Dr. Matthew Rimmer wrote up this week’s “review” post, and kept on writing, submitting this rather interesting take on last week’s State of the Union address which we thought many of you would enjoy.

Last week, President Barack Obama delivered his 2014 State of the Union address, discussing intellectual property, investment, and the protection of the environment.

Much like in his State of the Union Address in 2013, the President promoted his ambitious regional trade agenda – with the Trans-Pacific Partnership, and the Trans-Atlantic Trade and Investment Partnership.

The prospects of the trade deals, though, remain doubtful.

A grand coalition of civil society organizations has been formed to try to stop efforts to fast-track such trade agreements through the United States Congress.

On top of that, a large number of Democrats in the United States Congress have expressed concerns about the secretive nature of the trade agreements, and their potential impact upon labor rights, intellectual property, health, and the environment. Moreover, a number of Republicans have also been concerned about the proposed deals.

The President’s State of the Union address revealed a number of contradictions and paradoxes in the position of the White House on intellectual property and trade.

A.    Intellectual Property

In his State of the Union address, President Obama spoke about a global innovation race with respect to intellectual property:

China and Europe aren’t standing on the sidelines. Neither should we. We know that the nation that goes all-in on innovation today will own the global economy tomorrow. This is an edge America cannot surrender. Federally-funded research helped lead to the ideas and inventions behind Google and smartphones. That’s why Congress should undo the damage done by last year’s cuts to basic research so we can unleash the next great American discovery – whether it’s vaccines that stay ahead of drug-resistant bacteria, or paper-thin material that’s stronger than steel. And let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation.

There is a tension, though, between this domestic intellectual property agenda of the President, and the Intellectual Property Chapter proposed by the Trans-Pacific Partnership.

Techdirt has well-documented the problems of over-enforcement of intellectual property rights. Just last week there was much discussion about copyright trolls – with the Perfect 10 litigation. There have also been concerns expressed by Hollywood screenwriters about aggressive copyright enforcement and the impact upon an open Internet. There have been concerns about Prince’s threats of copyright infringement against bootlegs. Unfortunately, President Barack Obama did not grapple with the problem of costly, needless copyright litigation in the State of Union address.

There has been much debate about how best to address the problem of patent trolls. Techdirt has. in fact, offered a range of commentary upon a number of the proferred solutions.

The Intellectual Property Chapter of the Trans-Pacific Partnership revealed by WikiLeaks is liable to promote costly, needless litigation. The Chapter is focused upon boosting the intellectual property rights of transnational companies. There is little respect paid to other public purposes served by intellectual property. The copyright section of the Chapter seeks to export features of the Sonny Bono Copyright Term Extension at the behest of Hollywood studios, such as Disney. There are prescriptive provisions on technological protection measures and electronic rights management information. The Chapter seeks to strengthen the rights of trademark holders. The Chapter also aims to provide strong protection of patents – particularly with respect to pharmaceutical drugs. Moreover, the United States has been pushing for stronger criminal sanctions with respect to the disclosure of trade secrets. The regime provides an arsenal of measures with respect to intellectual property enforcement. There is a failure in the Trans-Pacific Partnership to deal with the problem of intellectual property litigation entities – such as copyright censors; trademark bullies; and patent trolls.

If President Obama is serious about addressing the problems of over-protection of intellectual property rights, he should revise the United States proposals for the Intellectual Property Chapter of the Trans-Pacific Partnership, accordingly.

B.    Investment

In his State of the Union address, President Obama argued that “New trade partnerships with Europe and the Asia-Pacific will help [small businesses] create even more jobs.” Arguably, though, the Trans-Pacific Partnership and Trans-Atlantic Free Trade Agreement are designed to boost Big Business, rather than Small Business. Indeed, there has been much concern about transnational corporations and industry associations making heavy political contributions, so that they can play a pivotal role with respect to industry advisory groups to the United States Trade Representative.

The Investment Chapter of the Trans-Pacific Partnership would appear to enable transnational corporations to challenge a wide range of public regulations which affect foreign investment. Big Tobacco has threatened to use investment clauses to challenge public health measures – such as the plain packaging of tobacco products and graphic health warnings. Agricultural biotechnology companies have been keen on deploying investment clauses against any GM food labeling measures. Big Pharma have used investment clauses to challenge drug patent laws – like those in Canada.

President Obama maintained:

Let’s do more to help the entrepreneurs and small business owners who create most new jobs in America. Over the past five years, my administration has made more loans to small business owners than any other. And when ninety-eight percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create more jobs. We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment, and open new markets to new goods stamped “Made in the USA.”

Lori Wallach of Public Citizen commented: “Corporate interests were fiercely lobbying for President Obama to dedicate serious time in this speech to pushing Fast Track and the Trans-Pacific Partnership in order to try to overcome broad congressional and public opposition to both, but instead he made only a passing reference that largely repeated his past statements.” She observed: “With almost no House Democratic support for Fast Track, a bloc of GOP “no” votes and public opposition making congressional phones ring off the hook, high-profile treatment of the issue was considered necessary to revive any prospect that Fast Track could be passed in this Congress.” Wallach stressed: “Opposition has been growing to the massive Trans-Pacific Partnership deal. Implementing this NAFTA-on-steroids deal would undermine Obama’s efforts to battle income inequality.”

Professor Jane Kelsey from the University of Auckland wondered whether the speech marked a muted response by the president on trade deals. She said: “There has been enormous pressure from all sides in the lead-up to this speech, and the low-profile approach is seen as a signal that Obama thinks he cannot deliver.” Kelsey noted: “Whatever happens between the US and Japan, there seems no prospect of Fast Track, and hence no chance of a deliverable deal before the end of the year – unless governments are going to gamble on Congressional approval of the final treaty.” In her view, “It is time for them to stop wasting money and formally suspend the negotiations”.

C.    The Environment and Climate Change

President Obama emphasized the need to address climate change in his State of the Union address:

Taken together, our energy policy is creating jobs and leading to a cleaner, safer planet. Over the past eight years, the United States has reduced our total carbon pollution more than any other nation on Earth. But we have to act with more urgency – because a changing climate is already harming western communities struggling with drought, and coastal cities dealing with floods. That’s why I directed my administration to work with states, utilities, and others to set new standards on the amount of carbon pollution our power plants are allowed to dump into the air. The shift to a cleaner energy economy won’t happen overnight, and it will require tough choices along the way. But the debate is settled. Climate change is a fact. And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did.

The president made the bold claim in his State of the Union address that trade agreements – such as the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership – would “protect our environment.”

The leaked Environment Chapter of the Trans-Pacific Partnership published by WikiLeaks does little to inspire such confidence. Julian Assange, WikiLeaks’ publisher, commented upon the draft text: “The fabled TPP environmental chapter turns out to be a toothless public relations exercise with no enforcement mechanism.” The United States Trade Representative has engaged in greenwashing with respect to the Trans-Pacific Partnership.

The investment chapter also poses a threat to the protection of the environment, biodiversity, and climate change. Techdirt writer Glyn Moody has highlighted how gas companies have used investor-state dispute mechanisms to challenge a fracking ban in Quebec under the North American Free Trade Agreement (NAFTA).

President Obama promoted natural gas in his State of the Union address:

One of the reasons why is natural gas – if extracted safely, it’s the bridge fuel that can power our economy with less of the carbon pollution that causes climate change. Businesses plan to invest almost $100 billion in new factories that use natural gas. I’ll cut red tape to help states get those factories built, and this Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas.

There has been much concern that the Trans-Pacific Partnership will turn the Pacific Rim into a Gasland, because Obama will encourage fracking and promote the export of natural gas.

Joe Romm commented that President Obama had taken a “Jekyll and Hyde” approach to energy. He observed that “his continued embrace of “all of the above” energy reflects a true Jekyll and Hyde split personality.”

350.org Executive Director May Boeve lamented: “President Obama says he recognizes the threat of climate change, but he sure doesn’t act like it.” She commented: “If he was serious, he’d reject the Keystone XL tar sands pipeline and stop promoting fossil fuels like natural gas.” Boeve observed: “Fracking isn’t a solution, it’s a disaster for communities and the climate.” 350.org founder Bill McKibben added: “If he actually took climate change seriously, he’d understand that more oil means higher temperatures–that’s just how physics works.”

Michael Brune, the executive director of the Sierra Club, was also disappointed by the President’s address. He recognized: “The President has taken significant steps forward by committing to hold dirty power plants accountable for their toxic carbon pollution and to protect our public lands.” Brune lamented, though, that Obama was contradictory, promoting renewable energy at the same time as boosting fracking for oil and gas.

Unfortunately, the sum total of the President’s commitments fall short of what American families need to ensure a safe, healthy planet for our children. We can’t drill or frack our way out of this problem. There is far more potential for good job creation in clean energy like solar and wind, and common sense solutions like energy efficiency. Make no mistake — natural gas is a bridge to nowhere. If we are truly serious about fighting the climate crisis, we must look beyond an “all of the above” energy policy and replace dirty fuels with clean energy. We can’t effectively act on climate and expand drilling and fracking for oil and gas at the same time.

Brune stressed: “We must walk away from boondoggles like fracked gas.” He emphasized that trade deals should not undermine action on climate change: “To fight the climate crisis, we must resist the temptation to trade away American jobs and public interest policies to foreign corporations.”

For this week’s Favorites of the Week, Dr. Matthew Rimmer wanted to focus in on some of the specific points that came up in the Congressional hearing on fair use earlier this week. While a bit different than our usual “favorites of the week” post, it’s a really fantastic in-depth look at some of the issues, which I’m sure many of you will enjoy.

It is twenty years since the Supreme Court of the United States handed down its landmark decision on copyright law and the defence of fair use in the “Pretty Woman” case, Campbell v. Acuff Rose Music. Inspired by the jurisprudence of Justice Story and Justice Leval, Justice Souter developed a doctrine of transformative use. His Honour stressed that “the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works.” Justice Souter observed: “Such works thus lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright, and the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.”

In January 2014, the United States Congress held a hearing about copyright law and the scope of the defense of fair use. The House of Representatives Judiciary Committee – through its Subcommittee on the Courts, Intellectual Property, and the Internet – heard a number of pieces of evidence and testimony. Mike Masnick provided an astute summary of the issues raised in the hearing on Techdirt. Brandon Butler said that the hearing put “transformativeness on trial.”

Professor Peter Jaszi is a leading public scholar and intellectual on matters of copyright law. He was instrumental in co-editing landmark collections of copyright law and authorship, such as The Construction of Authorship. Jaszi was quick to argue against the introduction of a copyright term extension in the United States. He has written extensively about the operation of the copyright defense of fair use – writing works such as Reclaiming Fair Use with Patricia Aufderheide.

In his written evidence, Jaszi emphasized four themes to the United States Congress about the defense of fair use. First, he observed that a “citizen’s ability to make some socially and economically positive uses of copyrighted material without permission is a right, and now widely recognized as such – including acknowledgements by both the Congress and the Supreme Court, which has stressed the connection between fair use and the freedom of expression secured by the First Amendment.”

Second, Jaszi commented that “fair use is working.” He emphasized: “Everyone who makes culture or participates in the innovation economy relies on fair use routinely – whether they recognize it or not.” He commented: “What’s notable about the current situation is that more and more business and practice communities are actively acknowledging the ways in which their contributions to our collective cultural and economic life depend on the ability to exercise the right of fair use in appropriate circumstances.” Jaszi has been a part of a recent study considering how artistic communities grapple with questions of copyright law, permissions, and fair use.

Third, Jaszi stressed that the defense of fair use is patterned, reliable, and predictable. He scoffed at the complaints of critics that the defense was vague, uncertain, and unpredictable: “The current state of the law is proving those critics wrong.”

Finally, Jaszi maintained that there was no pressing need to revise or reform the defense of fair use in the United States. He observed that “the last decade has seen a proliferation of decisions applying this flexible, purpose-based doctrine to uses in the digital domain, from the development of interoperable software products and Internet search technology, to the practice of remix culture, though mass digitization in the promotion of access to knowledge.” Jaszi stressed: “In effect, in only a few short decades, the courts have developed a robust ‘unified field theory’ of fair use which is fully capable of meeting the digital challenge and should be allowed to do so.”

In conclusion, Jaszi held that “the fair use doctrine adds materially to our cultural choices, our learning opportunities, and our access to innovation.” He commented: “We can only wonder (with some bemusement) why some of our most important foreign competitors, like the European Union, haven’t figured out that fair use is, to a great extent, the ‘secret sauce’ of U.S. cultural competitiveness.” Countries like Australia are at a competitive disadvantage, because their defense of fair dealing is much more limited and restricted than the United States doctrine of fair use.

In his testimony, Peter Jaszi deftly responded to questions from members of the United States Congress. Congressman Thomas Marino asked whether fair use encouraged piracy. This conflation of fair use and piracy is misleading and meretricious. The copyright industries have increasingly sought to slander fair use, by demonizing the defense, and scapegoating the doctrine for industry concerns about copyright infringement. Jaszi commented that internet piracy is not fair use because it would not meet the four factors under fair use and does not constitute transformative use.

Parker Higgins and Mitch Stoltz noted: “One area that got significant attention was the topic of mass digitization, which has been repeatedly determined by courts to be a fair and transformative use.” Jaszi defended the legitimacy of fair use precedents relating to Google Books and Hathi Trust. He maintained that such decisions were success stories, rather than problems. Jaszi made the strong point that the decisions promoted the fundamental principles of copyright law – the progress of science and the useful arts, access to knowledge and education. The Hathi Trust decision is particularly socially useful because it addresses the pernicious problem of disability discrimination.

Moreover, Jaszi also discussed the new fair use ruling involving the financial information company, Bloomberg. The debate in the United States Congress was further heightened by a new United States decision on copyright law and fair use. In the case of Swatch v. Bloomberg, the Court of Appeals for the Second Circuit held that Bloomberg’s recording and distribution of an earnings call by Swatch was protected by the defense of fair use. The court commented:

In the context of news reporting and analogous activities, moreover, the need to convey information to the public accurately may in some instances make it desirable and consonant with copyright law for a defendant to faithfully reproduce an original work rather than transform it. In such cases, courts often find transformation by emphasizing the altered purpose or context of the work, as evidenced by surrounding commentary or criticism.

Mike Masnick commented upon the ruling: “All in all, a nice clear win for fair use even when the full work is used for commercial reasons.”

Edward Black from the Computer and Communications Industry Association lamented that technology developers were not well-represented in the debate over copyright law and the defense of fair use in the United States Congress. He maintained that the defense of fair use was particularly important in facilitating a range of emerging technologies:

The same fair use principle that saved home video has also served MP3 players, DVRs, smartphones and a considerable portion of modern Internet functionality, like cloud computing, that we depend upon today. In recent years, we’ve seen courts invoke fair use to validate a variety of transformative, socially valuable services, including online search engines, including image and book search; commercial-skipping and time-shifting with DVRs; and a service that compares students’ papers against a database for plagiarism (who, understandably, might not want to authorize use of their papers to prevent cheating).

Black concluded:”Not only does fair use serve extensive societal interests, it has been a commercial boon to the U.S. economy — something policymakers should be interested in protecting.”

Mike Masnick makes the strong point that “fair use is the public’s right” and not only provides protection for “free speech” but enables “great and powerful innovation as well.” The emergence of new technologies such as 3D printing and cloud computing will pose new challenges for copyright law, and the flexibility of the defense of fair use, and the doctrine of transformative use.

Remix Culture, Fan Fiction, and Transformative Works

Also for the same hearing, Naomi Novik, provided an eloquent submission presentation to the United States Congress on copyright law, fair use, and remix culture.

One of the founding members of the Organization of Transformative Works, Novik is an American writer who is best known for her Temeraire series, which tell an alternative fantasy history of the Napoleonic Wars, featuring dragons.

This was a timely submission given the copyright litigation of late over remix culture. There has been much copyright litigation over literary mash-ups such as The Wind Done Gone and 60 Years Later; appropriation art by Shepard Fairy and Richard Prince; and digital sampling and musical quotations; and television advertisements such as GoldieBlox’s parody of the Beastie Boys.

Novik discussed the role of the defense of fair use with respect to remix culture, fan fiction, and mash-ups. She noted: “I am not a lawyer, but as one of the creators and artists whose work is deeply affected by copyright law, I hope to explain how vital fair use is to preserving our freedom and enabling us to create new and more innovative work.” Novik maintained: “I urge Congress to not only preserve but strengthen fair use, to encourage still more innovation and creative work by more new artists. I would ask in particular that Congress consider improving protections for fair users, especially individual artists, who are threatened with lawsuits or DMCA takedowns.”

Nostalgically, Novik recalled her early experiences, experimenting with fan fiction in an online remix community:

In 1994, while I was still in college, I first came across the online remix community. Over the next decade, before I wrote one word of my first novel, I wrote fanfiction, built online computer games, wrote open­source archiving software, and created remix videos. I met hundreds of other artists creating their own work, and found an enthusiastic audience who gave feedback and advice and help. I had no money for licenses or lawyers. Neither did my fellow artists. No one would have sold us one anyway. We weren’t trying to make money off our work. We were gathering around a campfire to sing and tell stories with our friends. The campfire was just a bigger one, and instead of telling new stories about Robin Hood, we told new stories about Captain Picard, because that was who we saw on television every week. Fair use gave us the right to do that.

Novik emphasized: “Our work was transformative in every sense of the word.” She stressed: “We weren’t simply retelling the old stories — we were creating new stories, and ones that weren’t being told.” Novik commented: “We transformed the original work, and we transformed ourselves by doing so.” She discussed how the creative community facilitated creativity: “We learned to think of ourselves as writers, artists, programmers, as creators.” She observed: “We took our craft seriously and so did our audience, and that audience was invaluable.”

Novik reflected that the history of art, literature, and drama has been one of borrowing:

Vincent van Gogh deliberately copied Japanese woodcuts so that he could find his own style. Shakespeare borrowed heavily from earlier sources. No one could deny that he transformed them. But imagine if the laws of his time had barred him from doing so. We wouldn’t have Hamlet, we wouldn’t have King Lear, we wouldn’t have Romeo and Juliet. And if Leonard Bernstein hadn’t borrowed from Romeo and Juliet, we wouldn’t have West Side Story. Now if we prevent the next generation from borrowing from West Side Story, we cap the flow of creativity, we dam the river of innovation.

Novick indicted that “Original work, work that stands alone, doesn’t just pop up out of nowhere.” She stressed that “It is at the end of a natural spectrum of transformation.” Novik emphasized that “Fair use protects this spectrum, this incubator if you will.” She noted: “It’s a space where artists can play with ideas and develop our skills, and share our work within a community and learn.”

Novik was skeptical of arguments by copyright owners about the utility of copyright licensing as a solution instead of fair use. She noted: “Licensing is not a realistic option for most artists and communities who rely on fair use.” Novik observed: “On the purely practical level, the vast majority of remix artists doing non-commercial work simply don’t have any of the resources to get a license — not money, not time, not access.” She stressed: “And speaking as a copyright holder, licensing is not a realistic option for most of us on the other side of the problem either.” Novik commented: “I very much don’t want the difficulty and legal risk and expense involved in coming up with a license and issuing one to everyone who would like to write their own story about becoming a dragon captain in the Temeraire universe.” She emphasized: “And more importantly, licensing still doesn’t work even if the practical considerations are removed, because licensing invariably stifles transformative work.”

Naomi Novik was concerned about the impact of copyright lawsuits on remix artists. She pleaded:

I would ask Congress to make it easier for developing artists, who are often at a significant disadvantage currently, to exercise their fair use right. I have never received a cease­and­desist letter. But some of my fellow remix artists have, despite the fact that their work was completely noncommercial and highly transformative. It drove several of them completely out of the community and caused them to stop sharing their work, or it stopped them creating it at all. Virtually every remix video artist I know (including myself) has had their videos taken down from multiple platforms by automated systems that look for even minute fragments of copyrighted work. In order to restore them, if that’s even possible, they have had to file counter­complaints in the face of terrifying automated warnings telling them that they could be fined enormous amounts of money, and making them feel like criminals.

She lamented the destruction of remix culture: “I have gone hunting for stories and art and videos that were so good they stuck in my mind even years later, only to find out that they had been yanked down and were effectively destroyed.” In this context, there is a need for Fair Use Projects to ensure that creative artists have legal support, so that they can exercise their fair use rights.

In conclusion, Novik emphasized the importance of the defense of fair use to remix culture, amateur production, and fan fiction:

Our country is the world leader in innovation because here we ask those what if questions, and we are free to imagine what the answers look like. We’re encouraged to look around us at the things that exist and imagine how we could make them better, how we could take them to the next level, how we could transform them.

That is the spirit behind fair use. Fair use invites us to tinker and transform, and it frees us to explore ideas and share them with one another. It gives new artists and creators more tools to play with early in their careers and facilitates the evolution of genres and new forms. Any narrowing of fair use is inimical to this spirit.

The eloquent submission of Novik was an important reminder that the defense of fair use plays a critical role in encouraging artistic expression, creative freedom, and cultural sharing.

Unfortunately, creative artists in other jurisdictions do not necessarily have the flexibilities of the defense of fair use under copyright law. In Australia, there has been much policy debate about the inadequacies of the current defense of fair dealing, which is limited to specific purposes. Notably, in the “Kookaburra” case, Men at Work’s classic Australian anthem, “Down Under”, was found to have infringed the copyright in a Girl Guide campfire song about kookaburras. This has led to much debate as to whether there should be a modernization of Australian copyright law, and the introduction of a defense of fair use.

The IT Pricing Inquiry, and the Australian Law Reform Commission heard a range of evidence, supporting the introduction of such a defense into Australian law. The new Conservative Government, though, seems antagonistic to law reform in respect of copyright exceptions. The new Attorney-General, George Brandis, has been sympathetic to the demands of copyright owners for stronger measures with respect to copyright enforcement.

Furthermore, there is a need to ensure that remix culture, fan fiction, and mash-ups are not penalized under the proposed Intellectual Property Chapter of the Trans-Pacific Partnership.