User:Pde/Notes on term extension

Copyright Term Extension

Dr Matthew Rimmer, Faculty of Law, ANU, and others

The Australian Federal Government has reneged on past promises that it would not extend the copyright term.

In the past, the Federal Government has rejected proposals to extend the term of copyright protection. The Intellectual Property Competition Review Committee - lead by the redoubtable economist Henry Ergas and intellectual property academic Jill McKeough - investigated whether the copyright term should be extended, in accordance with the European Union and the United States of America. It could find no empirical evidence whatsoever to support such an extension of the copyright term. Accordingly, the Committee recommended that there was no justification to change the copyright term in the context of Australia.

In November 2003, a spokeswoman for the Minister for Communications, IT and the Arts, Daryl Williams said that the Government "appreciates the value of having material available in the public domain". She told the Sydney Morning Herald: "The Government will consider any proposals for increased copyright protection in light of the fact that Australia is a net importer of content.  Australian copyright laws currently promote innovation and investment in the content and cultural industries, while at the same time providing Australian consumers, educators and researchers with reasonable access to copyright material."

In December 2003, Trade Minister Mark Vaile pledged to defend the copyright term in Australia: "It is a very important issue, particularly in terms of cost to libraries, educational institutions and the like here in Australia," he told The Australian Financial Review. "There is a whole constituency out there with a strong view against copyright term extension and we are arguing that case."

Two months later, it seems that the Australian Federal Government has meekly capitulated to the demands of the United States of America. A key point of the new chapter on intellectual property in the Free Trade Agreement promises "an increased term of protection for copyright material". This goes completely against the Intellectual Property Competition Review recommendations.

A spokesman for the Trade Minister Mark Vaile said the extension would come into force on January 1 and copyright fees would not apply to past use. He said Australian intellectual property holders would be pleased by the change. "Our position was that we did not think we needed to go the extra 20 years . . . but in the context of the overall agreement we were happy to," the spokesman said.

The Australian Attorney General Philip Ruddock defended the copyright term extension at a conference in Brisbane on Friday the 13th February. He raised three arguments in defence of the extension: (1) competitiveness, (2) emerging international trends, and (3) the overall trade-offs in the agreement. Ruddock said:

“It is important that I say something about Australia’s agreement to increase the term of protection for copyright works by an additional 20 years. Australia generally does not advocate higher standards of intellectual property protection than those determined internationally. However, it is sometimes in Australia’s interest not to lag behind emerging standards of important trading countries. It is clear that an international standard is emerging amongst out major trading partners for a longer copyright term. In these circumstances, term extension is a necessary and positive thing. It will ensure that Australia remains a competitive destination for cultural investment. It will also ensure that Australians are better able to trade their interests in an increasingly global market”.

(http://www.ag.gov.au/www/MinisterRuddockHome.nsf/Alldocs/RWP21E60A98ACC4ECE2CA256E3B0080AA84?OpenDocument)

1. Competitiveness

Ruddock argued that the decision would boost Australia's competitiveness by giving it access to the United States economy. However, such arguments are curious given the findings of the Intellectual Property and Competition Review, and the paucity of the evidence of the Allens report.

Predictably, copyright owners have pushed for an extension of the copyright term in the course of the free trade negotiations. The Motion Picture Association of Association - the US copyright owner group - has co-ordinated a submission on behalf of local copyright collecting societies - such as CAL, APRA and Screenrights. A report by Allens Consulting considers the costs and benefits for a copyright term extension. However, this report is deeply flawed in terms of its methodology and legal analysis. It also fails to produce any empirical economic evidence that support an extension of the copyright term. Furthermore, the report fails to deal with the testimony of economists such as Milton Friedman who contend that even an extension of the copyright term in the United States would be folly - let alone Australia. The Allens Consulting Report has been widely discredited. There are strong arguments that there is not the economic evidence to support a copyright term extension.

The chief negotiator Stephen Deady told the Senate Estimates Committee:

"There are certainly some benefits for the Australian economy, and that is why this does come down very much to an issue of looking at the arrangements, the balance, and the future prospects for the Australian economy in these areas. It does potentially provide a boost to investment in these areas. That is a factor that has to be taken into account. One of the numbers I have seen is that between 1996 and 2000 Australia’s exports in this area—IP type areas, copyright industries—grew faster than the national economy, with an average growth rate of about 5.7 per cent. Exports grew by around nine per cent. So there are certainly some advantages in this area of copyright extension."

An important question is: What economic evidence is the Government basing its decision on?

The chief negotiator Stephen Deady told the Senate Estimates Committee that the Government had not engaged in any economic research into the impact of the copyright term extension:

"Senator CONROY—Was any analysis undertaken on the impact of this particular change? I appreciate this was a bit rushed at the end and it was pretty cold over in Washington, but did you get a chance to look at the consequences of this?

Mr Deady—We have not done any particular work on this question of copyright extension. I mentioned, and the minister mentioned it again, that these are the sorts of issues you look at in this area: what are the additional costs, if any; how do they spread across the community; and what are the potential gains for Australia moving into this area. Again, this is a question that was certainly thought about and looked at by us as we went through these negotiations. It is an on-balance question. The costs are difficult to really measure, particularly as they accrue over a very long period of time. Certainly, across the wider community, the impact on a particular book or record is probably very low. There are other clear pluses, such as what it does for encouraging investment and encouraging the creative sector to look at".

The chief negotiator had not perused the Ergas Intellectual Property and Competition Review:

Senator COOK—I hate to argue with you, Mr Deady, but it does not give you an upside; it just gives you a criticism of this. Let me just quote to you another section from his article referring to copyright: 'Furthermore, it is inconsistent with the recommendation of the Australian Intellectual Property and Competition Review Committee that any extension of the copyright term should only occur after a public inquiry'. He goes on about that. We did not have a public inquiry to agree to this, did we?

Mr Deady—One of the outcomes of the negotiations with the United States was to agree to the extension of copyright term, yes.

Senator COOK—I understand that, but we did not have a public inquiry as recommended by the review body before we agreed to it.

Mr Deady—Not that I am aware of, no.

Senator COOK—Were you aware of the Australian Intellectual Property and Competition Review Committee’s recommendation on this point when we agreed to it?

Mr Deady—In negotiating this whole agreement—certainly this IP chapter—we were working with our colleagues in the department of communications and Attorney-General’s. We were given a mandate by the government to take this thing forward. The copyright extension was an issue that the Americans put on the table. It was an issue that went right through the negotiations. In the context of the overall deal and the balance that was struck, the government decided to agree, as part of the FTA, to align our copyright term more closely with the United States term. That was a decision on the balance of the agreement with the United States.

Senator Cook —I am not blaming you, Mr Deady, because you cannot be expected to have read every damn thing and you are in a position where you need to be advised on some of the finer details of some of these things. My question was: were you aware of that recommendation when we reached this agreement? Mr Deady—I was not aware of that recommendation, but that is not to say that members of the team were not. I assume they probably were. As I said, we had experts from the various agencies. But I think, in terms of the negotiations and in terms of the process we were going through in relation to the FTA, these were decisions that were taken as part of the overall package. The government agreed, as part of the overall deal, to this extension. So I am not sure of the relevance of a recommendation that there should be some review before this decision was taken."

The chief negotiator appeared to be unfamiliar with the amicus brief supplied by a number of economists in the Eldred case:

"Senator CONROY—I understand that work by an eminent group of US economists, including Milton Friedman, on the US Copyright Term Extension Act of 1998 showed that the profit for the creator in the extended term was, at the most, a few cents and often a percentage of a cent. Are you familiar with that study? Mr Deady—No. Senator CONROY—I assume those few extra cents go to the creator’s estate and the copyright owner. Mr Deady—I said I am not familiar with that study. ... Senator CONROY—That study argued that the creators are barely getting a cent, literally. The copyright owners are doing pretty good. So, and I hesitate to use the words, the dynamic benefit from those creative juices flowing is pretty minimal. The copyright owners are doing okay but the creators, who are the ones by definition who must enjoy this dynamic benefit, are not."

2. Cultural Costs In the Senate Estimates Committee, Stephen Deady discussed the impact of the copyright term extension on libraries and educational institutions with Stephen Conroy, the Shadow Minister for Trade:

"Mr Deady—To the extent that this extends the copyright terms, there would be some additional costs to the users of the copyright material. Again, that is true. Senator CONROY—So universities and libraries will end up paying more? Mr Deady—To the extent that this material is being drawn on and used by those libraries and to the extent that it does have a shelf life that runs out to 70 years, there would be some impact. So there are costs, but they are difficult to quantify. But, as I said, there is an issue of balance here and what this means for creative industries in Australia. It is an on-balance issue and, in the context of the overall agreement, the government decided that it was prepared to sign on to an extension of that 50 years out to 70 years. Senator CONROY—Senator Hill, are we looking at a sugar- style compensation package for libraries and universities to offset the increased costs you have imposed on them? Senator Hill—No, we do not have that in mind."

In response, the executive director of the Australian Vice-Chancellors’ Committee, John Mullarvey, said that Australian universities now paid $20 million a year in copyright fees and adding 20 years to the period of copyright protection would add to that sum. “How much I couldn’t even guess,” he said.

Copyright lawyer Catherine Ekambi, a senior associate with Coudert Brothers, also believes that the copyright changes will have “real cost implications” for universities. “Universities will need to do an audit of their existing copyright material, particularly in relation to material from US companies,” Ms Ekambi said.

The extension of copyright will affect material such as articles, journals and research publications which Australian universities purchase from US sources. And, given that Australian copyright will also be extended, any material bought from Australian sources will also be affected.

(Tim Dodd, Trade Deal Bites Unis On Copyright Costs, Australian Financial Review, 14 February 2004, p. 16)

Col Choate of Project Gutenberg Australia commented on the impact of the copyright term extension on electronic publishing:

Terry Lane. "Taking George Orwell Offline", The National Interest, Radio National, 15 February 2004, http://www.abc.net.au/rn/talks/natint/stories/s1045288.htm

Literary works AA Milne Dr Seuss

Scientific publications ALbert Einstein

Jackson Pollock

Elvis

"Senator CONROY—So Elvis is a beneficiary, if we can work out whether he is dead or not? Mr Deady—I think he would benefit, yes. Senator CONROY—Excellent. In relation to extending the copyright term from 50 to 70 years, the authors in question are dead, in general. How is it a benefit to people who are dead? I am looking forward to this answer. Mr Deady—The thing is that it is not a retrospective commitment—that is, that we do not have to go back and extend copyright."

Samuel Beckett...

The ABC are concerned about the effect of the copyright term extension on their digitisation projects.

The producer Jane Scott experienced difficulties with the copyright term extension in the United Kingdom when she was making the film Shine. Scott believed that the musical work of Sergei Rachmaninov would have fallen outside the period of copyright duration, which in Australia was for the life of the author plus 50 years. She noted that the film was made in 1996, more than 50 years after the death of the composer Sergei Rachmaninov in 1943. However, Scott found that the United Kingdom had just extended the duration of copyright protection from the life of the author plus 50 years to 70 years in line with the European Union Term Directive. As a result, she was forced to negotiate with the copyright owners to gain a licence. This example illustrated that the extension of the copyright term created great commercial uncertainty in the context of the European Union.

3. Emerging International Trends

Ruddock also argued that Australia was following an "emerging international trend". He maintained that Australia was nonetheless respecting the multilateral system for intellectual property rights.

However, Australia has not followed emerging international trends in other fields. So for instance we have not adopted sui generis database laws, comprehensive performers' rights or traditional knowledge laws. Indeed Australia has maintained that it would follow multilateral trends.

Also there remains a lack of harmonisation. The US remains different from the EU and Australia with respect to works made for hire.

See also: Peter's diagram of the effects of a term extension