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Horn, Ant --- "Creators and the copyright balance: Investigating the interests of copyright holders, users and creators" [2004] AltLawJl 31; (2004) 29(3) Alternative Law Journal 112

Investigating the interests of copyright holders, users and creators


Traditionally the debate about the copyright balance has tended to focus on only two groups -holders and users.[1] Where does the creator[2] fit into th1s debate? It is useful to consider the two traditional groups and their positions to establish the points of departure and convergence in respect to creators.

Background to the copyright balance

A copyright type right first emerged in seventeenth century England as the printing industry began to establish itself Printers sought to have exclusive rights to print certain books and received support from the King.[3] However, copyright law in its modem form appeared in the Statute of Anne of 1710. Importantly this granted rights to authors (creators) rather than just to publishers (or stationers, as they were known at the time). Also significantly it granted these rights for a set period of time -14 years with the option of renewing for a further 14 years. Here we see the emergence of the copyright balance. On one hand creators deserve to enjoy the opportunity to be rewarded for their creative endeavour-authors have rights. On the other, this must be balanced with the interest of the public and should not create monopolies-rights are for a limited time.

This philosophy of balance was carried forward as copyright law developed. It was an underlying principle of the Berne Convention for the Protection of Literary and Artistic Works of 1886 (Berne Convention) and is recognised as being a primary consideration of legislators when shaping copyright law. The importance of this balance is clearly expressed in the preamble to the World Intellectual Property Organisations (WIPO) Copyright Treaty:

Recognizing the need to maintain a balance between the rights of authors and the larger public interest, particularly education, research and access to Information, as reflected in the Berne Convention.[4]

Copyright law and the copyright balance have come under increasing pressure from technological development and from interest groups seek1ng to expand their rights. As a result the copyright term has been extended regularly and new rights have developed. To maintain the balance, the doctrine of fair dealing (fair use in the United States) has evolved to allow for the use of copyright material in particular circumstances such as research, criticism and review. The Copyright Act1968 (Cth) also contains provisions allowing for certain uses by libraries and educational institutions either free of charge or under a statutory licence scheme. These are important counters to the rights of copyright holders and have assisted in maintaining the balance.

Copyright holders

The purpose of copyright has been expressed as providing an economic incentive that encourages creativity. In other words, creators will be more inclined to produce work in the knowledge that they will receive reward for their efforts. There is unquestionably some truth in this. This principle, however, has evolved from being an argument for the need for copyright per se and has become part of the case for expanding the rights of copyright holders. This argument of copyright holders can be baldly expressed as: protection encourages creativity.

Copyright holders also argue that there are important economic reasons for expanding their rights such as by extending the term of copyright. The two main arguments are that increased protection and opportunity to benefit are necessary to balance the impact of recent developments, such as file-sharing,on the ability of copyright holders to be rewarded for their rights. Secondly, it is beneficial for Australian law to be amended to harmonise with that of overseas jurisdictions, as this will enable Australian copyright holders to enjoy the same advantages as holders in those jurisdictions.

Copyright users

It would appear that users do not deny the basic principle that copyright encourages creativity by rewarding creators. However, they do object to the expansion of holders' rights as they see this as contracting the public domain. The public domain is a place where individual control of copyright does not exist or is limited, and where people are free to make use of copyright material. Users argue that the public domain is essential to creativity because it provides creators with a valuable storehouse of material from which they can develop new works. Access to this storehouse, users argue, encourages creation and innovation. The user case can perhaps be expressed as: freedom encourages creativity.

Another argument of user interests is that access feeds demand. This is based on the idea that by giving consumers access to material they are more likely to buy it For example, if musicians make their music freely available online this will lead to people buying more COs or concert tickets. It is recognised that there may be a cost involved in making material freely available however the view is that the increased demand will balance this.

So who is right?

Both sides of the argument have merits and both similarly suffer from a general lack of empirical evidence to support their case. However, a reasoned approach, bearing in mind the importance of maintaining the copyright balance, would appear to favour the arguments of users. It is a realistic proposition that access and freedom of use can encourage creativity. Creativity has a long and established history of drawing upon e sting work. Ideas do breed ideas. On the other hand, the holders' argument that increased control and opportunity for economic reward will encourage creativity is not so easy to accept For one thing copyright holders already have extensive rights. The only evidence to say that these rights are not sufficient is provided by the holders themselves. It seems difficult to support the view that by extending their existing rights you encourage musicians to pick up their instruments.

In regard to holders' arguments that rights expansion is necessary to balance economic harm, it can be said that the actual evidence of this harm is not compelling. Until recently, copyright holders had supplied most evidence made available on the subject. In the case of file-sharing, the decline in sales of COs has been compared to and blamed on the dramatic increase in the downloading of music via file-sharing networks. However, a recent independent study has demonstrated that the effect of file-sharing on actual music sales in the United States is 'indistinguishable from zero'.[5]

This data does not necessarily support the arguments of users either. A neutral result cannot be said to be feeding demand. However, the study findings would seem to indicate that, at the very least, sufficient demand is generated from file-sharing to balance any cost incurred by the music being made freely available.

The arguments by holders in regards to harmonisation are less easily dismissed. There seems to be practical sense in bringing Australia into line with its trading partners in respect to copyright law by, for example, extending the term of copyright However, the necessity of doing so needs to be considered. lntemat1onal instruments such as the Berne Convention and TRIPs have already provided for 'harmony' between jurisdictions and enable citizens of states parties to enjoy national treatment in each other's countries. It could be argued that jurisdictions such as Europe and the United States have created disharmony by going beyond the standards provided for 1n these instruments. Additionally it should be acknowledged that Europe and the United States along with Japan dominate the global market in copyright material. Copyright industries contribute significantly to their economies, particularly that of the United States, therefore they have enormous economic reasons for expanding the rights of copyright holders. Being a small player in the international market, it must be asked whether harmonising with these jurisdictions would actually be in Australia's interests.

The arguments highlight a contrast between economic (holders) and social (users) interests. It appears that the differing points of view effectively even each other out Despite this it seems clear that lawmakers are giving greater weight to the arguments of copyright holders and that the law is developing in a direction that is tipping the balance in their favour. This potentially has a significant impact not just on users but also on creators.

Creators, holders, users - divergence and convergence

Creators must be seen as a separate group from both holders and users as they have points of divergence and convergence w1th both groups -in effect they have a foot in both camps. Despite this creators are often grouped with copyright holders. There is merit to this. As copyright arises automatically upon creation, creators will be the initial holders of copyright. As such, they share a similar set of interests with holders of copyright in respect to protecting their rights and being rewarded for their creative endeavour. This is the obvious point of convergence between holders and creators (and also the most obvious point of divergence with users). There are however important areas where the interests of holders and creators diverge, most significantly where creators have ceased to be the copyright holders in their work. This will occur where they have assigned, or licensed their rights to such an extent that ownership has either passed to someone else or exists only in an illusory way.

Of course, not all creators sign away their rights. However, even those who do hold onto their copyright are often in a very different position than those rights holders who have acquired copyright. Firstly they will often be in a weaker bargaining position with less ability to leverage income from the rights they control. Secondly, they are often unable to take action to defend their rights as the legal mechanisms required are beyond their resources. For this reason they are often unable to meaningfully exploit their rights or to defend them when they are infringed.

It must be acknowledged that creators do receive valuable support and assistance from collecting societies. In fact the income creators receive via collecting societies may often be their major source of income. This is important as it enables creators to continue doing what they do: creating. Copyright collecting societies also have the resources to bring legal action. In Australia this has enabled collecting societies to develop and extend the rights of creators. However, collecting societies are only able to act in respect of certain rights or under particular schemes so their assistance, while important, is limited. Also, collecting societies are not 'creators' groups'. They are 'holders' groups' and therefore their interests are primarily economic. This 1s understandable as this is their business, however, this may sometimes affect their ability to act in the broader interest of creators.

Holders and creators also differ in their ability to access other copyright material. Both groups, like all copyright users, are able to rely on fair dealing principles in certain situations. Similarly, they both may be able to make certain uses of copyright material under a licence scheme. However, the ability of a creator to be able to access copyright material that falls outside these zones is limited. For example, a filmmaker wanting to use a particular song in his or her film may find that licensing the music will be time consuming and prohibitively expensive. A musician may find him or herself in a similar position needing to clear samples on a sound recording. Certainly, there may be innovative ways to get the permission or, there may be other sources of material, which are more easily accessed. However, these may involve a creator compromising their work. This compromise often becomes an artistic necessity, as creators do not have the resources or bargaining power to negotiate or purchase access to copyright material. Holders on the other hand are more likely to have the resources and bargaining power to more successfully access the existing pool of copyright material. Additionally their stronger position gives them the option of acquiring rights in new works.

It is on this matter of access that the interests of users and creators most clearly converge. Creators often need to be able to use the work of others as part of their own creative process. They need access. The view has been expressed on many occasions that there is no such thing as an original idea. The point is not that nothing is original; rather that new work is often influenced by or builds upon previous ideas. As Picasso is credited as saying 'good artists borrow, great artists steal'. The idea of creators building upon the ideas of others is perhaps even more relevant today as new technology enables creators to 'cut and paste' and pull together disparate material to create new work. This may be art, music or software, or composite work that incorporates elements of different media. The ability of creators to do this opens up enormous possibilities to innovate and create. This is not to suggest that creators should be free to take whatever they like of other people's work. Rather that reasonable opportunity to access and share material is a valuable creative commodity.

Creators and copyright term extension

A significant impediment to the ability of creators to reasonably access and share copyright material is the likely extension of the term of copyright as a result of the recently concluded Free Trade Agreement between Australia and the United States (FTA).

In considering the copyright term extension provisions in the FTA it is useful to discuss briefly recent developments in copyright law in the United States, specifically the Sonny Bono Copyright Term Extension Act 1998 (CTEA). The purpose of the CTEA was to extend the term of copyright in the US from the life of the creator plus 50 years to life plus 70 years for works.[6] Additionally, the CTEA extended copyright protection for 'works made for hire' to 95 years and in some cases 120 years. The 'works made for hire' distinction does not currently exist in Australian copyright law. However, in the United States context 'works made for hire' essentially means works created by corporate bodies or their employees.

The United States entertainment industry led by the Motion Picture Association of America aggressively lobbied the Congress to have the copyright term extended. Opponents of the CTEA were unable to prevent the legislation's introduction but subsequently took legal action arguing that Congress' extension of the copyright term was contrary to the US constitution.[7] These arguments were ultimately unsuccessful and the legislation entered into United States law.

The significant aspect from an Australian point of view is that the FTA effectively imports the CTEA term extension.[8] It is a natural effect of trade agreements that states parties will need to amend their domestic law to meet their obligations under trade agreements. However, the adoption of an extended copyright term may be premature in light of the body of review and discussion of the subject in Australia.

The Intellectual Property and Competition Review Committee considered extending the term of copyright in Australia in its 2000 report (the Ergas Report).[9] After considering submissions by interested parties from both sides of the argument the Committee made the following comments:

The Committee is not convinced of the merit in proposals to extend the term of copyright protection, and recommends that the current term should not be extended.
We also recommend that no extension of the copyright term should be Introduced in future Without a prior thorough and independent review of the resulting costs and benefits.[10]

Another report[11] commissioned by the Motion Picture Association focusing on the economic impact came to the conclusion that

Overall, the net financial impact of term extension in Australia is likely to be neutral; there are costs, and there are benefits, but to say that one is appreciably large [sic] than the other lacks credibility.[12]

Extending the term of copyright was further addressed in 2002 by the Report of the Visual Arts and Craft Inquiry (Myer Report). The Myer Report acknowledged that there was pressure from the visual arts and craft sector to increase the term of copyright to the life of the artist plus 70 years. However, like the Ergas Report, it also recommended that an independent review should be conducted to assess the impact of such an increase.

Taken overall these reviews do not support the extension of the copyright term. In effect, it could be argued that the FTA is importing law that is the result of pressure from the United States copyright industry and is yet to be the subject of comprehensive independent review in Australia.

It is difficult to predict exactly what the impact of copyright term extension will be on the copyright balance In Australia. However, any extension of the copyright term is, on a simple level, an expansion of the rights of copyright holders. As such it is likely to involve a reduction in the public's ability to access and use copyright material. The simple fact that copyright material .will be protected for an additional twenty years and thus be under private control would seem to support this view.

This will affect creators. Their inability to access and share copyright material will potentially place limits on their ability to create new work. This in effect hinders innovation. It is also significant that it has been recognised that there is likely to be no significant economic advantage in extending the term. Therefore, creators would be curtailing their access for a nonexistent or minimal financial return. It is difficult to see the benefits in this.

Finally, it is also interesting to note that while the FTA imports the United States' extended copyright term, amongst other provisions generally granting increased protection and enforcement measures that will benefit copyright holders, there is no indication that a United States type fair use doctrine will be adopted. Unlike the Australian fair dealing doctrine, which is tightly defined, the US fair use doctrine is more open-ended. This potentially allows for a wider range of activities to be considered fair use. For example, reproduction of copyright material for the purpose of commercial satire or parody has been held to be a fair use in the United States.[13] The US approach arguably provides additional balance to the expanded rights afforded copyright holders. With the adoption of the FTA, Australia will be expanding the rights of copyright holders but will not be providing this additional balance. This would seem to further tilt copyright the balance in favour of copyright holders and away from creators and users.

What are the alternatives?

It has been suggested that existing copyright law is ill-equipped to deal with the radically changed copyright environment that has occurred as a result of technological development Whether this is true or not, due to the massive economic interests of the copyright industry, it seems unlikely that there will be any significant remodelling of the copyright system in the near future. However, alternatives are being put forward. There are a number of projects already in place that seek to provide different ways to manage and deal with copyright material outside the traditional copyright system. An essential philosophy of these projects is to increase the ability of people to access material with a view to fostering increased creativity and innovation. A brief discussion of one of these projects, Creative Commons,[14] illustrates that there are alternative ways for creators to enjoy increased access to copyright material while still retaining some of the benefits of copyright.

Creative Commons is a relatively recent development and is largely the brainchild of Professor Lawrence Lessig[15] of Stanford University. Although founded in the United States, Creative Commons is working with groups 1n a number of countries including Australia[16]to develop the project. The philosophy behind each of these projects is the same: a commitment to expanding the range of creative work available to others to build upon and share.

To facilitate the project's aims, a suite of licence agreements has been developed. Unlike most traditional copyright licences, Creative Commons licences allow for varying degrees of free use by the public. For example, a creator may licence his or her work under a Creative Commons attribution licence. This allows for free unlimited use of the work on the condition that whenever use is made the creator is attributed. Alternatively, a creator may choose a non-commercial use licence, which allows the work to be used in any non-commercial way. The licence system is flexible and allows creators to tailor a licence that best suits their needs. Additionally the project is developing sampling licences, which will allow creators (most likely musicians) to permit others to sample their work to a certain extent.

There has been criticism of Creative Commons particularly in regard to the fact that the licences further undermine creators' ability to benefit from their work and that the licences themselves may be unenforceable. In regards to the first point a Creative Commons licence and the nature of that licence are matters of choice for creators. Creators are free to not involve themselves if they so decide. The point is that the project is offering an alternative that allows creators to share material on their terms. As to the second criticism, that the licences are unenforceable, the main concern raised is that 1f material is used in a manner outside the terms of the licence, creators will either not be able to rely on the licence or will not have the resources to take action. The issue of resources is not significant as th1s just restates the fact that generally creators do not have the resources to take legal action. As to the inability of creators to rely on the licences, until such time as the licences are thoroughly tested it is difficult to make a determination on their enforceability. Also, in the Australian case, the licence has not been finalised so it would be premature to do so.[17]


Creativity and innovation are essential commodities in a progressive and developing society. However, it is equally important for such a society to recognise and protect property rights. This conflict between economic (holders’) and social (users’) interests is the central dilemma of the copyright balance. Caught in the crossfire of the debate are creators. There is no simple solution to the problem of the copyright balance apart from continuing efforts to maintain it. These efforts need to be wary of expanding the rights of copyright holders and thus potentially limiting the ability of creators to access and share material. The benefits and costs of tipping the balance one way or the other should be considered with both social and economic consequences in mind. The domestic impact of altering the balance should not be overlooked in the eagerness to meet international pressures. Alternatives to traditional copyright law need to be investigated and explored. Copyright and the public domain can coexist and if this coexistence can be nurtured there is the potential for all to benefit equally: holders, users and perhaps most importantly, creators.


[*] ANT HORN is a lawyer at the Arts Law Centre of Australia.

© 2004 Arts Law Centre of Australia

[1] 'Copyright holder' is used in this article to refer to a non-creator third party that has acquired copyright, 'copyright user' is used to refer to any user of copyright material

[2] 'Creator’ is used in this article to refer to independent sole-trader members of the arts and creative communities

[3] Licensing Act 1662

[4] Australia is yet to become a signatory to the WIPO Copyright Treaty

[5] Oberholzer, Felix and Strumpf, Coleman, The effect of file sharing on record sales an empirical analysis (2004)

[6] Works in this sense includes literary, artistic, musical, dramatic works as well as sound recordings and audiovisual works that are not 'works made for hire'

[7] Eldred v Ashcroft (2003) 123 5 Ct. 769

[8] There is no indication in the FTA of an intention to introduce the 'works made for hire' distinction into Australian copyright law

[9] Intellectual Property and Competition Review Committee, Review of intellectual property legislation under the Competition Principles Agreement (2000).

[10] Ibid 84

[11] Allen Consulting Group, Copyright Term Extension. Australian Benefits and Costs (2003)

[12] Ibid 36.

[13] Campbell v Acuff-Rose Music (92-1292), 510 U.S. 569 (1994).

[14] <> at 10 June 2004

[15] <> at 10 June 2004

[16] Creative Commons Australia was recently launched in Sydney and Brisbane and a draft licence is available for comment on the Creative Commons website

[17] The drafters of the Australian licence have made the draft available online for comment at the Creative Commons website

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