Review of technological protection measures exceptions

This Chapter focuses on the following aspects of Article 17.4.7:

• The exceptions to liability specified in Article 17.4.7(e)(i) – (vii); and
• The criteria for further exceptions under Article 17.4.7(e)(viii).

The lack of a device or service exception for Article 17.4.7(e)(v), (vii) and (viii) under Article 17.4.7(f) is also considered at the end of this Chapter.

The specified exceptions in Article 17.4.7(e)(i) – (vii)

Article 17.4.7(e)(i) – (vii) specifies a number of exceptions to the liability scheme for particular activities. These are as follows:

1. non-infringing reverse engineering activities with regard to a lawfully obtained copy of a computer program, carried out in good faith with respect to particular elements of that computer program that have not been readily available to the person engaged in those activities, for the sole purpose of achieving interoperability of an independently created computer program with other programs;
2. non-infringing good faith activities, carried out by an appropriately qualified researcher who has lawfully obtained a copy, unfixed performance, or display of a work, performance, or phonogram and who has made a good faith effort to obtain authorisation for such activities, to the extent necessary for the sole purpose of identifying and analysing flaws and vulnerabilities of technologies for scrambling and descrambling of information;
3. the inclusion of a component or part for the sole purpose of preventing the access of minors to inappropriate online content in a technology, product, service, or device that itself is not prohibited under the measures implementing sub-paragraph (a)(ii);
4. non-infringing good faith activities that are authorised by the owner of a computer, computer system, or computer network for the sole purpose of testing, investigating, or correcting the security of that computer, computer system, or computer network;
5. non-infringing activities for the sole purpose of identifying and disabling a capability to carry out undisclosed collection or dissemination of personally identifying information reflecting the online activities of a natural person in a way that has no other effect on the ability of any person to gain access to any work;
6. lawfully authorised activities carried out by government employees, agents, or contractors for law enforcement, intelligence, essential security, or similar governmental purposes; and
7. access by a non-profit library, archive, or educational institution to a work, performance, or phonogram not otherwise available to it, for the sole purpose of making acquisition decisions.

As noted in Chapter 2, the scope of the exceptions specified in Article 17.4.7(e)(i) – (vii) is narrow in comparison to the range of permitted purposes currently available in the Copyright Act 1968.¹

In addition, Article 17.4.7(f) specifies that:

• (f) The exceptions to any measures implementing sub-paragraph (a) for the activities set forth in sub-paragraph (e) may only be applied as follows, and only to the extent that they do not impair the adequacy of legal protection or the effectiveness of legal remedies against the circumvention of effective technological measures:
  1. any measures implementing sub-paragraph (a)(i) may be subject to exceptions with respect to each activity set forth in sub-paragraph (e);
  2. any measures implementing sub-paragraph (a)(ii), as they apply to effective technological measures that control access to a work, performance, or phonogram, may be subject to exceptions with respect to activities set forth in sub-paragraph (e)(i), (ii), (iii), (iv), and (vi); and
  3. any measures implementing sub-paragraph (a)(ii), as they apply to effective technological measures that protect any copyright, may be subject to exceptions with respect to the activities set forth in subparagraph (e)(i) and (vi).

Article 17.4.7(f) provides, in effect, that:

• All of the exceptions in Article 17.4.7(e) will be available to liability for the act of circumvention as described in Article 17.4.7(a)(i);
• Only the exceptions specified in Article 17.4.7(e)(i) – (iv) and (vi) will be available to liability for manufacturing or trafficking or dealing in circumvention devices or services as described in Article 17.4.7(a)(ii) regarding ETMs controlling access; and
• Only the exceptions specified in Article 17.4.7(e)(i) and (vi) will be available to liability for manufacturing or trafficking in circumvention devices or services as described in Article 17.4.7(a)(ii) regarding ETMs protecting copyright.

Table 3.1 Effect of Article 17.4.7(f)

Source Adapted from AGD, Submission No. 52, p. 10.

Article 17.4.7(f) also provides that all of the exceptions in Article 17.4.7(e) will only apply to the extent that they do not impair the adequacy of legal protection or the effectiveness of legal remedies against the circumvention of ‘effective technological measures’ (ETMs).

Although the exceptions in Article 17.4.7(e)(i) – (vii) were not referred to the Committee for consideration, the scope of Article 17.4.7(e)(vi) in relation to its coverage of government activities was raised in the evidence. The Committee also notes that a number of the proposed further exceptions appear to be covered by the specified exceptions in Article 17.4.7(e)(i) – (vii). Both of these issues are discussed below.

Scope of Article 17.4.7(e)(vi)

In its submission the Australian Tax Office (ATO) indicated a need both to access copyright material and circumvent technological protection measures (TPMs) where necessary:

Even outside of the investigation of particular matters, the Tax Office relies heavily on access and use of a wide range of copyright material to support its operations. Generally such access and use is made on agreed commercial terms, however, there are some instances where… this is not possible. In some of these cases, it is necessary to use circumvention devices.²

The ATO submitted that ‘Whilst the circumstances in which the Tax Office would wish to use circumvention devices is very narrow, the loss of this as an option even in very few cases could have an adverse effect on our operations’.³ The ATO noted the exception set out in Article 14.7.4(e)(vi) but stated that:

it is critical that the concept of “law enforcement” be sufficiently wide so as to cover civil (including tax-related) as well as criminal law administration and enforcement.⁴

The ATO indicated that specific circumstances where it would need to continue to circumvent TPMs would include cases where the copyright owner could not be identified or contacted; where permission could not be obtained from the copyright owner in time; where a work was out of copyright but TPM protected; and where agreement could not be reached with the copyright owner but access to the material was required for the ATO's operations.⁵

The Office of Film and Literature Classification (OFLC) did not explicitly refer to Article 17.4.7(e)(vi) but raised a similar issue regarding its TPM circumvention requirements:

The OFLC currently circumvents technological protection measures for the purpose of its classification functions under the Classification Act. …There is no specific exception in Article 17 for classification functions and we seek an appropriate exception for the national classification scheme.⁶

The OFLC stated that ‘Any restriction on our access to material submitted for classification would severely impair our ability to perform our statutory classification functions’,⁷ and indicated that it would require an exception to enable it to circumvent TPMs for the fulfilment of these functions.⁸

It is clear that the key issue here is the precise scope of the coverage afforded to government activity by the exception in Article 17.4.7(e)(vi). Dr Anne Fitzgerald noted that:

It is unclear whether the concept of “law enforcement” in this exception is broad enough to include activities relating to civil as well as criminal law administration and enforcement.⁹

In the Committee’s view, this is an important issue that will require careful consideration and resolution by the Government. The Attorney-General’s Department (AGD) stated that the ‘scope of the term ‘law enforcement’ will be considered further by the Department when preparing our domestic legislation’.¹⁰ The AGD also gave some indication of how the key terms in Article 17.4.7(e)(vi) might be interpreted:

The exception provides that the activity must be lawfully authorised. In other words, it must be provided for in existing legislation or some other form of regulation. Secondly, the activities must be carried out by ‘government employees, agents, or contractors’. This is taken to include individuals working for or on behalf of the Government. The third criterion is that the activities are limited to those relating to ‘law enforcement, intelligence, essential security, or similar governmental purposes’. Intelligence and security purposes can be directly related to the agencies involved in that work, for instance the Australian Secret Intelligence Organisation or the Department of Defence respectively.¹¹

The AGD also noted the equivalent provision in the US Digital Millennium Copyright Act of 1998 (DMCA) and stated that:

The Department understands that the concept of ‘law enforcement’ as used in the United States encompasses a broad range of activities that are performed to ensure obedience to the laws. These may include civil actions such as activities related to enforcing competition law, taxation law, proceeds of crime and other regulatory functions. The addition of the words ‘similar governmental purposes’ would allow for the exception to include a broader range of activities.¹²

The Committee is reassured that the Government is cognisant of the need to carefully determine the extent of the exception in Article 17.4.7(e)(vi) for the purposes of its implementation. The Committee believes that the types of activities outlined by the ATO and the OFLC will need to come within the compass of Article 17.4.7(e)(vi).

Coverage of proposed exceptions by Article 17.4.7(e)(i) – (vii)

A number of the further exceptions proposed to the Committee appear to be covered by the exceptions in Article 17.4.7(e)(i) – (vii). These are follows.

Circumvention for reverse engineering of software for interoperability purposes

Cybersource Pty Ltd proposed an exception for the reverse engineering of software for interoperability purposes:

Historically, Australian law has… explicitly allowed the right to reverse-engineer software for the purpose of interoperability. …An exemption to the anti-circumvention law is absolutely critical to prevent software providers, particularly monopolists or near monopolists, from limiting users’ right to access their own intellectual property or breaking interoperability. To protect these essential rights, there must be a TPM exception for the purposes of allowing interoperability.¹³

It appears to the Committee that the exception specified in Article 17.4.7(e)(i) will permit non-infringing TPM circumvention of precisely this nature.

Circumvention for software installed involuntarily or without acceptance, or where the user has no awareness a TPM or no reasonable control over the presence of a TPM

Ms Janet Hawtin submitted that software that is installed involuntarily or without acceptance by the recipient should not gain anti-circumvention protection:

A product which is involuntarily installed such as adware, spyware or any program which is installed without prior acceptance by the user of the specifics of the TPM and associated legality should not be protected.¹⁴

Mr James Cameron also proposed an exception for TPM circumvention where the user of a computer program has no awareness of a TPM or no reasonable control over the presence of a TPM in the program being used.¹⁵

Circumvention for security testing of software

The National Gallery of Australia (NGA) submitted that there should be an exception enabling the Gallery to ‘undertake routine security testing of software before installation’.¹⁶

It appears to the Committee that the exception specified in Article 17.4.7(e)(iv) will permit non-infringing circumvention of this nature. There is nothing in the specified exception to suggest that the testing of software would be excluded; indeed, it would seem to be self-evident that a computer, computer system or computer network is essentially useless without software.

Circumvention for individual privacy online

Ms Janet Hawtin raised the issue of TPM protection of personal information collected online:

A product which collects personal information of the user should not be protected by a TPM. I feel it is inappropriate for a package which collects information about me as person [sic] or as a web user to be collected in locked down software which may not be scrutinised for appropriate storage and use of that data.¹⁷

The Committee agrees with this concern and notes that the exception specified in Article 17.4.7(e)(v) should permit TPM circumvention for the purposes of maintaining individual privacy online.

Although the proposed exceptions discussed above appear to be covered by the exceptions specified in Article 17.4.7(e)(i), (iv) and (v), the Committee is conscious that the particular form which the seven exceptions in Article 17.4.7(e)(i) – (vii) will eventually assume in the implementing legislation is unknown at this time. The Committee is therefore of the view that the exceptions specified in Article 17.4.7(e)(i), (iv) and (v) should be interpreted in the implementing legislation so as to encompass the four proposed exceptions examined above.

The Committee is also of the view that the ultimate legislative form of the seven specified exceptions in Article 17.4.7(e)(i) – (vii), however they are drafted, should not narrow their scope in any way.

The criteria for further exceptions under Article 17.4.7 (e)(viii)

Under Article 17.4.7, any further exceptions granted under Article 17.4.7(e)(viii) must satisfy the following four criteria:

• The use of a work, performance, or phonogram must be non infringing (Article 17.4.7(e)(viii));
• A work, performance, or phonogram that is used must be in a particular class of works, performances, or phonograms (Article 17.4.7(e)(viii));
• An actual or likely adverse impact on the non-infringing use of a work, performance, or phonogram must be credibly demonstrated in a legislative review or proceeding(Article 17.4.7(e)(viii)); and
• The exception must not impair the adequacy of legal protection or the effectiveness of legal remedies against the circumvention of ETMs (Article 17.4.7(f)).

It is important to also note that, under Article 17.4.7(f), any exceptions to liability granted under Article 17.4.7(e)(viii) will only be for the act of circumvention as described in Article 17.4.7(a)(i). No exception granted under Article 17.4.7(e)(viii) will apply for the manufacturing or trafficking or dealing in circumvention devices or services as described in Article 17.4.7(a)(ii).

The appropriate interpretation of the criteria emerged as a significant issue in the evidence and was a critical factor for the Committee in assessing proposed exceptions under Article 17.4.7(e)(viii). The four criteria are discussed below.

Non-infringing use of a work, performance, or phonogram

In its evidence the AGD indicated that the terms ‘infringing’ and ‘non-infringing’:

are terms of art in the copyright field. They are applied to denote whether the use of material or material itself infringes copyright.¹⁸

The Department indicated its view that ‘the term infringing refers to infringing under Australian copyright law’¹⁹ and stated that:

the term ‘non-infringing uses’ in (e)(viii) may be seen in the Australian context as covering uses of copyright material that are authorised by the copyright owner or covered by existing exceptions or licences.²⁰

Particular class of works, performances, or phonograms

The USCO interpretation

The Committee’s attention was drawn to the interpretation of the United States Copyright Office (USCO) of its own class of works criterion for its TPM circumvention rule making process. In the October 2000 process the USCO indicated that a class of works should not be interpreted ‘by reference to some external criteria such as the intended use or users of the works’ but should be ‘defined primarily, if not exclusively, by reference to attributes of the works themselves’.²¹ In the more recent October 2003 rule making process, the USCO affirmed this interpretation of the criterion:

A “particular class of works” to be exempted from the prohibition on circumvention must be based upon attributes of the works themselves, and not by reference to some external criteria such as the intended use or users of the works.²²

In the 2003 process the USCO also stated that:

The starting point for any definition of a ”particular class” of works in this rulemaking must be one of the categories of works set forth in section 102 of the Copyright Act, but those categories are only a starting point and a “class” will generally constitute some subset of a section 102 category. The determination of the appropriate scope of a “class of works” recommended for exemption will also take into account the likely adverse effects on noninfringing uses and the adverse effects an exemption may have on the market for or value of copyrighted works.²³

Views expressed in the evidence

Much of the evidence to the inquiry regarding the proper Australian interpretation of the ‘particular class of works, performances, or phonograms’ criterion in Article 17.4.7(e)(viii) fell into two broad divisions. On one side, a number of organisations recommended that the approach of the USCO in interpreting its own class of works criterion should be followed in Australia . The Australian Federation Against Copyright Theft (AFACT), for example, submitted that:

the USCO approach is appropriate to be followed in Australia, given the harm to copyright owners that would be caused if widespread circumvention were permitted to occur. AFACT also notes the decision by the USCO not to permit a ‘particular class’ to be defined by the nature of the users in question. AFACT strongly supports this approach, due to the practical difficulties of confining access to circumvention devices to the particular class.²⁴

The Australian Record Industry Association (ARIA) also recommended the Australian adoption of the USCO approach,²⁵ as did the Interactive Entertainment Association of Australia (IEAA).²⁶ The International Intellectual Property Alliance (IIPA) stated that the USCO’s 2003 conclusion regarding the definition of a class of works according to attributes of works themselves should be ‘seriously considered’ by the Committee, and that the USCO’s rejection of classifying a class of works by the type of user or use is ‘critically important in keeping this proceeding [i.e. the Committee’s inquiry] within the bounds set out for it in the FTA and the terms of reference’.²⁷

On the other side, the Committee also received evidence arguing against the Australian adoption of the USCO interpretation. Ms Kimberlee Weatherall, for example, contended that the USCO interpretation:

is a very narrow view, adopted by the US Copyright Office on the basis of the US legislative history. This Committee need not, and should not do the same – first, because it is not required, and second, because the narrow interpretation has led to practical problems in the US:

• It disadvantages inexperienced people or uses, who may not have any idea how to ‘define’ a particular ‘class’;
• Sometimes, users with real, identifiable problems making non-infringing uses cannot identify a ‘particular class’ to the satisfaction of the Office, leading to the proposed exception failing without serious consideration.²⁸

Ms Weatherall also stated that the USCO interpretation ‘doesn’t match what the process is meant to be doing’ in that it prevents particular classes of works being identified according to TPMs themselves or according to the use of the work.²⁹ Ms Weatherall submitted that a particular class of work can legitimately be formulated in a range of ways ‘providing only that the class can sensibly be identified’, for example in reference to the type of use of a work, particular users of a work, the type of work itself as identified in the Copyright Act 1968, the distributed media, and the particular TPM used on the work.³⁰

The Department of Education, Science and Training (DEST) noted the USCO interpretation of its class of works criterion and submitted that ‘there is no reason to apply a similar restrictive interpretation for purposes [sic] of Australia’s obligations under AUSFTA’.³¹ DEST expressed the view that a class of material may be identified according to ‘any attributes of the material, or any characteristics relating to the form in which it is distributed or communicated’, but also that the question of the particular user of copyright material ‘does not go to the question of class of material’.³² DEST also submitted that:

any class of copyright subject matter (other than all subject matter) that is meaningful having regard to the rationale of the exception, is a permissible ‘class’. Indeed, a rationale-based approach seems necessary to promote technological neutrality, to avoid artificial distinctions and to harmonise with the design of existing exemptions under the Act.³³

In its oral evidence DEST also stated that:

any formulation or predication of classes of subject matter by reference to the category they fit into in the Copyright Act in terms of literary, dramatic, musical, artistic and so on, or by reference to other attributes of the way that the work is formatted, the medium on which it is stored, the way in which it is delivered to the consumer or, indeed, the fact that it is subject to a particular category of a technological protection measure is itself a characteristic that might serve to delineate the class of works. Anything that is referable to the work or its attributes might count as part of the predication.³⁴

The Australian Digital Alliance/Australian Libraries’ Copyright Committee (ADA/ALCC) submitted that:

Australia is not required to implement the provisions of the US Copyright Act. The fact that the US Copyright Office found it appropriate to implement an extremely narrow & specific set of exceptions should not govern Australian Copyright law. Rather, Australia’s obligations are to implement the AUSFTA in a manner consistent with the Australian environment³⁵

The ADA/ALCC recommended a broad interpretation of the particular class criterion for a number of reasons including technological neutrality, the importance of copyright material and the purpose of its use for libraries, educational and cultural institutions rather than the particular form of copyright material, the low value of narrow constructions for consumers, and an increased likelihood of definitional disputes.³⁶

The Committee’s approach

In its submission, the AGD observed that:

the AUSFTA does not provide guidance on how the word ‘class’ must be interpreted, aside from precluding an exception that would apply to all works (including cinematograph films), sound recordings or recorded performances.³⁸

The Department advised that ‘In accordance with the Vienna Convention, these words [‘particular class’] should be given their ordinary meaning’³⁹ and that:

Their ordinary meaning reflects something less than the whole and their context provides guidance on the issue of how much less than the whole. By way of context, the preceding reference to ‘work, performance or phonogram’ provides important guidance. That work, performance or phonogram will be part of a class that can be identified, be it broad or narrow.⁴⁰

Article 31(1) of the Vienna Convention on the Law of Treaties states that:

A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its objects and purpose.

The Committee agrees with the AGD’s view on these points. It is clear that, on a primary level, the ‘particular class of works, performances, or phonograms’ criterion cannot legitimately be interpreted to mean all works, performances or phonograms. ‘Particular class’, on its ordinary meaning in its context, entails the identification of a subset of works, performances, or phonograms, however that subset is identified.

The Committee also received evidence from the AGD in relation to the ‘works, performances, or phonograms’ component of the criterion, along with the possible ramifications for this of the presence of the ‘other protected subject matter’ category in the definition of ETM in Article 17.4.7(b). The Department indicated that, according to the Copyright Act 1968 and in the context of international conventions on copyright such as the Berne Convention for the Protection of Literary and Artistic Works and the World Intellectual Property Organisation (WIPO) Performances and Phonograms Treaty (WPPT), ‘works, performances, and phonograms’ would include ‘literary, musical, dramatic and artistic works, and cinematograph films’, along with ‘sound recordings’ and ‘performances fixed in phonograms’.⁴¹ The AGD further stated that:

The definition of an ETM itself is not an operative clause and does not, by itself, require liability to be imposed. …The liability scheme required under Article 17.4.7 is limited to only those ETMs that are used by authors, performers or producers of ‘works, performances and phonograms’.⁴²

The Department also indicated that published editions and broadcasts would not need to be included in the new TPM scheme as they do not come within the compass of protected copyright material under Article 17.4.7.⁴³ Accordingly, the Committee does not make any recommendations in this report concerning published editions or broadcasts.

Due to the practical difficulties facing the Committee outlined in Chapter 1, the Committee does not consider itself to be in a position to formulate a firm definition of the ‘particular class of works, performances, or phonograms’ criterion at this time. However, the Committee’s approach to the interpretation of this criterion is as follows.

so long as Australia remains consistent with its international obligations, then the AUSFTA does not constrain future government’s [sic] abilities to make laws relevant to intellectual property to suit our social and legal environment.⁴⁶

It is also worth noting that the legislative framework and history surrounding copyright regulation in the US is not the legislative framework and history surrounding copyright regulation in Australia. Australia’s legislative copyright regime and regulatory history can be clearly differentiated from that of the US. Thus, while the USCO interpretation may be perfectly correct in the US regulatory context, it has no automatic congruence or weight with the Australian regulatory context.

There are also a number of substantial considerations which argue against the adoption of the USCO interpretation in Australia:

• Formulating ‘a particular class of works, performances, or phonograms’ only according to attributes of the works, performances or phonograms themselves and to the exclusion of external criteria would be undesirably narrow and restrictive, particularly given the current formulation of the permitted purposes in the Copyright Act 1968 and the diverse and rapidly changing nature of technology. A formulation of ‘a particular class of works, performances, or phonograms’ should be able to draw on a range of pertinent factors so as to accommodate a variety of circumstances and technologies, be in accord with the current approach in the Act, and achieve a level of technological neutrality.
• None of the seven specified exceptions in Article 17.4.7(e)(i) – (vii) have been framed in compliance with the USCO approach of formulating classes of works strictly according to attributes of the works themselves and to the exclusion of external criteria. A number of these exceptions identify broad categories of copyright material (for example Article 17.4.7(e)(ii), (iii), (iv) and (vii)), and a number also delineate copyright material with clear reference to external factors such as the availability of the material or the legal status of a transaction (Article 17.4.7(e)(i), (ii) and (vii)). All of the exceptions are framed with reference to external factors such as an identified party/parties, the user of copyright material, an activity of the user, the use of the material, or the purpose of the use of the material. Particularly striking is the exception in Article 17.4.7(e)(vi), which does not refer to copyright material or works at all. Given this context, it would be absurd to adopt an interpretive approach to the ‘particular class of works, performances, or phonograms’ criterion that would create inconsistency between the exception in Article 17.4.7(e)(viii) and the other exceptions in Article 17.4.7(e)(i) – (vii).
• The Committee does not consider that the role and position of the USCO is analogous to that of this Committee in its present inquiry. The USCO functions under constraints (most particularly, the statutory constraints imposed by the US copyright legislation and the DMCA) that do not apply to this Committee, and, unlike this Committee, the USCO is not concerned with policy issues or with legislation that will create a national TPM liability scheme. In its October 2000 rule making process the USCO stated that:

  While many commenters [sic] and witnesses made eloquent policy arguments in support of exemptions for certain types of works or certain uses of works, such arguments in most cases are more appropriately directed to the legislator rather than to the regulator who is operating under the constraints imposed by section 1201(a)(1).⁴⁷

This Committee is under no such constraints, and the consideration of policy arguments in the context of forthcoming legislation is an integral part of its role in this inquiry. The Committee agrees with the observation of Ms Kimberlee Weatherall here that:

The process now being undertaken by the Committee – considering what exceptions are necessary for Australian conditions – is more analogous to the deliberations that occurred within Congress prior to the US Copyright Office ‘taking over’ with its triennial reviews.⁴⁸

Secondly, there are a number of factors which strike the Committee as being pertinent and appropriate for the formulation of ‘a particular class of works, performances, or phonograms’. These are as follows:

• Attributes of works, performances, or phonograms;
• Reference to the relevant category of copyright material as set out in the Copyright Act 1968 – for example literary, dramatic, musical or artistic works, performances, and sound recordings;
• Attributes of the form or media in which works, performances, or phonograms are distributed or stored;
• The presence of particular TPMs on or with works, performances, or phonograms;
• Identified users of works, performances, or phonograms, or categories of users of works, performances, or phonograms;
• The purpose of uses of works, performances, or phonograms; and
• The purpose of proposed circumvention of TPMs.

The question of whether any one or more of these factors should always be present in a formulation of ‘a particular class of works, performances, or phonograms’, whether there should be some minimum (or maximum) number of factors in a formulation, or the range of appropriate combinations of these factors, is a matter for the Government. It does seem to the Committee, however, that any formulation of ‘a particular class of works, performances, or phonograms’ should have a proper grounding in the works, performances or phonograms concerned. Regardless of the specific factor or factors that, apart from information about the copyright material itself, are utilised to formulate ‘a particular class of works, performances, or phonograms’, there should be a sufficient level of detail about the copyright material concerned.

Thus, for example, ‘a particular class of works, performances, or phonograms’ that was formulated according to an identified user, or a particular TPM, or attributes of the storage media, or the purpose of the use, would also need to specify sufficient information about the copyright material concerned. This information could be information regarding an attribute of the material itself or a reference to the relevant category of copyright material set out in the Copyright Act 1968. Without this grounding, excessively broad formulations that could emerge (for example ‘works used by educational institutions’) would not, in the Committee’s view, satisfy the requirements of the criterion.

The Committee is of the view that the Government should adopt the approach to the ‘particular class of works, performances, or phonograms’ criterion set out above when preparing the legislation implementing Article 17.4.7. The Committee has followed this approach when assessing proposed exceptions under Article 17.4.7(e)(viii) in Chapter 4.

Credibly demonstrated actual or likely adverse impact on non-infringing uses

The USCO interpretation

As with the ‘particular class of works, performances, or phonograms’ criterion, the Committee’s attention was drawn to the USCO’s interpretation of its own adverse effect criterion for its TPM circumvention rule making process. In the October 2000 process the USCO stated that:

The legislative history makes clear that a determination to exempt a class of works from the prohibition on circumvention must be based on a determination that the prohibition has a substantial adverse effect on noninfringing use of that particular class of works.⁴⁹

The USCO also noted that the rule making proceeding should focus on ‘distinct, verifiable, and measurable impacts, and should not be based upon de minimis impacts’.⁵⁰ In the more recent October 2003 rule making process, the USCO affirmed its 2000 stance and also indicated its view regarding the evidentiary burden on those applying for exceptions:

Proponents of an exception have the burden of proof. In order to make a prima facie case for an exemption, proponents must show by a preponderance of the evidence that there has been or is likely to be a substantial adverse effect on noninfringing uses by users of copyrighted works. De minimis problems, isolated harm or mere inconveniences are insufficient to provide the necessary showing.⁵¹

In addition, in both the 2000 and 2003 rule making processes the USCO stated its interpretation of the ‘likely’ component of its adverse effect criterion:

it appears that a similar showing of substantial likelihood is required with respect to such future harm. …”Likely” – the term used in section 1201 to describe the showing of future harm that must be made – means “probable”, “in all probability,” or “having a better chance of existing or occurring than not” [2000 process].⁵²

for proof of “likely” adverse effects on noninfringing uses, a proponent must prove by a preponderance of the evidence that the harm alleged is more likely than not; a proponent may not rely on speculation alone to sustain a prima facie case of likely adverse effects on noninfringing uses [2003 process].⁵³

Views expressed in the evidence

As with the ‘particular class of works, performances, or phonograms’ criterion, much of the evidence to the inquiry regarding the proper Australian interpretation of the credibly demonstrated actual or likely adverse impact criterion in Article 17.4.7(e)(viii) fell into two broad categories. On one side, a number of organisations either recommended a similar approach in Australia to that followed by the USCO or submitted that Australia should adopt the USCO’s interpretation of its own adverse effect criterion. The IEAA contended that ‘due to the similarity of the investigations required to be conducted, the Committee should largely adopt the analysis of the [US] Copyright Office in its own approach’.⁵⁴ ARIA equated the meaning of the term “credible” with the USCO interpretation:

The word “credible” indicates that the evidence provided in support of the exception should be objective and based on factual information rather than speculation or opinion. This is… consistent with the approach taken in the United States, where, even without “credibly demonstrated” wording, the Librarian found that “in order to make a prima facie case for an exemption, proponents must show by a preponderance of the evidence that there has been or is likely to be a substantial adverse effect on non-infringing uses by users of copyright works”.⁵⁵

ARIA also submitted that:

in order to justify an exception, the adverse impact should have broad effect and should be more than an isolated problem. …if only a very small percentage of non-infringing uses within a particular class of works may be affected, there may be insufficient adverse impact.⁵⁶

AFACT argued that the USCO interpretation:

should be similarly applied in the current enquiry. The standards set out by the USCO are appropriate to ensure compliance with the provisions of the FTA and the requirement in the Article that any alleged harm to non-infringing uses must be “credibly demonstrated”. In particular, this approach is consistent with the common principle in Australian copyright law that copyright policy must carefully balance the interests of copyright owners and copyright users.⁵⁷

In its submission the Business Software Association of Australia (BSAA) emphasised the USCO interpretation of its adverse effect criterion,⁵⁸ and the IIPA submitted that the USCO interpretation of the ‘likely’ component of the criterion should be followed by the Committee.⁵⁹

On the other side, a number of organisations argued against the adoption of the USCO interpretation in Australia. The Special Broadcasting Service Corporation (SBS) stated that:

Some submissions made to this inquiry adopt the US approach and suggest that the threshold for proving adverse effect be set very high, that any exception must be supported by evidence of adverse effects going beyond mere inconvenience. However, let us remember that this new regime is effectively criminalising the existing and legal activities of Australians in their daily business and private lives. Adverse effects should be provable whenever the prohibition is shown to interfere with these existing and legal activities, particularly where the interference may result in higher business costs to small and medium enterprises or the restriction of free speech or other private rights of individuals. As we have stated in our submission, this committee is not bound by the US approach, and you can form your own view of what is appropriate in local conditions. ⁶⁰

The Flexible Learning Advisory Group (FLAG) submitted that ‘in agreeing paragraph 7(e)(viii) the government made it clear that the paragraph was intended to protect educational interests’, and that this background and intent permits and indeed mandates the adoption of ‘a different and more generous approach to the granting of exceptions’ with regard to the credibly demonstrated actual or likely adverse impact criterion.⁶¹

DEST contended that:

any adverse impact – actual or likely – will suffice. It is significant in DEST’s view that the AUSFTA provision does not say that the impact must be ‘substantial’. …it is necessary under the US DMCA to show that significant activities are inhibited. There is no reason for Australia to follow this interpretation. If it was intended that users demonstrate adverse impacts of a ‘substantial’ degree, it would have been exceedingly simple for the drafters of AUSFTA [sic] to include that word in Article 17.4.7(e)(vii) [sic]. The fact that they did not is telling. Accordingly, DEST submits that the ‘adverse impact’ criterion is met wherever users can credibly demonstrate a likely adverse impact on non-infringing use – even if that is manifest only occasionally.⁶²

Ms Kimberlee Weatherall submitted that ‘the Committee should accept a flexible view’,⁶³ adding that ‘reasonable anticipation’ should be sufficient for the ‘likely’ element of the criterion in the context of evolving technology and that credible evidence of adverse impacts from overseas should be sufficient to establish an adverse impact in Australia.⁶⁴

Some organisations proposed their own formulations for the threshold for demonstrating an adverse impact. The Australian Copyright Council (ACC), for example, proposed a test whereby it would need to be shown that:

access to the work is not available by other means, including by purchasing a copy at a reasonable price or getting access to a copy of the work held in a library; and the public interest in the person getting access to the information in the work by circumventing a TPM is greater than the public interest in the protection of the work against unauthorised access.⁶⁵

The ACC also submitted that an adverse impact ‘is not credibly demonstrated unless those who would be affected by the exemption have an opportunity to respond to evidence submitted by those seeking the exemption’.⁶⁶

The Copyright Agency Limited (CAL) submitted that the benefit of permitting TPM circumvention of a class of works must be shown to outweigh the detriment to copyright owners.⁶⁷

The Copyright Advisory Group of the Ministerial Council on Employment, Education Training and Youth Affairs (CAG) stated that:

there will be likely or actual adverse impact on non-infringing uses for the present purposes if not being able to use a circumvention device or service would place an unreasonable burden on the user. This might be because of an unreasonable:

• increase in cost to enable access or use;
• level of difficulty to obtain access or use; or
• effect on the choices available to users;
• caused by the inability or difficulty of accessing material in an unprotected format.⁶⁸

CAG also indicated that:

the adverse or likely [sic] impact on non-infringing use might also be evaluated by reference to the number of people affected. Further, where the impact on each individual person might be minimal but the number of people impacted is significant, then the cumulative adverse impact should be sufficient to justify an exception under Article 17.4.7(e)(viii).⁶⁹

The Committee’s approach

As with the ‘particular class of works, performances, or phonograms’ criterion examined above, the Committee does not consider itself to be in a position to formulate a firm definition of the credibly demonstrated actual or likely adverse impact criterion at this time.

Actual or likely adverse impact

Regarding the ‘actual’ and ‘likely’ elements of the criterion, the AGD submitted that:

The person or body seeking the exception must demonstrate that the requisite impact is ‘actual or likely’ – that is, it is already happening or is reasonable [sic] foreseeable. As this is the first ‘legislative or administrative review’ to consider possible exceptions under Article 17.4.7(e)(viii) and the liability scheme required under Article 17.4.7 has yet to be implemented, it may be difficult to establish an ‘actual’ impact. For the purposes of the Committee’s inquiry, a person or body seeking an exception should establish that an adverse impact is reasonably foreseeable when the prohibition on circumvention under Article 17.4.7 is implemented. Once the legislative scheme is in place, actual adverse impacts may become apparent and prompt further requests for additional exceptions to be included in the scheme.⁷⁰

The AGD also gave evidence regarding the ‘adverse impact’ element of the criterion:

The term ‘adverse impact’ is not defined under the AUSFTA. In accordance with the Vienna Convention, the words should be given their ordinary meaning. Whether an adverse impact is demonstrated should be determined on a case-by-case basis.⁷¹

• As the AUSFTA does not define ‘actual’ adverse impact, the ordinary meaning of the term should be applied in accordance with article 31(1) of the Vienna Convention on the Law of Treaties. The ordinary meaning of ‘actual’ does not contain any requirements concerning orders of magnitude; it merely requires that the relevant situation exist in fact. To stipulate that an adverse impact should be substantial, therefore, would be to depart from this ordinary meaning and import a separate condition.
• If the drafters of the AUSFTA had intended that an adverse impact should be substantial, they would have included that term or an equivalent in Article 17.4.7(e)(viii). The Committee regards the absence of such an inclusion as significant.
• There may well be instances where impacts cannot be precisely measured but will nevertheless be credibly demonstrable as adverse impacts. An example would be the inability of an educational institution to comply with disability education standards due to strictures on TPM circumvention - a clear adverse impact, but not necessarily susceptible of precise measurement. Any requirement that impacts be substantial could preclude such genuine adverse impacts from being considered.

In terms of the ‘likely’ element, the Committee agrees with the AGD’s interpretation cited above. In the Committee’s view, an adverse impact that is reasonably foreseeable should be sufficient to satisfy the criterion in this respect. While a mere possibility of an adverse impact with no supporting evidence as to likelihood would presumably not be sufficient, the Committee does not believe that the USCO approach of requiring a ‘substantial likelihood’ of an adverse impact or requiring an adverse impact to be shown ‘in all probability’ should be followed in Australia. Again, the Committee considers that the factors outlined at paragraphs 3.59 – 3.60 above and at paragraph 3.61 regarding the comparative positions of the USCO and the Committee apply here. One other consideration also applies:

• A threshold of the type required by the USCO, particularly in conjunction with the USCO stipulation that there needs to be a ‘preponderance of the evidence’ to demonstrate likelihood, is far too high. Such a threshold virtually requires the proponent of the exception to prove the case beyond doubt before the relevant circumstances have arisen.

In terms of the ‘adverse impact’ element itself, the Committee agrees with the AGD that this question should be determined on a case-by-case basis. It is doubtful that any one formulation of what constitutes an adverse impact will suit all circumstances or permutations of what can legitimately be classified as an adverse impact. However, the Committee is not of the view that the USCO position that incidents of ‘isolated harm’ are not adverse impacts should be adopted in Australia. Firstly, the factors outlined at paragraphs 3.59 – 3.60 above and at paragraph 3.61 regarding the comparative positions of the USCO and the Committee apply here. A number of other considerations also apply:

• Individual or isolated incidents of alleged adverse impacts should not prima facie be disregarded. Wherever a TPM has a negative effect (particularly where a financial impost in involved), it is entirely possible that an adverse impact may be credibly demonstrated, and the evidence should be considered. To take the example of DVD region coding, the Committee cites again the solution envisaged by AFACT for consumers hindered by region coding measures:

  Each player can be changed five times on a region. If someone cannot wait the additional three months that it is going to take for the film they saw in the US to be available in Australia or if they are a foreign film buff and are interested in a Japanese film that is never likely to surface in Australia, they can simply purchase a DVD player coded to the code that applies in Japan and play every DVD that they want to buy. …you can have a DVD player that you keep for your Japanese films.⁷²

  As stated in Chapter 2, the Committee seriously doubts that Australian consumers would regard such solutions as reasonable. The financial impost resulting from having to purchase multiple DVD players in order to use lawfully acquired copyright material would, in the Committee’s view, certainly qualify as an adverse impact on that use.

• If the drafters of the AUSFTA had intended that incidences of isolated harm should not be within the compass of ‘adverse impact’, they would have included a specification to this effect in Article 17.4.7(e)(viii). The Committee regards the absence of such an inclusion as significant. in

The Committee does not doubt, however, that in some instances alleged adverse impacts may clearly be more in the nature of minor nuisances (for example where there is no demonstrated material negative consequence or impost). Again, no one formulation of what constitutes a minor nuisance (or, in USCO terms, a ‘mere inconvenience’) will suit all circumstances and a case-by-case approach will be necessary.

While the existence of an adverse impact on a non-infringing use should be determined on a case-by-case basis, two types of circumstance in particular strike the Committee as being pertinent for the credible demonstration of an adverse impact:

• A financial impost relating to the use of works, performances, or phonograms incurred or likely to be incurred directly as a result of an ability to circumvent a TPM and not incurred or likely to be incurred otherwise; and
• An actual or likely inability to use, or an actual or likely material impediment to the use of, works, performances, or phonograms directly as a result of an inability to circumvent a TPM, especially where that use is indispensable or necessary:
  • for the fulfilment of statutory obligations, roles, functions, mandates, or purposes; or
  • in the course of business, occupation, work, or the discharge of professional responsibilities; or
  • for the maintenance of a quality of life.

Credibly demonstrated

In terms of the ‘credibly demonstrated’ element, the AGD submitted that:

The AUSFTA does not define what amounts to a credible demonstration so the words should be given their ordinary meaning. A credible demonstration would require that the Committee be satisfied that there is reasonable evidence to make the case in support of an exception. It will be up to the person or body seeking an exception to demonstrate the requisite impact to the satisfaction of the body conducting the legislative or administrative review or proceeding.⁷³

Clearly, under Article 17.4.7, the proponent of an exception carries the evidentiary burden of credibly demonstrating the actual or likely adverse impact as a result of the inability to circumvent a TPM. The question is how great this burden should be. In the Committee’s view, the AGD’s interpretation of the ‘credibly demonstrated’ evidentiary requirement is a sensible one. Reasonable, believable evidence adduced to establish an adverse impact should be sufficient to satisfy the criterion in respect of the ‘credibly demonstrated’ element. The Committee does not believe that the USCO approach of requiring a ‘preponderance of the evidence’ to establish an adverse effect should be written into Australian copyright law. Again, the factors outlined at paragraphs 3.59 – 3.60 above and at paragraph 3.61 regarding the comparative positions of the USCO and the Committee apply here. A number of other considerations also apply:

• As the AUSFTA does not define ‘credibly’ demonstrated, the ordinary meaning of the term should be applied in accordance with article 31(1) of the Vienna Convention on the Law of Treaties. The ordinary meaning of ‘credibly’ does not contain any requirements concerning preponderance; it requires only that the argument or evidence in question is believable. To stipulate that an adverse impact must be demonstrated by a preponderance of evidence, therefore, would be to depart from this ordinary meaning and import a separate condition.
• If the drafters of the AUSFTA had intended that a preponderance of the evidence would be necessary to credibly demonstrate an adverse impact, they would have included such a requirement in Article 17.4.7(e)(viii). The Committee regards the absence of such a requirement as significant.
• The high evidentiary burden entailed by requiring a preponderance of evidence could favour those with the resources or legal representation to adduce a preponderance of evidence and disadvantage those without such resources or representation. The liability scheme as it is implemented in Australia should not contain the potential for such inequity.
• Focusing the evidentiary requirement on the preponderance of evidence could lead to the undesirable situation of aggregate
• evidence of doubtful probative value outweighing evidence with probative value but of a lesser volume. Evidence of probative value, regardless of the case it supports, should receive careful consideration even if it comes from a single source or is small in volume.

The Committee agrees with Ms Kimberlee Weatherall that credible evidence of adverse impacts from overseas should be sufficient to credibly demonstrate an adverse impact in Australia. However, the Committee is strongly of the view that any such evidence would need to be of overseas circumstances identical or very similar to the relevant circumstances in Australia. Evidence of overseas circumstances differing in any significant degree from the relevant circumstances in Australia should not have probative value.

As noted at paragraph 3.79 above, the ACC contended that an adverse impact cannot be credibly demonstrated without those affected by proposed exceptions having an opportunity to respond. It is certainly conceivable that an adverse impact could be credibly demonstrated by evidence without the benefit of external comment, but the Committee is nevertheless of the view that, from a natural justice perspective, opportunity for comment on proposed exceptions should be built into the review process under the liability scheme. This and other matters relating to future legislative or administrative reviews or proceedings are dealt with in Chapter 5.

The Committee does not believe that the balance between copyright owners and users is an appropriate factor to consider when examining the credibly demonstrated actual or likely adverse impact criterion under Article 17.4.7(e)(viii). It is the impact on non-infringing uses of works, performances, or phonograms that is the focus of this criterion, not impacts in other areas.

The Committee is of the view that the Government should adopt the approach to the credibly demonstrated actual or likely adverse impact criterion set out above when preparing the legislation implementing Article 17.4.7. The Committee has followed this approach when assessing proposed exceptions under Article 17.4.7(e)(viii) in Chapter 4.

No impairment of the adequacy of legal protection or the effectiveness of legal remedies against circumvention of ETMs

The USCO interpretation

The USCO does not appear to have a requirement of this nature.

Views expressed in the evidence

The final criterion in Article 17.4.7(f) attracted a range of commentary in the evidence. The ACC, for example, noted that:

The issue there is that once circumvention has been achieved there is a genie out of the bottle issue—it can be difficult to confine the effects of the circumvention to the particular person who has access to it. That is why it is an issue that has to be treated quite seriously in allowing people to circumvent.⁷⁴

AFACT submitted that the Committee should:

recognise that to allow access to circumvention devices for some classes of users in circumstances where it is not practically possible to confine the use of a circumvention device or service to that class is likely to breach Article 17.4.7(f) of the FTA in that it would make the legal remedies available to copyright owners in relation to TPMs and circumvention devices and services practically ineffective.⁷⁵

ARIA suggested that the Committee have regard to the following factors set out in the US copyright legislation when considering the criterion:

• Availability for use of copyright works
• Availability for use of works for non profit archival, preservation and educational purposes
• Impact of the prohibition on the circumvention of TPMs on criticism, comment, news reporting, teaching, scholarship or research
• Effect of circumvention of TPMs on the market value for or value of copyright works.⁷⁶

The BSAA stated that ‘as a general proposition, BSAA believes that this requirement dictates that any exception must be narrowly crafted’.⁷⁷

Ms Kimberlee Weatherall argued that:

the provision cannot mean that there should be no impairment (since by definition an exemption ‘impairs’ the prohibition): the impairment would need to be significant for this provision to make sense.⁷⁸

DEST submitted that this criterion is ‘more relevant to the exceptions for ‘dealing’’⁷⁹ than to exceptions for use, and that:

Where mere use is involved it is difficult to see where enforcement measures may be impaired, as long as the circumvention process that is developed is not marketed and is protected from disclosure or use by others. DEST submits that the ‘no impairment’ criterion would generally be met as a matter of course in those cases where the exception applies only to institutional users… it is highly unlikely that educational and other institutions would expose themselves to the risk of liability for dealing in circumvention services or circumvention devices developed by them.⁸⁰

SBS contended that proponents of exceptions should not have the evidentiary burden in addressing this criterion:

users should not have some sort of negative onus to prove that an exception to preserve their existing rights will not impair the legal protection of TPMs. To do so would be to presume that users are pirates. As we know, the majority are not—particularly broadcasters. Once an adverse effect justifying an exception is shown, those who oppose the exception should, in our view, demonstrate why they cannot prevent piracy of their copyright products through other means.⁸¹

The Committee’s approach

As with the ‘particular class of works, performances, or phonograms’ and the credibly demonstrated actual or likely adverse impact criteria examined above, the Committee does not consider itself to be in a position to formulate a firm definition of the non-impairment of legal protection or legal remedies criterion at this time. However, the Committee’s approach to the interpretation of this criterion is as follows.

As noted at paragraph 3.8 above, this criterion will apply to all exceptions in Article 17.4.7(e) – that is, both the seven specific exceptions in Article 17.4.7(e)(i) – (vii) and any further exceptions permitted under Article 17.4.7(e)(viii). Thus any exceptions permitted under Article 17.4.7(e)(i) – (vii) to liability for manufacturing or trafficking in circumvention devices or services, or any exceptions permitted under Article 17.4.7(e)(viii) to liability for the act of circumvention, will only be permitted to the extent that they do not impair the adequacy of legal protection or the effectiveness of legal remedies against circumvention of ETMs.

It is particularly difficult to approach this criterion in advance of the liability scheme, for it refers to interactions between legal protections/remedies and exceptions that do not yet exist. On one level the criterion could be said to be somewhat oxymoronic within Article 17.4.7, for the very existence of exceptions to a liability scheme will arguably impair the adequacy of that liability scheme. Be that as it may, it seems to the Committee that the basic aim of the criterion is to ensure that permitted exceptions under the liability scheme do not weaken the relevant legal protections and remedies existing in Australian law. The phrase ‘to the extent that’ in Article 17.4.7(f) suggests that exceptions which contain elements both complying with and contravening the criterion will remain viable to the extent of the compliance.

One clearly pertinent aspect of Australia’s copyright framework is the Copyright Amendment (Digital Agenda) Act 2000. The Committee notes that one of the aims of the passage of this Act was to enable Australia to accede to two treaties agreed to at the WIPO Diplomatic Conference of 1996 – the WPPT and the WIPO Copyright Treaty (WCT). The Explanatory Memorandum to the Copyright Amendment (Digital Agenda) Bill 1999 stated that:

Australia is unable to accede to these treaties unless the Copyright Act is amended to implement the package of standards in the new treaties including a new right of communication to the public, exceptions, remedies against the defeat of technological protection measures and remedies against the abuse of rights management information.⁸²

Article 18 of the WPPT and Article 11 of the WCT both require parties to provide adequate legal protection and effective legal remedies against the circumvention of ETMs, and the Copyright Amendment (Digital Agenda) Act 2000 was enacted partially in order to implement these specific treaty obligations in Australia. The Committee can only assume therefore that the Government was mindful of its obligations in this area when it negotiated the text of Article 17.4.7, and that any exceptions permitted under Article 17.4.7(e)(i) – (vii) will not impair the adequacy of legal protection or the effectiveness of legal remedies against ETM circumvention.

DEST observed that exceptions permitted under Article 17.4.7(e)(viii) will be unlikely to fall foul of the non-impairment criterion given that they relate to uses of copyright material. DEST observed that the criterion will be more relevant to other exceptions permitted under Article 17.4.7 which allow for the manufacturing or trafficking or dealing in circumvention devices or services.⁸³

It does not seem to the Committee that the criterion will necessarily impose a great evidentiary burden on the proponents of exceptions. While it will obviously be in proponents’ interests to frame their proposed exceptions carefully in order to satisfy the criterion, the question of whether a proposed exception will impair legal protection or remedies will be determined independently by the relevant body conducting the legislative or administrative review or proceeding. It will be the role and responsibility of this body to ensure that exceptions satisfy this criterion, not that of proponents or opponents of exceptions.

The Committee is of the view that the Government should adopt the approach to the non-impairment of legal protection or legal remedies criterion set out above when preparing the legislation implementing Article 17.4.7. The Committee has followed this approach when assessing proposed exceptions under Article 17.4.7(e)(viii) in Chapter 4.

No device or service exception for Article 17.4.7(e)(v), (vii) and (viii) under Article 17.4.7(f)

As noted at paragraph 3.6 and Table 3.1 above, under Article 17.4.7(f) only the exceptions specified in Article 17.4.7(e)(i) – (iv) and (vi) will be available to the liability for manufacturing or trafficking or dealing in circumvention devices or services as described in Article 17.4.7(a)(ii) regarding access control ETMs, and only the exceptions specified in Article 17.4.7(e)(i) and (vi) will be available to the liability for manufacturing or trafficking in circumvention devices or services as described in Article 17.4.7(a)(ii) regarding copyright protection ETMs. These exceptions to liability for manufacturing or trafficking or dealing in circumvention devices or services will not, therefore, apply for any of the exceptions permitted under Article 17.4.7(e)(v), (vii), and (viii).

In the Committee’s view, this is a lamentable and inexcusable flaw in the text of Article 17.4.7; indeed, it is a flaw that verges on absurdity. The effect is to make Article 17.4.7 work against itself, for it creates the potential scenario of those with permitted exceptions to circumvent under Article 17.4.7(e)(v), (vii) or (viii) being denied the very tools to perform this circumvention. In this light, these exceptions appear to be little more than empty promises.

Further, the flaw in Article 17.4.7 is at odds with the clear expectation during the negotiation of the AUSFTA that certain exceptions could be realised under the liability scheme in Australia.⁸⁴ The AGD noted in its evidence that:

(f)(ii) cannot operate to render (e)(v), (vii) and (viii) ineffective. Effect must be given to all provisions of a treaty.⁸⁵

Clearly, therefore, a solution to this flaw needs to be found.

Possible solutions

Three main solutions to the flaw in Article 17.4.7 were suggested.

Creation and non-commercial importation of circumvention devices

The AGD submitted that individuals or organisations could create their own circumvention devices or import devices on a non-commercial basis:

This exclusion does impact on the means available to persons or organisations seeking to make use of those exceptions. …To give effect to the exceptions under (e)(v), (vii) and (viii), persons or organisations will need to have access to devices or services that do not fall within the scope of (a)(ii). Persons or organisations can create their own circumvention devices or import a circumvention device for a non-commercial purpose.⁸⁶

Sound policy demands that a person’s freedom to take advantage of an exception from liability should not be determined by whether that person actually has (or can employ) the technical human capital to circumvent.⁸⁷

It is not even certain that the creation of a circumvention device on such a non-commercial basis would escape the restriction on the manufacturing of devices, products or components stipulated in Article 17.4.7(a)(ii). To at least put this particular issue beyond question, however, and to enable those who are willing and able to make their own devices to do so, the legislation implementing Article 17.4.7(a)(ii) should, as far as is possible within the confines of giving effect to the AUSFTA, clarify the term ‘manufactures’ in order to allow for the non-commercial creation of circumvention devices for the purpose of utilising the relevant permitted exceptions.

As regards the other element of the solution envisaged by the AGD – the importation of circumvention devices for a non-commercial purpose – it appears to the Committee that the text of Article 17.4.7(a)(ii) will prohibit such importation of devices. Article 17.4.7(a)(ii)(C) will presumably ensure that even the non-commercial importation of circumvention devices, products or components will not be permitted. Even if it will be possible to import devices non-commercially, however, it is not reasonable to impose the burden of having to import devices from overseas on those with the relevant permitted exceptions.

Third party circumvention

The Intellectual Property Committee of the Law Council of Australia (IPC) suggested that allowing third parties to undertake circumvention on behalf of those with permitted exceptions under Article 17.4.7(e)(v), (vii) or (viii) could be a workable solution:

There seems to be sufficient scope within the regime for someone who has the benefit of an exception to avail themselves of services from someone else to actually circumvent access control. I suspect that those services should be supplied consistent with the requirements of the FTA regime, pursuant to some sort of rigorous controls such as the existing declaration system that is in place already for the permitted purposes supply under our existing law.⁸⁸

The Committee observes however that:

• Third parties would be subject to the same strictures in Article 17.4.7(a)(ii) governing the manufacturing or trafficking or dealing in circumvention devices, products or components as those holding permitted exceptions under Article 17.4.7(e)(v), (vii) or (viii); and
• By virtue of Article 17.4.7(a)(ii), particularly Article 17.4.7(a)(ii)(B) and (C), third parties would presumably be prevented from providing circumvention services for those with permitted exceptions under Article 17.4.7(e)(v), (vii) or (viii).

The AGD stated that:

The position of third parties is governed by the operation of Article 17.4.7(a)(ii) and (f)(ii) and (iii). If the actions of third parties would attract liability under (a)(ii), their capacity to assist:

• persons or organisations seeking to make use of exceptions in (e) in circumventing access control ETMs will be governed by the application of (f)(ii),
• persons or organisations seeking to circumvent copy control ETMs will be governed by the application of (f)(iii).⁸⁹

Conclusion

In essence, no satisfactory solution has been proposed to the egregious flaw in the text of Article 17.4.7 regarding the lack of manufacturing, trafficking or dealing exceptions for devices or services for the circumvention exceptions possible under Article 17.4.7(e)(v), (vii) or (viii). The Committee is strongly of the view that the Government must devise a workable and adequate solution to this problem prior to implementation of the liability scheme. Those with exceptions will have to be able to lawfully exercise them, whether according to a statutory licensing system or approval regime. Any lack of a solution will seriously endanger the viability of many exceptions permitted under Article 17.4.7(e)(v), (vii) and (viii) once the scheme is in place.

The current permitted purposes are listed in Chapter 2. Back

ATO, Submission No. 9, para. 7. Back

ATO, Submission No. 9, para. 8. Back

ATO, Submission No. 9, para. 6. Back

ATO, Submission No. 9, para. 9. Back

OFLC, Submission No. 44, pp. 2, 5. Back

OFLC, Submission No. 44, p. 6. Back

Dr Anne Fitzgerald, Submission No. 59, p. 10. Back

AGD, Submission No. 52.1, p. 3. Back

AGD, Submission No. 52.1, p. 3. Back

AGD, Submission No. 52.1, p. 3. Back

NGA, Submission No. 18, p. 3. Back

Ms Janet Hawtin, Submission No. 6, p. 2. Back

IEAA, Submission No. 43, p. 8. Back

IIPA, Submission No. 10, p. 6. Back

Ms Kimberlee Weatherall, Submission No. 38, p. 19. Back

Ms Kimberlee Weatherall, Submission No. 38, pp. 20, 21. Back

DEST, Submission No. 48, p. 23. Back

DEST, Submission No. 48, p. 23. See also DEST, Submission No. 48.1, para. 17. Back

DEST, Submission No. 48, p. 23. Back

AVCC, Submission No. 53, p.11. Back

AGD, Submission No. 52, p. 14. Back

AGD, Submission No. 52, p. 14. Back

Mr Mark Jennings, Transcript of Evidence, 5 December 2005, p. 26. Back

AGD, Submission No. 52, p. 14. See also Submission 52.1, pp. 1-2. Back

ACC, Submission No. 7, p. 2. Back

Ms Kimberlee Weatherall, Submission No. 38, p. 14. Back

AFACT, Submission No. 39, p. 10. Back

BSAA, Submission No. 41, p. 4. Back

IIPA, Submission No. 10, p. 5. Back

DEST, Submission No. 48, p. 24. Back

Ms Kimberlee Weatherall , Submission No. 38, p. 22. Back

Ms Kimberlee Weatherall, Submission No. 38, p. 22. Back

CAL, Submission No. 16, para. 36. Back

CAG, Submission No. 40, p. 9. Back

CAG, Submission No. 40, p. 9. Back

AGD, Submission No. 52, p.14. Back

AGD, Submission No. 52, p.13. Back

AFACT, Submission No. 39, p. 12. Back

ARIA, Submission No. 32, section V. Back

BSAA, Submission No. 41, p. 4. Back

Ms Kimberlee Weatherall, Submission No. 38, p. 23. Back

DEST, Submission No. 48, p. 24. Back

DEST, Submission No. 48, p. 24. Back

AGD, Submission No. 52.2, p. 1. Back

AGD, Submission No. 52.2, p. 1. Back

IPC, Submission No. 15, p. 4. Back

Dr David Brennan, Transcript of Evidence, 15 November 2005, p. 41. Back

AGD, Submission No. 52.2, p. 2. Back