By: Ken Sawdon

Last month the Australian Government’s Productivity Commission released a draft report considering, “whether current arrangements provide an appropriate balance between access to ideas and products, and encouraging innovation, investment and the production of creative works.” While this sounds standard, the resulting report is a surprising, progressive, and well argued document. While the Australian Government does have Crown Copyright ownership of its works, the Commission has released the draft report as CC-BY (which is becoming more popular for government organizations worldwide). It can be found here.

It is important to note that the Productivity Commission is an independent body: it does research and provides advice, but no one is required to act on their recommendations. While I think that the report is an interesting read, and filled with good policy recommendations, I would be absolutely (and happily) be shocked if the draft became policy.

Some of the main points from the report include:

• Australia’s patent system grants protection too easily, allowing a proliferation of low-quality patents, frustrating the efforts of follow-on innovators, stymieing competition and raising costs to the community. To raise the quality of patents, the Australian Government should:
  • increase the degree of invention required to receive a patent, abolish the innovation patent, redesign extensions of term for pharmaceutical patents, limit business method and software patents, and use patent fees more effectively.
• Australia’s copyright system has progressively expanded and protects works longer than necessary to encourage creative endeavor, with consumers bearing the cost.
  • A new system of user rights, including the introduction of a broad, principles-based fair use exception, is needed to help address this imbalance.
  • Better use of digital data and more accessible content are the key to reducing online copyright infringement, rather than increasing enforcement efforts or penalties.
• While Australia’s enforcement system works relatively well for large rights holders, reforms can improve outcomes for small-and medium-sized enterprises.
• Commercial transactions involving IP rights should be subject to competition law. The current exemption under the Competition and Consumer Act is based on outdated views and should be repealed.
• Multilateral and bilateral trade agreements are the primary determinant of Australia’s IP arrangements. These agreements substantially constrain domestic IP policy flexibility.
  • An overly generous system of IP rights is particularly costly for Australia — a significant net importer of IP, with a growing trade deficit in IP-intensive goods and services.
  • The Australian Government should focus its international IP engagement on encouraging more balanced policy arrangements for patents and copyright, and reducing transaction and administrative costs for parties seeking IP rights in multiple jurisdictions.
  • Improving the evidence base and analysis that informs international engagement (especially trade agreements with IP provisions) would help the Australian Government avoid entering agreements that run counter to Australia’s interest.

This is not a radical policy suggestion, except for one issue I’ll talk about next. The Australian people are being hurt by many of the same issues as Americans; including, patent trolls, monopolies, and an overly complicated copyright system that favors larger copyright holders and still doesn’t quite know how to handle new technologies. Additionally, Australia is one of the many nations around the world that is a net importer of IPs, meaning both their consumers and producers are hurt by strict IP laws.

There is one radical suggestion in the draft. Draft Finding 4.2 says, “While hard to pinpoint an optimal copyright term, a more reasonable estimate would be closer to 15 to 25 years after creation; considerably less than the 70 years after death” (pg 29). This would spit in the face of the Berne Convention, WIPO, “Hollywood,” the RIAA , MPAA, publishers, and so many more. And, to editorialize, it would be glorious.

Section 4.4, “The duration of protection,” is well worth the read as it goes into the details of how an excessive copyright term can be harmful, and gives evidence showing that the current life plus 70 is more harmful than helpful. First the authors point out that, “providing financial incentives so far into the future has little influence on today’s decisions to produce,” and that the gains from moving from life plus 50 to life plus 70 have been minor (pg 113). With maybe an exception or two, creators do not release one work and then live off of the gains for the rest of their careers–they must (and usually want to) regularly create new works. This is in part due to the diminishing returns of a work. The draft provides the earning life of various works:

• the average commercial life of music is between 2 and 5 years. Around 70 per cent of musical originals provide a return in the first 2 years, with the remaining 30 per cent providing a return fairly evenly over the next 3 years

• literary works provide returns for between 1.4 and 5 years on average. Three quarters of original titles are retired after a year and by 2 years, 90 per cent of originals are out of print

• most original visual artistic works have finished yielding an income within 2 years, but the distribution is highly skewed and a small proportion of works receive income over a longer period. These works represent the majority of income received

• the average commercial life of film is between 3.3 and 6 years. This estimate is bench-marked against similar international markets including the United Kingdom, Europe and the US. Very few films make money in their sixth year (ABS 2015b). (pg 114)

The earning potential of works goes through the long-tail curve. Initial sales are almost everything a work makes, and after around half a decade sales will be almost negligible. This is due to various factors such as: interested customers have already purchased the work, works become hard or impossible to find, or replacement/alternative works are created. The authors also point out that works that are in the public domain have many avenues to reach consumers, which increases availability. “Given the expiration of copyright protection means competitors can supply an existing work to market, it is unsurprising some types of works also become more commercially available when they enter the public domain” (114). Greater dissemination of a work means more interaction by the public, increasing attention to and fame of the creator. Besides that, a work in the public domain reduces the cost that the public has to pay to consume the work–in the case of Australia it is estimated that the move from life plus 50 to life plus 70 costs $88 million per year (pg 114). Those are just the quantifiable costs; additional costs may come into play with orphaned works and tracking down rights holders. The section continues by referencing and discussing two studies on the ‘optimal’ duration of copyright, the first recommending 25 years and the second 15. But, the authors admit that, “Australia has no unilateral capacity to alter copyright terms,” and that all they can do is, “negotiate internationally to lower the copyright term,” to more favourable conditions (pg 117).

Of course, the draft is focused on the current situation in Australia. If the awful Trans-Pacific Partnership Agreement is ratified in the United States and enough other countries then the copyright landscape will be completely different. It may be much harder for countries to negotiate a more optimal copyright term, and all of this will be for naught.

Still, I highly recommend taking a glace at the draft report if you’re a policy nerd like me. Again, it’s highly unlikely to become policy in Australia, but I find it exciting to hear recommendations in this draft policy suggested by a government organization. It’s 600 pages, but is easy to understand and quick to read. They also put more effort into design elements than most policy documents, including easy-to-read infographics for politicians and the public. I wasn’t able to read the whole report before writing this post, but I look forward to completing it in time–it was written for Australia, but has recommendations applicable to many nations.

 

---

Ken Sawdon is a Footage Curation and Metadata Specialist at Dissolve Ltd., a startup stock footage and photo company. He is a recent MLIS graduate from the University of Alberta, where his activities included co-chair of the Forum for Information Professionals student conference and community activist and blogger for the Future Librarians for Intellectual Freedom. He has been a volunteer librarian for the Aero Space Museum of Calgary as well as a Collections Assistant at Fort Calgary. He loves wading through policy and legislation, especially intellectual property issues and professional association rhetoric. You can find and connect with him at @kainous on Twitter.