Proposal for a Unified Regime of Copyright Exclusive Rights

(IPRinfo 5/208)

Andrew F. Christie
Davies Collison Cave Professor of Intellectual Property, Melbourne Law School; and Research Associate, Intellectual Property Research Institute of Australia, University of Melbourne

The author proposes abolishing the various categories of exclusive economic rights and replacing them with one right of ”use”.

One of the consequences for copyright law of the constant development of technology is that the catalogue of exclusive rights provided to the copyright owner has expanded significantly over time. The current Australian Copyright Act, for example, provides nine exclusive rights, whereas the Australian Copyright Act of 1905 provided only three.

The increase in the number of exclusive rights is due, overwhelmingly, to technological advances. The advent of digital technology has only exacerbated this outcome.

This paper proposes a solution to these problems: abolish the various categories of exclusive economic rights and replace them with one right, inclusively defined, of ”use”. An inclusive definition of the exclusive right is technology-neutral, would fill current gaps in protection and permit copyright law to evolve flexibly over time to accommodate future technological developments. The ”one right” model would also solve the problem of overlap of rights.

The overlap of various exclusive rights is a problem
Two observations may be made on the expansion of the categories of the exclusive rights of the copyright owner. First, it is clear that the law is constantly in ”catch up” mode with technological development. That is to say, although the law changes to accommodate technological developments, the accommodation is only ever temporary. The law is always lagging behind slightly.

Secondly, the on-going introduction of new exclusive rights gives rise to an overlap of rights. That is to say, one activity will often constitute an exercise of multiple rights. For instance, under Australian copyright law when a telecommunication service provider supplies a mobile phone ring tone for download to its customers, it exercises up to six separate rights (adaptation, reproduction, communication, authorisation, rental, performance).

Even though the exercise of these rights is inseparable, the supplier of the ring tone must obtain licences to each of these rights – which may mean, in some cases, six separate licences.

While both observed outcomes are problematic, the second of them – the overlap of exclusive rights – is the most significant. Where a single activity constitutes an exercise of multiple rights simultaneously, it may be inappropriate to require the user to pay multiple licence fees for what is, essentially, one ”damage” to the copyright owner.

Such compensation of the copyright owner may exceed that required to give effect to copyright’s economic rationale of preventing market failure (through providing economic incentives for authors and preventing free-riding). A possible consequence of overlap is a ”copyright thicket”, with a resultant increase in transaction costs (inherent in the need to apply for multiple licences) and the potential for licence-stacking.

One right system less radical than other IP regimes
A solution to these problems could be to abolish the various categories of exclusive economic rights and replace them with one right, inclusively defined, of ”use”. An inclusive definition of the exclusive right is technology-neutral.

It would fill any gaps in protection that might exist currently, as well as permit copyright law to evolve flexibly over time to accommodate future technological developments. And, self-evidently, the ”one right” model would also solve the problem of overlap of rights.

It might be argued that the proposal is radical. In fact, the proposal is far from radical, when compared with other IP regimes. Australian patent law, for instance, has a single right of ”exploitation”, defined inclusively. Similarly, Australian trademark law has a single right of ”use”. So, providing only a single economic right under copyright law would make copyright consistent with the other two major IP regimes.

It might be argued that the proposal would not allow for differential treatment (i.e. different levels of protection) of different types of copyright subject matter. Currently, most copyright laws provide a higher level of protection (i.e. more exclusive rights) to traditional copyright ”works” than to neighbouring-rights subject matter such as sound recordings.

The proposed model accommodates differential treatment through definitional exceptions. So, ”use” could be defined in one way in relation to ”works” and in another way in relation to other protected material.

It might be argued that the proposal diminishes the economic incentive for creators by preventing them from licensing multiple rights to various different users. This is not the case. The scope of protection under the proposed model is the same, if not higher, than under the current law.

An inclusive definition that is technology-neutral permits copyright owners to argue that new activities (as they emerge through technological developments) amount to a ”use” of the copyright subject matter. Thus, the model increases the range of licensable acts over time. Accordingly, the economic incentive for creation of copyright material should be the same or higher than under the current multiple rights model.

The proposed model would benefit creators and users
Finally, it might be argued that the proposal imposes an inappropriate burden on copyright users by widening the range of licensable acts. However, the experience to date has been that copyright owners are almost always successful in persuading the legislature to respond to technological developments, so in practice the model’s widening of licensable acts is unlikely to be greater than would inevitably occur in any event.

Also, under the one right model, the copyright user is relieved of the burdens that potentially come with overlap of rights – namely, higher royalties and increased transaction costs. So, the one right model should provide benefits to copyright users as well as copyright creators.

This proposal is an extension of the author’s ideas presented in previous papers on copyright simplification and in the context of an Australian government inquiry into simplification of copyright law.

It is, at this stage, a preliminary proposal only. However, if the earlier model of simplification to two exclusive economic rights is accepted, then it seems a short step to accepting the one right model.

The author has elsewhere proposed the simplification of copyright law: Andrew Christie, ”Simplifying Australian Copyright Law – the Why and the How”, (2001) 11 Australian Intellectual Property Journal 40-62; Andrew Christie, ”A Proposal for Simplifying United Kingdom Copyright Law” [2001] European Intellectual Property Review 26-43. See also Australian Government reports: Copyright Law Review Committee, Simplification of the Copyright Act 1968, Part 2, Categorisation of Subject Matter and Exclusive Rights, and Other Issues (February 1999)

The author was a member of the CLRC that conducted the simplification reference from January 1995 to August 1998.