The right of Australians to dodge content geoblocking should be enshrined in law, a sweeping draft review of Australia’s copyright regime by the Productivity Commission recommends.

The Commission today released the 550-page draft report on Australian copyright, which is highly critical of how much of the system presently operates. It is seeking public comment by June 3.

One of the Commission’s many targets is the geoblocking technology used by rights holders and streaming services to segment the internet.

“The use of geoblocking technology is widespread, and frequently results in Australian consumers being offered a lower level of digital service (such as a more limited music or TV streaming catalogue) at a higher price than in overseas markets,” the Commission said.

That “unsurprisingly” led many consumers to circumvent geoblocks using DNS or VPN technologies, the report said, adding that crackdowns on the technology and practice of geododging should not be allowed by law.

“As a minimum step, the Australian Government should prevent the future possibility that rights holders seek to use ambiguity in the Australian copyright system to prevent consumers’ circumvention of geoblocks,” the Commission recommended.

“The Australian Government should implement the recommendation made in the House of Representatives Committee report At What Cost? IT pricing and the Australia tax to amend the Copyright Act 1968 (Cth) to make clear that it is not an infringement for consumers to circumvent geoblocking technology.

“The Australian Government should seek to avoid any international agreements that would prevent or ban consumers from circumventing geoblocking technology”.

Netflix is one of the most high-profile recent cases of a service cracking down on users that circumvented its geoblocks.

The streaming service grew strongly through international subscribers seeking access to its US service. However, it recently tried to stop this from occurring in what was seen as a token gesture to rights holders, whom it relies on to license content.

The Commission said that it regarded “more accessible content” as one of the “keys to reducing online copyright infringement, rather than increasing enforcement efforts or penalties.”

Fair use

The Commission’s draft report also backs the earlier Australian Law Reform Commission’s (ALRC) recommendation to allow for the “fair use” of copyrighted material by others.

A fair use principle would allow for some verbatim re-use of copyrighted work without needing to seek permission or pay the rights holder.

The ALRC’s proposal met with stiff opposition from rights holders at the time, and it appears not much has changed.

“Not surprisingly, submissions to this inquiry from participants currently benefiting from copyright protection universally argued against the adoption of fair use in Australia,” the Commission noted.

“Many participants suggested that by design, fair use is imprecise on the permissible uses of copyright material, and its adoption would create significant legal uncertainty for both rights holders and users.

“Putting the decision about which uses are fair in the hands of the court system necessitates litigation to determine the scope of infringements.”

However, the Commission did not see this as a reason not to pursue the concept.

“In the Commission’s view, legal uncertainty is not a compelling reason to eschew a fair use exception in Australia, nor is legal certainty desirable in and of itself,” it said.

“Courts interpret the application of legislative principles to new cases all the time, updating case law when the circumstances warrant doing so.

“To reduce uncertainty, the Commission is recommending Australia’s fair use exception contain a non-exhaustive list of illustrative uses, which provides strong guidance to rights holders and users.

“Existing Australian and foreign case law, particularly from the United States where fair use has operated for some time, will provide further guidance on what constitutes fair use.”

Patents stifling innovation

Another area that the draft report covers in some detail is the need for reforming Australia’s patent system.

The report argues that “low-value patents” are impeding innovation and “frustrating the efforts of follow-on innovators and researchers.”

“In some cases, low-value patents can be used as a strategic tool for stalling or excluding market entry, and can contribute to ‘patent thickets’, which potential market entrants must ‘hack’ their way through in order to compete in a particular technology space,” the Commission said.

Though the Commission argues for a “rebalance [of] the patent system” it notes there is no single solution, and in any case Australia’s hands may be tied.

“Many aspects of Australia’s IP arrangements have come about, or been strengthened, in order to give effect to commitments in international agreements,” the Commission notes.

“These agreements contain prescriptive obligations relating to key policy levers such as the duration and scope of protection — some of which are at odds with the public interest — and significantly curtail the Australian Government’s capacity to change domestic policy arrangements.

“In fact, the restrictive provisions in international agreements mean that there are now fewer policy options available.”