The iCommons Australia Experience

Brian Fitzgerald (a), Ian Oi (b), Tom Cochrane (c), Cher Bartlett (d) and Vicki Tzimas (e)

Le travail d'adaptation des licences Creative Commons (CC) pour l'Australie a été mené par iCommons Australie, une équipe de rédaction formée de juristes australiens. D'un côté, il s'agissait d'être attentif au processus de transposition et de ne pas perdre de vue l'objectif général qui est d'apporter un régime de licence international cohérent et consistant à travers lequel les licences CC comportant les mêmes éléments auront en substance le même effet juridique, quelle que soit la localisation de l'offrant et de l'acceptant de la licence. D'un autre côté, l'adoption non éclairée de la version américaine des licences CC passerait à côté de différences subtiles entre le droit et la pratique des deux pays. Le processus de transposition a donc demandé de la part de l'équipe australienne d'équilibrer ces considérations, en identifiant les sujets pour lesquels l'application dans l'environnement local pouvait être amélioré, et de repérer s'il y avait des tensions inévitables dans la rédaction entre les aspects du droit et de la pratique juridique des deux pays.

A partir de ces analyses, plusieurs changements ont été suggérés par l'équipe australienne dans la rédaction de l'adaptation des licences. Ces changements concernent principalement les différences entre le droit d'auteur et la terminologie, le droit de la consommation et le droit moral dans la législation australienne. Certaines de ces questions, en particulier comment le droit moral des auteurs doit être considéré dans l'environnement des Commons, soulèvent des questions difficiles de principe et de philosophie qui n'aboutissent pas à des solutions faciles. D'autres sujets, telle que la confrontation avec la taxation sur la valeur ajoutée des biens et des services, sont principalement des questions de mise en oeuvre et d'application qui peuvent toutefois influencer matériellement la forme et la substance des CC. Certaines de ces questions sont examinées ci-dessous.

Work by iCommons Australia on porting the Creative Commons (CC) licence for Australia has been carried out by a drafting team of Australian lawyers. On the one hand, an important consideration of the porting process is to not lose sight of the overall objective of providing a coherent, consistent international licensing regime through which CC licences with the same licensing elements will have in substance the same legal effect, no matter where the licensor and licensee are located. On the other hand, an unknowing adoption of the US version of the CC licences would miss subtle differences in law and licensing practice between the two countries. The porting process has therefore required the Australian team to balance these considerations, by identifying matters in which implementation in the local environment could be improved, and considering whether there are any inevitable tensions in the drafting, between aspects of the US and local law and practice.

Arising from these analyses, a number of drafting changes have been suggested by the Australian team in drafting the ported CC licence. These changes primarily address differences in copyright and licensing law and terminology, consumer protection law and moral rights under Australian legislation. Some of these issues - in particular, how the moral rights of authors should be treated in a commons environment - raise difficult issues of philosophy and principle that do not yield easy solutions. Other issues - such as the extent to which GST taxation matters should be directly confronted in a CC licence - are primarily matters of implementation and enforcement that can, nonetheless, materially influence the shape and substance of the CC. Some of these issues will be examined below.

In Australia, goods and services tax (GST) is imposed on a wide range of transactions including in some circumstances the supply of goods, services or grant of rights. GST is only payable in relation to supplies:

made for consideration (whether monetary or non-monetary); and
made in the course or furtherance of an "enterprise" carried on by the supplier. The definition of "enterprise" excludes activities done as a private recreational pursuit or hobby; and
connected with Australia; and
made by a supplier who is registered or required to register for GST (generally this includes enterprises that have an annual turnover of AUD50,000 or more).

The CC licences may be used in a wide variety of circumstances, involving a broad spectrum of:

Different GST implications will arise depending on the circumstances of a particular transaction. The issue is also complicated by the practical difficulties in enforcing the CC licences, in that neither party signs the document or communicates on a one-to-one basis with the other regarding it. This gives rise to the following difficulties:

licensees might have difficulty in enforcing licence provisions (including provisions in relation to GST) against licensors, as there is no obligation on licensors to identify themselves with sufficient particularity in the licensed material; and
licensors might have difficulty in enforcing licence provisions (such as GST-related ones) against licensees, as there is no obligation on licensees to communicate their acceptance of the licence form.

The following comments can therefore only be made at a high level of generality with no particular application to specifically contemplated licensing transactions using the CC licence form. The comments would have to carefully elaborated if they were to be applied to any particular licensing transaction or scenario using the CC licence form.

For some licensing transactions involving use of a CC licence, the GST legislation will not, on its terms, impose an obligation on the licensor to pay GST. Examples may be where:

the supply is not connected with Australia; or

the recipient of the supply is not registered (and is not required to be registered) for GST and is not required to disclose an Australian Business Number ( ABN ); or

the supply is not made in the course or furtherance of an "enterprise" (eg, because it is an activity done as a private recreational pursuit or hobby); or

the supply constitutes an export that is treated as GST-free.

Special GST rules also apply for educational institutions and charities, so that some (but not all) of their activities might be treated as GST-free.

For other licensing transactions involving use of a CC licence, it is possible that the GST legislation will impose an obligation on the licensor to pay GST. Importantly, the following should be noted:

• The grant of copyright licence contemplated by the CC licence form would arguably constitute a "supply" within the meaning of the GST legislation.

• The restraints and positive obligations on the licensee contemplated by the CC licence form would arguably constitute "consideration" within the meaning of the GST legislation. In this regard, note that:

(a) the statutory definition of "consideration" is potentially broader than "consideration" within the common law meaning for the purposes of contract law, as it includes any act or forbearance in connection with the supply of anything, or in response to or for the inducement of a supply of anything. It is therefore possible that even if a licence in the CC form is held contractually unenforceable for (say) illusory/bad consideration at common law, those matters might nevertheless still fall within the literal bounds of the statutory definition of "consideration".

(b) it is not necessary that there be any legal obligation to provide the consideration.

(c) where the consideration is not expressed in money, the consideration is "the GST inclusive market value of that consideration". Although it can be hard to value such non-monetary consideration, the preponderance of authority favours the view that difficulties in determining the amount of consideration cannot of itself justify the conclusion that no consideration exists.

• The combination of the licensing transaction under a CC licence and other transactions between the licensor and licensee might also affect the analysis, such that additional supplies and/or consideration could be construed.

Where a transaction involving use of a CC licence is such as to attract the imposition of GST liability on the licensor, there may be circumstances allowing the licensor to argue that the GST payable in the transaction is zero because the GST inclusive market value of that consideration is zero. Equally, however, there may also be other circumstances in the transaction that make such arguments difficult.

It is also possible that a licensee, in undertaking to abide by certain conditions, may be treated as making a supply to the licensor in return for the licence.

After we concluded that there is a material risk that the CC licence form may be used in some circumstances in which GST liability will be imposed on the licensor, we decided that there were two broad approaches that could be taken as to the management of that risk:

Option 1 - the CC licence can be silent about this risk, so that the practical burden of the risk remains with the licensor.

Option 2 - the CC licence expressly provides that the licensor can recover from the licensee the amount of GST payable (by the licensor to the Australian Taxation Office). This Option tries to transfer the practical burden of the risk to the licensee. This Option is not uncommon in commercial licensing practice, and it is rare for licensees to object to its imposition in commercial transactions provided there is certainty regarding both the imposition of liability and the quantum of liability.

There are practical difficulties associated with both Options. In both cases, a licensor may not know (as a matter of course and without taking special measures) when the licence has been invoked and who invoked it. In one sense, adopting Option 1 (rather than Option 2) would be consistent with acknowledging this practical difficulty; that is, why should a licensor bother including contractual rights to recover GST amounts from the licensee when the licensor will not (as a matter of course) have that practical opportunity?

For present purposes, Option 1 has been adopted in the drafting: that is, the CC licence is silent about the risk of imposition of GST on the transaction, so that the practical burden of the risk remains with the licensor.

Regardless of which Option is taken, iCommons Australia intends to provide licensors and licencees with commentary noting this potential risk and strongly suggesting that they take their own professional tax advice before using the CC licence form. This is particularly important, if Option 1 is adopted, so as to minimise and mitigate the risks for CC (as an organisation) arising from third party use of the CC licence form. In addition, there appears to be nothing to stop variants of the CC licence form being developed, that:

(b) include particular mechanisms by which the licensor can identify/authenticate individual licensees, and perhaps even strengthen the legal enforceability of the licence (eg. by obtaining stronger manifestations of consideration and assent from individual licensees).

In addition, the Australian Taxation Office (ATO) could be requested to provide a binding private ruling on the matter. Such an application would need to be made on behalf of an identified licensor (or licensors) and in relation to a particular proposed transaction. It would only be binding on the ATO in relation to that particular transaction (or transactions). However, the ATO would not normally depart from its position in relation to other identical transactions. This would involve some effort and delay and it is possible (but not certain) that the ATO would agree that there are no taxable supplies involved in the licensing transactions (or that any taxable supplies are for consideration that is of no value). This would give practical comfort to users of the CC licence that they are complying with their GST obligations.

Finally, it is useful to note that the two other common law countries that are participating in the CC internationalisation project and which have comparable taxation schemes (the UK and Ireland) have remained silent on the issue in their latest draft licence versions. Neither licence mentions the Value Added Tax (VAT) operating in those countries.

The US version of the Attribution-NonCommercial-ShareAlike 2.0 licence reserves to the licensor, the exclusive right to collect royalties for any public performance (digital or otherwise) of the licensed work or for any cover version which is created from the licensed work, if the performance of the licensed work or subsequent distribution of the cover version is intended for commercial advantage or monetary compensation. The licensor may collect the royalties either individually or via a performance rights society, music rights agency, designated agent or a music publisher.

Under Australian law, the applicable performance rights society - the Australasian Performing Right Association (APRA) - cannot legally collect royalties for the exercise of the rights of communication to the public (including broadcasting) and public performance of musical works unless those rights are first assigned to APRA. APRA's standard arrangements therefore require APRA members (who number around 33,000 and include all Australian songwriters and composers whose works are used commercially) to assign all those rights to APRA. As a result, APRA members will not be in a position to use a CC licence to license others with these rights unless the APRA member has exercised their rights of opt-out (ie, by obtaining a re-assignment of these rights for particular Works or categories of Works), as permitted the APRA Articles of Association. iCommons Australia intends to provide licensors with commentary which will advise APRA members not to use a CC licence unless they have exercised their opt-out rights and, if they have any doubts as to their rights, to consult APRA or a copyright professional.

In Australian practice, a music publisher will individually collect, or the AMCOS-ARIA Industry Agreement is used for collection of, the mechanical rights royalties arising from reproduction of musical works in records. Under the AMCOS-ARIA Industry Agreement, a full (unpublished) member of the Australian Record Industry Association (ARIA) may enter into an exclusive agency agreement with the applicable collecting society - the Australasian Mechanical Copyright Owners Society (AMCOS) - which appoints AMCOS to collect, on an exclusive basis, the mechanical royalties owing to the member. Again, iCommons Australia intends to prepare commentary which will advise licensors who have entered into an exclusive agreement with AMCOS not to use a CC licence without first obtaining permission from AMCOS. Similarly, commentary will be prepared which will advise licensors of musical works who propose to use a CC licence that they should ensure that any arrangements they may have entered into with music publishers do not prevent them from using a CC licence to distribute their musical works.

The US version of the CC Attribution, Non-Commercial Share-Alike licence has limited provisions for moral rights. Clause 4.d provides, in effect, for a right of attribution of authorship. In the Australian version, this right has been simply translated into Australian legal terms.

Australian moral rights legislation (contained in Part IX of the Copyright Act 1968 (Cth)) gives authors the following additional rights:

(a) a right not to have authorship of a work falsely attributed (ss 195AC - 195AH) and

iCommons Australia considers that there are three options with regard to treatment of these rights in the licence: silence, assertion of these rights or disavowal of the rights. The US version takes the option of silence (except in relation to attribution). The Canadian version takes the option of a disavowal of moral rights (by way of a waiver of moral rights).

If the licence is silent on the issues of false attribution and integrity of authorship, then the last sentence in clause 3 is likely to operate to reserve those rights. It states:

"All rights not expressly granted by the Licensor are hereby reserved, including but not limited to the rights set forth in Sections 4(e) and 4(f). "

The default position, then, will be that the author is, in effect, reserving his or her moral rights. This is appears to be the current position for Australian licensors who already use the US version of the licence and for the original authors of works currently licensed under the US version. Arguably, such a position introduces unnecessary and easily avoidable ambiguity.

Moral rights can be asserted in the licences either by mirroring the language of the Australian Copyright Act, or by explicit reference to the legislation. In the first Australian draft, the provisional position selected was to assert the moral rights existing under Australian law by mirroring the language of the Australian Copyright Act. The specific changes, made in sub-clauses 4.g and h of the first draft, are reproduced below:

g. Except as otherwise agreed in writing by the Licensor, if You publish, communicate to the public, distribute, publicly exhibit or display, publicly perform, or publicly digitally perform the Work or any Derivative Works or Collective Works, You must not falsely attribute the Work to someone other than the Original Author.

h. Except as otherwise agreed in writing by the Licensor, if you publish, communicate to the public, distribute, publicly exhibit or display, publicly perform, or publicly digitally perform the Work or any Derivative Works or Collective Works, You must not do anything that results in a material distortion of, the mutilation of, or a material alteration to, the Work that is prejudicial to the Original Author's honour or reputation, and You must not do anything else in relation to the Work that is prejudicial to the Original Author's honour or reputation.

The first drafts of the UK and Canadian licence versions also chose to assert the moral rights existing under the laws of those countries. The pragmatic approach taken in the first draft of the Australian version was to maintain consistency with the philosophical position taken in the first drafts of the UK and Canadian licence versions but, consistent with the CC drafting style, to avoid statutory references that would be cryptic to laypeople or lawyers from outside the jurisdiction.

Reasons, additional to those identified above, for not disavowing moral rights include the following:

• It is arguable that where the licensor is not the Original Author, a default disavowal by a copyright owner of all moral rights of the author will carry more risk for both licensor and licensee than a default assertion of those rights. That is, if the licensor was wrong in disavowing those rights by default, the consequences are likely to be more drastic for both licensor and licensee than if the licensor wrongly asserts those rights by default (since it seems unlikely that an Original Author would seek legal redress for a mistaken enforcement of his or her lawful rights).

• Where the licensor chooses to take measures to assure a legally effective disavowal of moral rights, the present drafting allows the licensor the opportunity to defeat the default assertion of those rights. The argument here is that if a licensor goes to the trouble of obtaining moral rights consents that are valid for the purposes of the moral rights legislation, it should be little inconvenience for them to take the extra step of positively expressing that disavowal with the licence. Whereas, if the default drafting required due diligence to confirm that a moral rights consent had been obtained and then a positive assertion of those rights if they had not been obtained, this might lead to either unreliable consents (because licensors who are not the Original Author might not bother to perform such due diligence) or to non-dissemination of the works (because the transaction cost for the licensor is too high).

In August 2004, iCommons Canada decided to reverse its previous decision and expressly waive the right of integrity in the Canadian version of the licence. (2) The primary reason cited for doing so was to maintain interoperability with the US version of the licence, which does not mention the right of integrity. When announcing its decision to disavow the integrity right, iCommons Canada stated that it intended to encourage CC to add integrity as an extra licence element that a licensor may elect to choose. Version 2.4 of the Canadian licence, which includes the express disavowal of the integrity right, was launched on 30 September 2004.

As noted above, iCommons Australia's analysis is that the silence on the integrity right in the generic (US-based) licence version is likely to operate to reserve moral rights under the generic licence version, if that generic licence version is used and interpreted according to the laws of places like Australia. On this analysis, iCommons Canada's express waiver of the right of integrity appears to force a divergence between the legal effect of the generic licence version in Australia (arguably, implying a reservation of the integrity right) and the iCommons Canada version (express waiver) of the integrity right.

It is important to appreciate that an express waiver of the integrity right in CC licences has strong CC community appeal, in addressing user concerns that assertion of the integrity right could prove to be an unjustifiable fetter on the popular adoption of the CC concept. From that perspective, it cannot be denied that choosing to expressly waive the integrity right in porting the CC licences has a popular appeal across all jurisdictions.

There are, nonetheless, important practical issues that need to be addressed if one is to disavow the integrity right in the CC licences. The most significant is in relation to a licensor who is not the original author or creator, for example a licensor who has taken an assignment or an appropriate licence of copyright. Under Australian law, the moral rights of the author are personal to that author, so that the licensor in this situation has no right to waive the author's integrity right under the CC licence. Rather, all the licensor can do (as a matter of law) is seek a consent from the author to acts or omissions otherwise infringing the author's integrity rights, and ensure that the consent is in sufficiently broad terms to cover the acts or omissions of any CC licensee. This therefore means an increased practical risk that uninformed CC licensors who licence third party-sourced materials under a CC licence may overlook their responsibility to obtain the integrity right consent from all relevant third parties.

We do see the great value in the jurisdictions with express moral rights regimes maintaining a common position on the issue. Regardless of whether or not one accepts the cogency of the considerations leading iCommons Canada to adopt a position that disavows the integrity right, there are strong drivers for iCommons Australia to move from the initial drafting position - expressly affirming the integrity right - to a position that expressly disavows the integrity right (via a moral rights consent mechanism that accommodates the practical issues described above).

If a policy decision is made for the default position under the Australian CC licence to be a disavowal of moral rights protection afforded under Australian law, a provision to do so should be relatively easy to include. For instance, new clauses 4.g, 4.h and 4.i could read:

g. False attribution prohibited. Except as otherwise agreed in writing by the Licensor, if You publish, communicate to the public, distribute, publicly exhibit or display, publicly perform, or publicly digitally perform the Work or any Derivative Works or Collective Works in accordance with this Licence, You must not falsely attribute the Work to someone other than the Original Author.

h. Prejudice to honour or reputation permitted. Except as otherwise agreed in writing by the Licensor, if You publish, communicate to the public, distribute, publicly exhibit or display, publicly perform, or publicly digitally perform the Work or any Derivative Works or Collective Works in accordance with this Licence, You do not have to refrain from making a material distortion of, a mutilation of, or a material alteration to, the Work that is prejudicial to the Original Author's honour or reputation, or anything else in relation to the Work that is prejudicial to the Original Author's honour or reputation, and the Licensor either (if the Licensor is the Original Author) consents to this under Section 4.i or (if someone else is the Original Author) has obtained a valid written consent substantially in the terms of Section 4.i, given by or on behalf of the Original Author.

i. Moral rights law consent. Except as otherwise agreed in writing by the Licensor, if the Licensor is the Original Author, then to the extent permitted by applicable law, the Licensor unconditionally and irrevocably consents to all acts or omissions permitted by this Licence that would otherwise infringe any rights of the Licensor under moral rights law of integrity of authorship in respect of the Work. This consent applies whether the relevant acts or omissions occur before or after the consent is given, and is given for the benefit of You, Your licensees and successors in title, and anyone authorised by You or any of them to commit the relevant acts or omissions.

There are Australian observers who, whilst appreciating the middle ground of licensing that the CC project seeks to promote, have general concerns that the distinction made by the "commercial/non-commercial uses" condition of CC licensing is too vague to be properly used by individual creators, at least where they do not have the benefit of adequate guidance, advice or supervision. In this context, it is fair to observe that there has been a historical risk of individual creators (such as songwriters, composers and other artists) being unfairly exploited by other copyright stakeholders. It is this risk that supplied one of the originating justifications for the existence of copyright collecting societies, since they play an important role in ensuring that individuals creators are sufficiently educated regarding their economic rights in relation to works created by them and can, is they so wish, practically exercise those rights.

It has been argued that these historical risks continue in the new on-line environments, where new business models are being developed for delivery of copyright materials. Thus, some people in Australia have expressed concerns that CC licensors in the new on-line environment risk unintentionally and inadvertently granting away rights to non-creative users (such as music-on-hold providers, ringtone operators, narrowcasters and even pub owners) who might attempt to illegitimately use the rights granted by CC licences for their own commercial purposes, at the expense of the licensing creators.

It should be noted that the critiques described above address only one of the several conditions comprised in the CC licensing scheme. Moreover, the concerns underlying such critiques can be, to some extent, addressed by drafting clarifications in licence wording and by raising the sophistication of licensing creators, through guidelines and education as to the practical intent, content and effect of the CC licences.

A broader answer to such critiques, though, is that the CC licences will be of primary relevance to those creators and creative works for which considerations of the creative class and free culture are predominant. For many such creators, the concerns underlying the critiques described above may well be risks that they are willing to accept, in return for the opportunities and benefits arising from participating in an open content commons. This is not to say that CC licensing of open content is necessarily inconsistent with, or fundamentally undermines, existing mechanisms for the commercial exploitation of creative material. Nor is it to deny that CC seeks to expand the categories and numbers of creative classes for whom its initiatives are relevant. Rather, it is to acknowledge that there are some creative works for which CC licensing will be more appropriate than others, depending on substance of the work, the objectives of the creator and the wider context and significance of the work's use and access.

CC licensing is a species of "open content licensing". A similar and parallel open content licensing project in Australia is the "Free for Education" of "FfE" licence developed by the AEShareNet organisation, which enables material licensed under the FfE licence to be freely used for educational purposes. AESharenet was established in 2000 and is a collaborative system owned by the Australian Education Ministers. Its primary aim is to steamline the licensing of learning materials so that they may be developed, shared and adapted more efficiently. (3)

There is much scope in Australia for the use of open-content licensing by government. In Australia, the government owns all copyright in most materials made by, or under the direction and control of, the federal or a state government. In 2003, the Australian attorney-general gave a reference to the Copyright Law Review Committee (CLRC) to examine the law relating to government ownership of copyright material. The CLRC released an issues paper on the terms of its reference in February 2004 and called for members of the public to make submissions. (4) In July 2004, the CLRC released a discussion paper in order to promote discussion and invite further comments on what it felt were key issues raised in the submissions. (5) The CLRC is required to report back to the attorney-general by 4 December 2004.

While many of the submissions focused on the issue of whether government ownership of copyright material should or should not be retained, few considered the role that open content licensing could have in the management of government owned or Crown copyright. Ten years ago the question would have simply been whether the Crown should or should not have copyright. Many advocating for no Crown copyright would have been seeking open access to information. Today however we know more about the intricacies of open content licensing. It is arguable that a broader and more robust information commons can be developed by leveraging off copyright rather than merely "giving away" material. To this end, we hope that the final report of the CLRC will engage with and evaluate the significance of open content licensing models (such as CC) in facilitating open access to Crown copyright.

This is an exciting time in the development of intellectual property and copyright practice and iCommons Australia is looking forward to participating in the further international development of the iCommons project. To that end, QUT is hosting a conference on CC and open content licensing in January 2005 to launch the Australian version of the CC licence and to help spread the word through the creative industries about this new way to promote creative innovation.

c. Deputy Vice-Chancellor, Technology, Information and Learning Support, Queensland University of

d. Research Assistant, Law School, Queensland University of Technology, Brisbane..

1. The views in this article are personal to the authors and should not be attributed to their employer organisations. References in this article to views of iCommons Australia are references to the views of the project co-leaders of iCommons Australia.

In March 2004, the Queensland University of Technology (QUT) exchanged a Memorandum of Understanding with iCommons as the Australian affiliate. The project co-leaders are three of the co-authors, Tom Cochrane, Deputy Vice-Chancellor (Technology, Information and Learning Support, QUT), Ian Oi from Blake Dawson Waldron and Professor Brian Fitzgerald, Head of the QUT Law School.

2. In so doing, iCommons Canada chose to continue to affirm the right against false attribution.