Copyright review - MBIE's approach to policy development

25 November 2019

​​Copyright law in New Zealand appears to be in for a major overhaul, as the Ministry of Business Innovation and Employment (MBIE) continues its review of the Copyright Act 1994.

As part of its review, MBIE has issued a new paper clarifying the framework it intends to use for developing its copyright policy advice. In preparing this paper, MBIE took into account the submissions it received earlier this year regarding the proposed objectives that had been included in its “Issues Paper".

The revised objectives set out below will be used to evaluate how well New Zealand copyright law is currently performing, and identify problems with the status quo. MBIE will determine how these different objectives should be weighted once further public consultation has occurred.

Revised objectives

MBIE has refined its objectives for use in the review of copyright law by separating policy considerations from regulatory aims, and best practice criteria for assessing legislation. The more general regulatory aims, including creating a law that is effective, efficient, and responsive to Te Tiriti o Waitangi/the Treaty of Waitangi​ considerations, will remain important, but at this stage of the review the proposed objectives have been amended to focus on policy goals that are unique to copyright.

The objectives recommended by MBIE propose that copyright policy should seek to achieve the following:

  1. Promote the supply of copyright works that serve the cultural, economic and social interests of New Zealand by:
    1. providing incentives for the creation and dissemination of works, where copyright is the most effective mechanism to do so, and
    2. permitting reasonable access to works for use, modification, self-expression, adaptation and consumption, where exceptions to exclusive rights are likely to have a net benefit for New Zealand.
  2. support creators to obtain fair recognition for their creative effort, exercise a reasonable degree of control over the integrity of their work, and obtain a fair proportion of any revenue attributable to their creative effort.

These objectives can be respectively described as the “supply objective" and the “fairness objective".

The supply objective

The first objective is said to facilitate the exercise of several human rights in international law that New Zealand has commitments to or has affirmed in domestic legislation. These include:

  • the right to participate in cultural life, enjoy the arts and share in the benefits of scientific progress (as expressed in Article 15 of the International Covenant of on Economic, Social and Cultural Rights),
  • the right to freedom of expression as affirmed in the New Zealand Bill of Rights Act 1990, and
  • the right to education as required by Article 26 of the Universal Declaration of Human Rights.

The reference to “incentives" in the wording of the supply objective is deliberately broad, and it is intended to refer to anything in copyright policy that makes people more likely to create or disseminate works. In terms of financial incentives, MBIE has commissioned independent research to determine how copyright policies influence how effective economic rights are in enabling revenue to be recovered by those who invest money, time and effort into copyright works. In terms of non-financial incentives, MBIE recognises the importance of creators having a degree of control over their relationship with their work, including recognition as its author, who is able to enjoy it and what others are able to do with it. In addition the paper notes that copyright can increase the opportunities creators have to engage in the creative process.

MBIE notes that copyright is not always the best mechanism to incentivise the creation and dissemination of works, and is in fact “a very basic and egalitarian tool". In some circumstances, other mechanisms such as direct investment by the Crown, or amended exceptions to infringement (particularly where this is likely to have a net benefit for New Zealand) may be more effective in providing incentives to create and disseminate works.

The fairness objective

The second objective is in part a recognition that a purely incentive-based approach to thinking about the role of copyright for creators would be incomplete. There is an interest for example, in protecting the moral interests of an author or director to object to someone else being named as the author of their work, which stands apart from discussion about whether authors would produce fewer works without this protection. MBIE has indicated that concepts such as moral rights are a matter of fairness or “the mark of a just and civilised society".

MBIE resolves that it would not be just or in the spirit of international human rights law to view copyright as concerned with the material interests of creators only so far as to induce creativity that would not otherwise occur. A contrary view is taken however for people who disseminate works rather than create them (such as publishers, distributors and licensing bodies). MBIE has indicated that there is no public policy reason why organisations taking on a dissemination role would require copyright to benefit them beyond providing them with the incentives necessary to perform these functions.

This fairness objective is also intended to help creators benefit materially from their contributions to a work's commercial success, beyond that which would be required to incentivise further creativity by that person. Finding an appropriate way to address this objective may pose a difficult challenge for MBIE, given there is often an imbalance of power between creators and those that help them commercialise their work. It is suggested that perhaps the human right to authorship may require copyright policies aimed at protecting authors from unfair bargains. Such a change would have the potential to dramatically change the way copyright is dealt with in commercial arrangements.

Constraints arising from New Zealand's position in the global marketplace

The paper notes that there are particular difficulties that exist when considering New Zealand's position in the global marketplace, and this will need to be taken into account when considering what changes to the status quo should occur, and how the above objectives should be weighted.

There are, for example, significant constraints as to what can be achieved through domestic copyright policy given New Zealand's obligations under international copyright treaties and fair trade agreements with other countries. An example of this is that due to our international obligations, New Zealand's copyright law cannot give works produced locally any market advantage compared to works of foreign origin. The result of this neutrality is that most of the benefits of copyright protection will accrue to foreign copyright owners, since New Zealand is a significant net importer/user of copyright works. Policy decisions that are beneficial to copyright owners will therefore have the necessary consequence of disproportionately benefitting foreign copyright owners at a cost to New Zealand users.

Another issue noted in the paper is that the small size of our market exposes New Zealand to some risk of foreign companies choosing not to enter or compete in New Zealand if regulatory conditions here are viewed as unfavourable. The paper suggests that this will be especially the case for technology companies who may choose not to service the New Zealand market if changes to the law significantly increase compliance costs, or requires them to change their practices or business models.

The issue of how to enact reform in order to provide a net benefit for New Zealanders is a major one, and will need to be noted as the review continues.

Next steps

MBIE is presently at the “problem identification" stage of the review, in which it is evaluating the status quo to identify problems with how New Zealand's copyright law works at present. There will be opportunities for stakeholders to comment further on objectives and how MBIE should apply these when further consultation occurs next year.

We encourage clients to think about these issues now, and to consider how copyright law affects you and your business. Further public consultation will occur when MBIE issues its Options Paper next year, at which time any business affected has the opportunity to make submissions expressing their views on the proposed reforms.

If you would like to discuss any of the matters raised in this article, please contact Tania Goatley, Alan Ringwood, Kristin Wilson​, or your usual Bell Gully advisor. ​

Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.