Fair use will give the digital economy a fair go

This article argues that the Australian government should amend the Copyright Act 1968 (Cth) in order to introduce United States-style fair use provisions as an additional open-ended exception to copyright sitting below, and integrated with, the current fair dealing exceptions. It identifies some of the ways in which current copyright law is holding back innovation and economic growth, which emerge from the submissions of some of the key stakeholders to the Australian Law Reform Commission's recent Inquiry into Copyright and the Digital Economy. It then reviews the experience in the US and how the fair use provisions have spurred innovation in the American economy. The arguments for and against introducing fair use into Australian copyright law are canvassed, and different options for implementing this reform are analysed, including that proposed by the ALRC. The optimal option for reaping the benefits of the digital economy, involving a two-step test, is identified and recommended.