Another Poke in the Eye for Authors and Publishers from New Zealand’s Libraries

Despite the welcome news that the National Library of New Zealand is reconsidering its badly flawed decision to donate 600,000 surplus books, including many still under copyright, to the controversial US-based Internet Archive for digitization, the National Library of New Zealand and the country’s librarians through the Library and Information Association of New Zealand (LIANZ)–of which the National Librarian is Past President—recently lobbed another grenade at authors. This time they are taking aim at the announcement by the New Zealand government that it intends to lengthen the country’s term of copyright protection. This measure would see New Zealand eventually–by 2036 no less (!)–get in step with most developed economies and extend its term of copyright protection for an additional twenty years beyond the Berne Convention minimum of “life (of the author)+ 50”.

(The controversial donation deal—now on pause while the National Library considers its next move—would have seen the Library effectively endorse the Internet Archive’s Controlled Digital Lending (CDL) program through the donation of 600,000 surplus books from the National Library’s collection despite CDL being the subject of a major copyright infringement lawsuit in the US brought by major international publishers.)

The opportunity for New Zealand to extend its term of copyright protection comes about as a result of the new UK-New Zealand Trade Agreement, reached in October 2021. One of the provisions of that agreement, insisted on by the UK no doubt, was that New Zealand bring its term of copyright protection into alignment with that of Britain. The “life of the author + 70” standard is the rule in the EU, UK, the US, Australia and will soon be enacted in Canada as a result of the USMCA/CUSMA. New Zealand may have regarded this as a concession but in fact when finally implemented it will benefit New Zealand authors and publishers not only in their domestic market and in the UK, but also in the EU which extends the benefit of the extra twenty years of protection only on a reciprocal basis. (The UK also applies its longer term reciprocally so New Zealand authors currently do not benefit from it). Of course, it will also benefit British authors and publishers in New Zealand, which is why the UK pushed the proposal but, given the 5 million population of New Zealand versus the 67 million of the United Kingdom, it is clear that New Zealand’s creators will derive the greater benefit.

So why are New Zealand’s librarians so critical, claiming that the term extension will result in the “locking up” of works for another twenty years. They say:

“…not only books, but films and music will be locked up for a further 20 years after the death of the authors, delaying the entry into the public domain of culturally significant New Zealand works and the creation of new works based on those works.”

This language implies that any work under copyright and not in the public domain is “locked up” and somehow out of reach of the public. Nothing could be further from the truth. Even though works under copyright require permission or licensing if they are to be reproduced, (unless the limited use of the work qualifies as a fair dealing), licensing provisions are in fact an incentive for the rights-holder to ensure that the work is given wide circulation. This is often done through derivative works, such as a movie based on a book. But according to the LIANZ,

Early New Zealand films, television and radio shows are starting to emerge from copyright. Locking them up for another 20 years will impact on cultural institutions without the resources to source permissions to use these materials.”

Are we to understand that New Zealand films, TV and radio shows that up to now have been under copyright protection under the original 50 year term have been “locked up” all this time? What cultural institution worth its salt doesn’t have the means to apply the minimal resources necessary to obtain permission (or to license) such content? This is another “the sky is falling” scenario often employed by those who profess to respect the copyright protection and incentives provided to authors, but then go out of their way to discredit them. New Zealand is not unique when it comes to this tactic.

In Canada too opponents of the alignment of the terms of protection between Canada the US resort to similar arguments, such as characterizing copyright as “locking up” content whereas in fact its purpose is just the opposite; to incentivize creators to create and disseminate their works. Another line of argument used is the “small market” hypothesis, whereby there will be an “enormous” outflow of funds to foreign authors and publishers.

The LIANZ statement managed to dredge up reference to a 2009 study (once but no longer available on the website of the New Zealand Ministry of Foreign Affairs and Trade-MFAT) undertaken by the Ministry of Economic Development (as it was then called). The study was commissioned from Concept Economics and undertaken by Australian academic Henry Ergas. The study was part of New Zealand’s preparation for negotiation of the Trans-Pacific Partnership (TPP) which at that time included the United States. It was correctly assumed that a US negotiating objective would be to bring the length of copyright protection in TPP partner countries into line with the term in the US (basically life + 70). One of the takeaways of that study released by the New Zealand government, one that is often cited by critics of copyright term extension, was that the cost of extending the term would amount to NZ$55 million annually to the New Zealand economy. Dr. George Barker, a well-known Australia-based economist, demonstrated that those figures were wildly off base because Ergas had greatly over-estimated the purported losses, and the New Zealand government had then compounded the distortion by amplifying the miscalculations. A couple of excerpts from Barker’s report will give you the flavour;

“The New Zealand government has commissioned and used a report from Concept Economics (“Ergas”) in order to gauge the economic impact of an extended copyright term. We have carefully examined that report as well as the Government’s use of that report. We have found numerous and extremely serious errors in the report that make it entirely unworthy for the basis of any policy recommendations. Its estimates of costs are wildly above any plausible values.”

The Government exacerbated Ergas’ misleadingly high costs by assuming, completely out of thin air, a cost of term extension for film and television that was not estimated by Ergas, and then compounded this unfounded claim by including in its cost estimate “range” a high value from the Ergas report that was contingent on a particular legal result that was known to have not occurred by the time the government came up with its range. Finally, when converting Ergas’ present value results into a yearly value, the government inappropriately used a discount rate inconsistent with that used by Ergas, a decision that increased the estimated costs from what they would have been had a consistent discount rate been used”,

There were also some basic calculation errors. In just one instance, the government had concluded that the losses in the music industry would be $17 million. Instead they should have been just $77,000, which were more than offset by gains that term extension would bring the New Zealand music industry, which Barker estimated could be worth up to $150 million annually.

Still, that $55 million net loss figure keeps resurfacing like a bad penny, and term extension opponents in Canada seized on it a few years ago to do “back of the envelope” calculations to conclude that extending the term of protection in Canada would amount to a cost of almost half a billion dollars annually to the Canadian economy! These claims were completely unfounded, and totally fanciful, as I wrote back in 2016. (“The TPP and Copyright Term Extension: What is the true cost to Canada?”).

Orphan works (works where no-one can identify the rights-holder) can be a problem, another argument trotted out by the librarians to oppose the measure. In implementing its USMCA commitment to extend the copyright term in Canada, the Canadian government is holding public consultations to examine several possible options to deal with the orphan works question;

Option 1 — Expand Canada’s current orphan works licensing regime / extend regime to out-of-commerce works

Option 2 — Collective licensing regime(s) to facilitate use of orphan works and/or out-of-commerce works

Option 3 — Permit the use of orphan works and/or out-of-commerce works, subject to claims for equitable remuneration

Option 4 — Exception for use of works during the final 20 years of protection

Option 5 — Exception for use of works 100 years after their creation”

The Canadian government’s position paper made it clear that copyright term extension would happen in Canada but there were some options in terms of dealing with the method of implementation so as to address issues like orphan and out of commerce works. Similarly, assuming the UK-New Zealand FTA is put into effect, New Zealand will also be joining the new international consensus on the preferred length of copyright protection, although this will not happen for some time given the excessively long period for implementation of this obligation—15 years! Maybe during that implementation delay New Zealand can figure out how to deal with the orphan works issue?

There are clearly costs and benefits for everything, including copyright. It is a shame that New Zealand’s library association seems to have focused exclusively on what they see as the costs, which are themselves exaggerated and inflated. They have completely ignored any benefits, which include an economically healthier and more productive creative sector in New Zealand, although given the very lengthy period of implementation—15 years—the benefits for New Zealand’s creators will take a while to flow. But better late than never, say I. However, if New Zealand is smart, it will accelerate the process and extend its term of protection sooner.

© Hugh Stephens, 2021. All Rights Reserved

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