Renting Items Protected by Copyright

Transcription

1 INFORMATION SHEET G055v10 November 2014 Renting Items Protected by Copyright This information sheet is for people who want to rent items containing copyright material such as DVDs, videos, CDs, software and computer games to other people. If you are lending rather than renting these items, see our information sheet Lending Items Protected by Copyright, available at Before reading this information sheet, we recommend you read the information sheet An Introduction to Copyright in Australia available on our website at We update our information sheets from time to time. Check our website at to make sure this is the most recent version. The purpose of this information sheet is to give general introductory information about copyright. If you need to know how the law applies in a particular situation, please get advice from a lawyer. Key points Copyright owners can take legal action if, without their permission, physical items containing the following are rented: recorded music (for example, on a CD); computer programs (for example, on a disc); any item that contains infringing material (for example, infringing DVDs); and any imported item where the importation required the copyright owner s authorisation but authorisation was not given (for example, unauthorised imported DVDs). Other items such as legitimately produced and imported books may be rented without permission from copyright owners. The rental restriction rules are unlikely to apply to rental of digital files. However, other copyright rules protect the unauthorised use of digital files. CDs and other items containing recorded music or sounds Owners of copyright in the content of an audio CD can take legal action against someone who rents out the CD if that person has not obtained the copyright owner s permission to do so. The situation is the same for other items containing recorded music, such as audio cassettes and vinyl records. In practice, copyright owners of audio content do not usually give permission for the rental of CDs or other physical items on which the content is recorded. The restrictions on rental also apply to items containing both recorded music and other material, even where the recorded music is incidental to the main content. Such items include computer games accompanied by recorded music, and DVDs of films with recorded music on the soundtrack.

2 Australian Copyright Council Information Sheet G055v10 Renting Items Protected by Copyright 2 The only exception is for rental businesses which began operation before 1996; they do not infringe copyright by renting non-infringing items containing recorded music or sounds, purchased before Items containing computer programs Owners of copyright in computer programs can take legal action against someone who rents out physical items containing the programs, such as discs, if that person has not obtained the copyright owner s permission to do so and the computer program is the essential object of the rental. The only exception is for rental businesses which began operation before They do not infringe copyright by renting non-infringing items, purchased before 1996, containing computer programs. There may, however, be other legal restrictions on rental in particular, provisions in a contract (such as the licensing terms and conditions) which have the effect of prohibiting rental. Computer games In most cases, you will need copyright permission to rent out computer games. Items containing computer games are covered by the rental restriction provisions if they contain recorded music or sounds, or if they contain infringing content. There are likely to be further copyright restrictions if the playing of the game requires the installation of a computer program, such as a start-up program. Installation of a program usually requires the permission (licence) of the owner of copyright in the program, and such a licence is commonly given only to the purchaser of a game. A person who rents out a computer game could be sued for encouraging the unlicensed installation of computer programs by customers. There may also be contractual restrictions on rental, for example under the licence terms and conditions. Infringing goods If you rent out items containing infringing copyright material, and you know (or ought to know) that the items contain infringing material, then it is likely that the copyright owner could take legal action against you. Items imported without permission In some cases, importation of items containing copyright material requires copyright permission, even though the items were made legitimately in the country of manufacture. In most cases, legitimately made CDs and computer games can be imported without permission, but DVDs require copyright permission. For further information, see our information sheet Importing Copyright Items. The rental restrictions apply to imported items, where copyright permission to import is needed but has not been obtained. Rental of copyright material online There are many businesses that rent copyright material online. The rules about renting copyright material apply in the same way to rentals of physical materials occurring through an online site

3 Australian Copyright Council Information Sheet G055v10 Renting Items Protected by Copyright 3 (through an Australian website or within the Australian market), as they do to rental of copyright articles through shop fronts. If you want to rent digital files, then it is arguable that in most cases, the standard rental rules do not apply. This is because a rental for the purposes of the Copyright Act is broadly considered to be an arrangement whereby an item is exchanged for a payment, on terms that the item will be returned. In the case of most digital rentals, there is usually no return of an item but rather, for example, a licence to use certain material for a given period of time, and often the digital file is simply deleted. There will, however, be additional copyright issues that you will need to consider. For example, many online rental models involve the reproduction and communication of digital files containing copyright material, and these are both rights reserved to the copyright owner. For example, if you wanted to send an MP3 to someone, this would generally involve both reproduction and communication of the file. In this case you would need to clear these rights with the relevant copyright owners (e.g. record labels, publishers or film studios) and so, you would likely to have to negotiate permissions anyway. Frequently Asked Questions (FAQs) Can we rent out books? You may rent out printed books, provided they are not infringing copies, or imported copies whose importation required permission and the permission was not obtained. The situation is different for talking books ; renting these requires specific copyright permission, because they are items containing recorded sounds and therefore covered by the rental restrictions. Can we rent out CDs and audio tapes? Rental of CDs and audio tapes is covered by the rental restrictions. In practice, copyright owners do not usually license rental of CDs. Can we rent out videos, films or DVDs? The rental restrictions apply to videos, films and DVDs which have recorded music, such as music previously released on CD, on the soundtrack. They also apply to pirate copies, and items imported without copyright permission. There may also be contractual restrictions for example, where the contract of purchase prohibits rental. In practice, rental of videos and DVDs is regulated by contracts between the suppliers and the rental outlets. The rental restrictions for computer programs do not apply to the computer programs on DVDs because the essential object of the rental of a DVD is the audiovisual content, not the computer program (see the Federal Court decision in Australian Video Retailers Association v Warner). Do the rental restrictions apply if we only charge to cover our costs? Yes. It is likely that the rental restrictions apply if you impose any charge other than a returnable deposit to ensure the safe return of an item subject to rental rights.

4 Australian Copyright Council Information Sheet G055v10 Renting Items Protected by Copyright 4 What are the consequences of renting items subject to rental restrictions? If you rent items which are subject to rental restrictions without obtaining permission from the copyright owner, the copyright owner can sue you. A court can order that you pay money to the copyright owner based on the loss suffered by the copyright owner, or an account of profits. A court can also order the payment of additional money if the infringement was flagrant. If the copies you are renting out are pirated copies, or unauthorised imports, you may also have to hand them over to the copyright owner or to the court, or destroy them. In addition, the unsuccessful party in court proceedings usually has to pay the legal fees of the successful party. The police can also charge you with a criminal offence, which can result in a fine or a jail term. How do you get copyright permission to rent out items containing copyright material? Copyright owners are not obliged to give permission for the rental of items containing their material, and in many cases they do not. Owners of copyright in CDs and computer software tend not to license the rental of items containing their material. Rental of videos, DVDs, computer and video games, on the other hand, is usually licensed by copyright owners. The first approach would usually be to the Australian distributor of the DVD or game. Can I rent out video games (for example, for wii, PlayStation and XBox)? The Copyright Act contains restrictions on renting out sound recordings and computer software. Therefore, you will need to get permission from the relevant rights holder of the video game before you can rent out copies. A good place to start will be the local distributor of the game. Can I rent out video game consoles? Game consoles contain computer programs, and permission is usually needed to rent out computer programs. However, the copyright owner s right to control rental of a computer program doesn t apply in either of the following situations: if the computer program is embodied in a machine or device (other than, for example, a CD ROM or disc) and the program can t be copied in the course of the ordinary use of the machine or device; or if the rental of the program is not the essential object of the rental. Console hardware is likely to satisfy at least one of these requirements and therefore unlike a computer game on a disc is likely to be able to be rented out without permission. Further information For further information about copyright, our publications or seminar program, see our website If you meet our eligibility guidelines, a Copyright Council lawyer may be able to give you free preliminary legal advice about a copyright issue that is not addressed in an information sheet. This service is primarily for professional creators and arts organisations but is also available to staff of educational institutions and libraries. For information about the service, see

5 Australian Copyright Council Information Sheet G055v10 Renting Items Protected by Copyright 5 Reproducing this information sheet Our information sheets are regularly updated - please check our website to ensure you are accessing the most current version. Should you wish to use this information sheet for any purpose other than your reference, please contact us for assistance. About Us The Australian Copyright Council is an independent, non-profit organisation. Founded in 1968, we represent the peak bodies for professional artists and content creators working in Australia s creative industries and Australia s major copyright collecting societies. We are advocates for the contribution of creators to Australia s culture and economy; the importance of copyright for the common good. We work to promote understanding of copyright law and its application, lobby for appropriate law reform and foster collaboration between content creators and consumers. We provide easily accessible and affordable practical, user-friendly information, legal advice, education and forums on Australian copyright law for content creators and consumers. The Australian Copyright Council has been assisted by the Australian Government through the Australia Council, its arts funding and advisory body. Australian Copyright Council 2014