Free the Australian Aboriginal Flag: What Are the Limits of Implied Covenants of Fair Dealing in Copyright Licensing?

A “Free the Flag” campaign is raging in Australia, the latest chapter in a long-simmering controversy over the copyright rights to the Aboriginal flag. The controversy raises issues of fair dealing in copyright licensing.

The flag was designed in 1971 by indigenous artist and copyright holder Harold Thomas for a national Indigenous Day. In 1995 the flag was proclaimed as an official flag of Australia, apparently against the wishes of Thomas.

In 1997 the Federal Court of Australia affirmed Thomas’s copyright ownership  (for a fascinating discussion of why and how he created the flag, see the court’s opinion.) In 2003 he successfully enforced the copyright against a Western Australia businessman, and in 2010 he asserted his rights against Google’s attempt to use the flag in a “Google doodle” page.

In 2018 Mr. Thomas granted an exclusive global license to reproduce the flag on clothing, physical media and digital media to WAM Clothing, a non-indigenous owned company. WAM’s owner, Ben Wooster, is a former art dealer whose gallery was fined $2.3M in 2018 by a federal court for selling fake Aboriginal artworks made in Indonesia. WAM has earned significant royalties from licensing arrangements, including to professional sports teams, including the Australian Football League (AFL). However, this year the AFL took the position that the WAM licensing terms effectively prohibited smaller groups from using the flag and refused to continue paying royalties. Other sports teams followed its lead. WAM has issued cease and desist letters to nonprofit Aboriginal organizations, including Spark Health Australia, an Aboriginal social enterprise, which uses the tagline Clothing the Gap. In response, Spark Health began a “Free the Flag” campaign to lobby the government to make the flag available for commercial and non-commercial use. The AFL football clubs have launched a petition supporting the movement, which has garnered 150,000 signatures. WAM Clothing has now said it will challenge only commercial, not personal, uses of the flag.

As a result of the new movement, the Australian Senate established the Select Committee on the Aboriginal Flag to look into current and former copyright and licensing arrangements for the Aboriginal flag and explore possible options. Some of the options under discussion are:

  • The government buys out the copyright in the flag. But, there are concerns about the appropriateness of the federal government owning indigenous IP and those who would view this as yet another exploitation of Indigenous culture.
  • Community approach to copyright ownership. A model could be the copyright of the Torres Islander Flag, owned by the Torres Island Regional Council and its 15 communities.
  • Statutory licensing. Thomas would remain the copyright owner, but users could use the flag upon payment of a compulsory license fee. (For a discussion of the recently enacted U.S. compulsory licensing mechanism to compensate digital music providers, see our earlier blog, and for information about Lutzker & Lutzker’s role as lead counsel for prominent religious ministries in a series of copyright cable compulsory royalty cases, see our earlier news item.
  • Legislative defense. The Australian Parliament could create a specific copyright fair dealing defense which would allow free and fair uses of the flag.
  • Assertion of federal power. The Australian government could assert its power to manage intellectual property related to national icons.

While the controversy will be negotiated rather than litigated, there is an underlying issue as to whether a duty of fair dealing between a copyright licensor and licensee can be implied where it is a third party who is injured by the licensee’s inequitable conduct. The argument might be that such unfair treatment of a third party breaches the licensee’s duty of fair dealing to the licensor by diminishing the licensor’s reputation. See  Black Horse Lane Assocs., L.P. v. Dow Chem. Corp., 228 F.3d 275, 288, 3d Cir. 2000) internal citations omitted (“The implied covenant of good faith and fair dealing requires that ‘neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.’")

The issue is sensitive, controversial and many-sided. There is a non-Indigenous company with a history of selling fake Aboriginal art that is profiting from an exclusive licensing agreement at the expense of Aboriginal nonprofit organizations. But, on the other hand, there is an Indigenous artist, himself a member of the “Stolen Generation,” who created the flag, established his legal rights and then lawfully licensed them in exchange for royalties. Complicating the issue are those who resent the 1995 declaration of the flag as an official Australian flag, object to the idea of federal government ownership of the copyright and believe its use should be controlled by an Aboriginal-run body. But there are also some who view the flag as a contemporary work and not a part of authentic Aboriginal culture.

On September 18 The Arts Law Centre of Australia, a not-for-profit community legal organization which has been protecting the rights of artists since 1983, submitted a position statement to the Select Committee. Citing the continuing need for a legislative prohibition against the misappropriation of the works of Indigenous artists, the Arts Law Centre takes the following position on this issue:

…it is extremely important to acknowledge and respect Mr. Harold Thomas’s intellectual property rights. Any solution must balance the need to recognise and protect these rights with the importance of an Aboriginal Flag that can be freely used by the Australian community.

We have previously written about the failure of traditional copyright and trademark law to protect indigenous culture and the need for special legal protection.

Quite a complicated web for the Australian government to work through – we will follow and report on future developments.