These are just some of the glaring issues with the Copyright Act that have been raised today by the Australian Law Reform Commission (ALRC) and copyright experts. The ALRC has released a new issues paper for its inquiry into whether Australia's copyright laws have kept up with the digital age.

Copyright law experts say in some areas the law is too strict and stifles innovation while preventing the public from enjoying creative works. Recent court battles have sparked debate on some of these issues including Larrikin Records' victory over Men at Work and the Optus stoush with the AFL and NRL.

Google's search engine uses automated web crawlers to find and copy sites on the internet. The copies are indexed and stored in its cache so users can more quickly access search results.

However, the ALRC's paper said that because there are no exceptions in the Copyright Act allowing caching, indexing and other internet-related technical functions, Google's search engine “may infringe copyright”. Further when it displays results to users this could be considered “communicating copyright material to the public”, another breach of the Act.

“If Google had been started in Australia, it could well have been sued out of existence,” said Dr Rebecca Giblin, copyright law expert at Monash University.

“This hostile regulatory regime is one of the reasons why so many Australian start-ups head straight for Silicon Valley.”

Dr Giblin, who is researching the issue, called on people whose businesses or ideas have been “negatively impacted by the rigidity of our copyright law” to contact her.

In light of the high profile court decision that part of the flute riff in Men at Work's song Down Under was copied from the children's song Kookaburra, the issues paper also asks whether sampling, remixes and mash-ups of copyright materials should be permitted by the Copyright Act.

Currently there are only “fair dealing” exceptions if the copyright material is used for the purposes or criticism/review or parody/satire. This generally does not include sampling and mash-ups.

“Australian rock anthems from the 1980s are one thing; but modern musical practices embrace digital sampling, remixes, and mash-ups,” said Dr Matthew Rimmer, associate professor at the Australian National University College of Law.

“A recent interesting example is Gotye's Somebodies: A YouTube Orchestra - which incorporates a wide range of covers, parodies, and remixes of his original work.”

Cloud-computing services have also been affected by copyright law.

Optus recently fought the NRL and AFL over its TV Now service that allowed customers to watch video streams of matches on their smartphones or computers as close as two minutes behind the live TV broadcast.

The Optus service undermined the footy codes' existing online rights deals with Telstra, and in April the full bench of the Federal Court found that Optus breached copyright laws.

Dr Rimmer said the Optus case “raised larger questions about copyright law, personal use, and cloud computing”.

Dr Giblin said cloud computing services in general were on shaky ground as far as Australian law was concerned “because their technical operation might involve reproducing or communicating copyrighted material uploaded to them by their customers”.

The issues paper asks whether Australian copyright law is impeding the development or delivery of cloud computing services. It poses the question of whether copying of copyright material including broadcast material for private and domestic use should be more freely permitted.

Dr Giblin said the fact that Australian copyright law has no “orphan works exception” means we lose huge chunks of our culture every year because it would be an infringement to copy it without permission and there is no one to ask permission from.

“This prioritises the rights of those who have effectively abandoned their works over the rights of the public to experience the work,” she said.

The ALRC is seeking public submissions about its issues paper, after which it will draft a consultation paper proposing various reforms and seeking further comment. The final report is expected to be handed to government by November next year.

Michael Speck, former head of Music Industry Piracy Investigations (MIPI) and now a consultant and spokesman for rightsholders, critcised the ALRC for providing "yet another forum for the anti-copyright industry to trot the same cliches" and said there was no evidence to sugest a search engine in Australia would be sued under the Copyright Act simply for being a search engine.

"I'm greatly concerned that the ALRC has set about giving academics with no skin in the game the opportunity to hypothesise about legislation that already works for consumers and creators," said Mr Speck.

Separately, the Attorney-General's Department has been hosting talks between the internet industry and rights holders to work out a fair way to combat online piracy. The Australian reported today that a sixth round of talks has been scheduled for the end of the month after almost a year of fruitless negotiations.