Optus loses important copyright appeal about Optus TV Now service
27 April 2012
The Full Federal Court today ruled against Optus in an important copyright appeal. Optus’s TV Now service was found to breach the copyright in various AFL and NRL broadcasts and not to be time-shifted personal recording by the individual users.
This decision overturns the original decision, where it was held that the TV Now service was a personal recording by individual users to watch their recorded copy at a more convenient time. This meant it fell within the statutory ‘time shifting’ exception in section 111 of the Copyright Act 1968 (Cth) in the same way as using a personal video recorder or Foxtel iQ box to watch shows later.
McCullough Robertson’s Technology, Media and Telecommunications Partner, Paul McLachlan, discusses the implications.
Paul McLachlan explains that the Optus TV Now service permits its mobile subscribers to access an electronic program guide and then make recordings of free to air television broadcasts. Those recordings can then be accessed via the individual’s various devices, including iPhones, Android smartphones and tablets at the user’s convenience (including, watching almost live with as little as a 2 minute delay).
NRL, AFL and Telstra (collectively, the Rights Holders) are the owners or licensors of the copyright in the free to air broadcasts of NRL and AFL games. Telstra had paid significant sums to be the exclusive mobile content licensee and that content an important part of its BigPond value proposition. NRL and AFL games were some of the free to air broadcasts that could be recorded using the TV Now service.
The Rights Holders previously brought proceedings against Optus alleging that the TV Now service involved unauthorised copying and broadcast of copyright works by Optus, in breach of the Rights Holders’ copyright. Optus contended that it was in fact the users who made the recordings, which were for private and domestic use, and which therefore fell within the ‘time shifting’ exception in section 111 of the Copyright Act.
At first instance, the Federal Court agreed with Optus that, while the service involved copies being stored on Optus’ servers, it was the user who made the recordings by pressing the ‘record’ button. The Court characterised the service as simply the ‘cloud’ version of the personal video recorder.
Mr McLachlan said, 'While that was a controversial finding and certainly upset Telstra and the football codes who had paid and received a lot of money for the right to show football games on mobile phones, it was in line with other recent decisions in the United States and Singapore involving similar technologies.'
The Rights Holders appealed the finding at first instance.
In today’s decision, Justices Finn, Emmett and Bennett overturned the first instance decision. Their Honours found that it was not the end user but Optus, or a combination of both Optus and the end user, who made the relevant recording.
This factual finding was very important. Having determined that Optus was either solely or jointly responsible for the copying, the question was whether Optus could be considered to fall within the personal use time-shifting exception in section 111 of the Copyright Act. Their Honours held that it could not, because the exception applies only to ‘a person’ making a copy ‘solely for private and domestic use’. Their Honours held that the exception did not extend to a person making a copy for another person to use for private and domestic use.
Mr McLachlan notes that the decision is very important in the development of copyright law in the context of cloud computing and increasing platform convergence.
Mr McLachlan said '[m]any commentators had seen the first instance decision as being a pragmatic recognition of the spirit of the time shifting exception. The appeal decision though demonstrates that the Courts will still take a more strict interpretation of the limits of the time shifting exception.'
He went on to explain that this case demonstrates the inherent tension between rights holders, who need to make a commercial return on their significant investments in quality content, and users and access providers, whose interest is in being able to access quality content in the form and at the time most convenient to them. 'The time shifting exception was brought in to align the Copyright Act with the reality of how people were using technology for personal recording. This case shows that technology has already moved further and the limits of that exception are already being tested.'
It is still to be seen whether this litigation has devalued digital rights. Despite the win over this particular technology, rights holders will still be nervous that technological change could circumvent even the most tightly worded licensing arrangements.
The question now is whether there will be a Round 3 in the High Court. Optus is said to be considering all its options.