Rights-owners scored a win in the Full Federal Court on Friday, with the Court finding Optus' TV Now recording service infringed the AFL's and NRL's copyright in their sports broadcasts. As a result, providing similar services will be very difficult to do lawfully, although in theory not impossible. (National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd [2012] FCAFC 59).

How does TV Now work?

Optus' TV Now service allows subscribers to nominate free to air TV programs to be recorded. These recordings are stored on Optus' cloud storage platform; customers can stream the recorded programs to their devices for viewing on any one of four compatible devices: PCs, Apple devices, Android devices and 3G devices.

The Australian Football League and National Rugby League partnership own the copyright in broadcasts made on free to air television of games played between teams in their respective competitions. They granted Telstra an exclusive licence to communicate, by means of the internet and mobile telephony, free to air broadcasts of live and pre-recorded AFL and NRL games.

The legal question: did Optus infringe copyright?

Telstra and the sports organisations argued that Optus infringed their copyright by making unauthorised recordings of their sports broadcasts and then made unauthorised communications of those recordings to Optus customers.

Optus contended that it was their users (not Optus) that made the recordings. As the customers made the recordings for their own private or domestic use, the playback fell within the time-shifting exception in section 111 of Copyright Act 1968 (Cth) and did not infringe copyright.

The primary judge agreed with Optus; the Full Federal Court didn't.

Why the Full Federal Court said Optus infringed copyright

The first issue was this: who made the recording?

The Full Federal Court said that it clearly wasn't just the subscriber. Whether it was Optus alone, or in conjunction with the subscriber ultimately didn't matter, because either way Optus still had responsibility for the making of the recording. It set up the system, sold the service, used the system to record the program, stored the recording, and streamed it on demand.

Could Optus then claim the protection of section 111 on the basis that the recording was for a subscriber's private or domestic use? The subscriber might be able to, but Optus can't. That's because the section doesn't say anything about commercial copying on behalf of individuals.

Where to now for TV Now and similar services?

This is not the death-knell for similar services, but it is a serious blow. The Full Federal Court emphasised that this decision only applied to the particular technological arrangements used by Optus, and other arrangements might not lead to the same result. What arrangements those might be will no doubt tax the minds of the backroom boffins.

While it's a significant victory, we're still only half-way through the season – Optus may well seek special leave to appeal to the High Court. There is also the possibility of reform to the Copyright Act. If, as Optus argued, the original intent of section 111 was to protect anyone who made a time-shifting recording for private or domestic uses, then that intent is not reflected in the section now.

The Federal Government's review of the Copyright Act will hopefully examine not only the TV Now decision, but other recent high-profile and important copyright cases such as iiNet on authorisation of copyright infringement, Fairfax v Reed on copyright on headlines, and the Telstra and Ice-TV cases on copyright in compilations.