National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd [2012] FCAFC 59

The Federal Court of Australia has this morning handed down an eagerly awaited judgment concerning Optus’ cloud-based recording service, TV Now. The Full Federal Court has unanimously overturned Justice Rares’ decision, and found in favour of the National Rugby League (NRL), the Australian Football League (AFL) and Telstra. The Court held that Optus’ TV Now service infringed the copyright in the live broadcasts of NRL and AFL games, by finding that Optus was jointly responsible for making the recordings, and that the section 111 “time-shifting” exception to copyright infringement did not apply.

Sporting leagues have welcomed this morning’s decision by the Full Federal Court, following concerns that Justice Rares’ earlier decision might have impacted upon the value of online and mobile phone broadcast rights for major sporting events.

Optus TV Now won at first instance

In February this year, Justice Rares of the Federal Court found that Optus TV Now did not infringe the copyright in the live NRL and AFL broadcasts. In coming to this conclusion, His Honour considered the TV Now service to be “substantively no different from a VCR or DVR”1, and found that the subscriber to the service, and not Optus, was responsible for making the recording of the broadcast. Accordingly, the permitted exception to copyright infringement contained in section 111 of the Copyright Act 1968 applied to the subscriber’s conduct. Section 111 of the Copyright Act permits a person to make a recording of a broadcast if it is for their private and domestic use, for the purpose of watching it at a more convenient time (this is known as the “time-shifting” exception).

On appeal: Optus TV was found to have infringed copyright

Optus and the subscriber made the recordings

The fundamental issue of the case was who was responsible for making the recording of the broadcast: Optus, the subscriber or both.

The Full Federal Court (consisting of Justices Finn, Emmett and Bennett) rejected Justice Rares’ finding that the subscriber made the recording, and preferred the view that both Optus and the subscriber, acting in concert, were the makers of the recording.2   The subscriber was found to have instigated the copying by pressing the “record” button, but Optus gave effect to it.

The Court considered Optus to be “manifestly involved” in the copying process as it designed and maintained the system to make the recordings. In its judgment, the Court noted that “Optus [was] not merely making available its system to another who uses it to copy a broadcast. Rather it captures, copies, stores and makes available for reward, a programme for later viewing by another”.3

The section 111 “time shifting” exception did not apply to Optus

Section 111 of the Copyright Act applies to private and domestic use, and encompasses recording broadcasts, and watching recorded broadcasts inside and outside of a person’s home. However, the Court found that “there is nothing in the language ... of s 111 to suggest that it was intended to cover commercial copying on behalf of individuals”.4   The Court held that Optus made the recordings for a commercial purpose to make a profit and as such it could not rely on section 111.

What’s next for Optus?

In light of this decision, Optus has suspended the provision of its TV Now service. It now has 21 days to decide whether it will apply for special leave to appeal to the High Court.

The effectiveness of the Copyright Act in the current online environment (including the effectiveness of the “time-shifting” exception) is also currently under review by the Australian Law Reform Commission (ALRC). Submissions and comments on the draft terms of reference closed today, 27 April 2012.