A recent decision of the Federal Court of Australia may have interesting repercussions for copyright holders and their exclusive licensees.(1)
In July 2011 Optus commenced its 'TV Now' service. The service gives Optus customers the ability to record free-to-air television broadcasts on Optus' infrastructure and play them back on their computer or mobile device. Essentially, the service provides a cloud-based television recorder.
Optus asserted that users of the TV Now service, rather than Optus, made the recordings, and that the service therefore fell within the exception for private and domestic recording in Section 111 of the Copyright Act 1966 (Cth) (ie, the 'time-shifting' provisions). However, the Australian Football League (AFL) and National Rugby League (NRL) claimed that through this service, Optus had infringed their copyright by making copies of the broadcasts and communicating the copies to the public.
The first issue considered by the court was whether it was Optus or users of the TV Now service that made recordings of the relevant broadcasts. After noting that this question raised the old chicken-or-egg conundrum, Justice Rares decided that individual users recorded the broadcasts because they had sole responsibility for which programmes the TV Now service recorded. Significantly, the judge stated that as the service was not substantially different from that provided by a video cassette recorder or digital video recorder, there was no real distinction between a person recording television using the TV Now service compared with a person using recording equipment in their own home.
Rares went on to consider whether the time-shifting provisions under Section 111 of the act applied. Those provide that recording a broadcast solely for private and domestic use in order to watch it at a more convenient time does not amount to copyright infringement. The court considered that there was nothing to suggest that users of the TV Now service did not use the service solely for their private purpose of watching the broadcasts at a more convenient time.
Finally, the court held that although Optus streamed the recorded broadcasts to users via its network infrastructure, it was the users who were responsible for that communication, as they were responsible for determining the content of the communication. Further, the court held that the communication by users to themselves of the broadcast they had recorded did not constitute communication to the public.
This decision has general repercussions for copyright holders in television broadcasts and their licensees and, in these particular circumstances, Telstra's five-year A$153 million exclusive internet and mobile device broadcasting licence with the AFL. However, the long-term significance of this case is questionable. As expected, the AFL and NRL have already appealed the decision. Moreover, within days of the decision, the sporting bodies had approached the federal government to lobby for changes to the copyright legislation to close what they saw as a 'loophole'.
Copyright law inherently involves a delicate balancing of the rights of rights holders and consumers. Whether Parliament shares the views of rights holders that the balance must be restored is yet to be seen. However, until the appeals are exhausted or the government amends the legislation, parties negotiating for exclusive internet rights should be wary.