Optus wins most recent footy wars

AFL, NRL and Tel­stra unable to stop unli­censed ​“near-live” view­ing of matches

On 1 Feb­ru­ary 2012, the Fed­er­al Court of Aus­tralia con­firmed that Optus is able to offer to users ​“near-live” broad­casts of sport­ing events, with­out hav­ing to pay licence fees to the rights hold­ers, rely­ing on the ​“time-shift­ing” excep­tion in the Aus­tralian Copy­right Act.

The Aus­tralian Foot­ball League (AFL) and Nation­al Rug­by League (NRL) own the copy­right of broad­casts made on free to air TV of their respec­tive com­pe­ti­tion games. Tel­stra holds an exclu­sive licence from the AFL and NRL to utilise these free to air broad­casts of live and pre-record­ed AFL and NRL games on the inter­net and mobile phones ser­vices. The AFL, NRL and Tel­stra claim that Optus breached their copy­right by broad­cast­ing a num­ber of AFL and NRL games in Sep­tem­ber and Octo­ber last year by offer­ing a ser­vice that gives a user the abil­i­ty to record free to air tele­vi­sion pro­grams, includ­ing AFL and NRL games, and play them back on any one of four com­pat­i­ble devices, being, PCs, Apple devices, Android devices and 3G devices. Once the record but­ton is pressed the pro­gram is record­ed by the sys­tem for each indi­vid­ual user in four dif­fer­ent for­mats to accom­mo­date for PCs, Apple, Android and 3G devices. Optus’ sys­tem makes four copies of each broad­cast for each indi­vid­ual user of the ser­vice who wished to record that cer­tain pro­gram, with these copies being stored in Optus’ data cen­tre. When a user clicks play on their com­pat­i­ble device, Optus’ data cen­tre streams (does not down­load) the copy of the pro­gram in the appro­pri­ate for­mat to the user’s device.

Sec­tion 111 of the Aus­tralian Copy­right Act allows a per­son to make a copy/​recording of a broad­cast ​“sole­ly for his/​her pri­vate and domes­tic use by watching…the mate­r­i­al broad­cast at a time more con­ve­nient than the time when the broad­cast was made”. Optus relied on this pro­vi­sion to argue that:

1. the record­ing was made by the user;
2. the record­ing is a legit­i­mate ​“time-shift” of the broadcast.

These argu­ments were accepted.

The Court held that a ser­vice provider is not liable for copy­right infringe­ment sim­ply because it offers a ser­vice that makes record­ings auto­mat­i­cal­ly upon a user’s command.

The Court also accept­ed that the defence in sec­tion 111 applied. The Court accept­ed that ” ordi­nar­i­ly, a user would watch a broad­cast of an AFL or NRL game for his or her own indi­vid­ual plea­sure and the same would apply to a record­ing of such a broad­cast” and that the copy was made to watch at a more con­ve­nient time, even if the user watched these time-shift­ed record­ings ​“near live” with­in min­utes of the start of the broadcast. 

The Court also accept­ed that the defence applied even though more than one copy was ​“time-shift­ed”. On its face, sec­tion 111 is not lim­it­ed to a sin­gle copy that is made for view­ing at a lat­er time, and is to be con­trast­ed with the ​“for­mat shift­ing” pro­vi­sions” for films in sec­tion 110AA. The for­mat shift­ing excep­tion does not apply to the mak­ing of more than 1 copy (exclud­ing a tem­po­rary copy that is made inci­den­tal­ly as a nec­es­sary part of the tech­ni­cal process of mak­ing the main copy) at the same time. The copy­right own­ers argued (unsuc­cess­ful­ly) that the mak­ing of more than 1 copy for time-shift­ing pur­pos­es took the copy­ing out­side the pro­tec­tion of the time-shift­ing defence because it had not been proved, and in any event was unlike­ly, that each user had all four kinds of com­pat­i­ble device. Fur­ther, there was no need for more films to be made than the one nec­es­sary for the user to sat­is­fy a desire to time-shift the broad­cast for the con­ve­nience of his or her view­ing. They argued that this gave the user sig­nif­i­cant free­dom of choice as to the for­mat for view­ing. In addi­tion, they argued that sec­tion 111(1) used the indef­i­nite arti­cle ​“a” in the expres­sion ​“makes a cin­e­mato­graph film or sound record­ing” to denote that only one film or record­ing was autho­rised by the statute. Each of these argu­ments was reject­ed by the Court.

The user is indif­fer­ent to the process that cre­ates a film that only he or she can gain access to, so long as the ser­vice deliv­ers a streamed film to what­ev­er com­pat­i­ble device he or she choos­es to use to watch the record­ed film at the time of the user’s choice. Pro­vid­ed that the user sat­is­fies the require­ments in s 111(1), each of the films in the four for­mats that he or she caus­es some tech­nol­o­gy or equip­ment to make, will not infringe copy­right by force of s 111(2) unless one of the cir­cum­stances in s 111(3) has occurred.

The deci­sion has caused sig­nif­i­cant con­cern amongst rights hold­ers and the gov­ern­ment has announced that it is urgent­ly con­sid­er­ing its impli­ca­tions, and may amend the provisions.

It is also expect­ed that the deci­sion will be appealed. Tel­stra has also indi­cat­ed that it may adopt­ed a sim­i­lar strat­e­gy in respect of sports con­tent licensed exclu­sive­ly to Optus.

What­ev­er hap­pens in the short-term, giv­en the play­ers involved, and the val­ue of sports broad­cast­ing arrange­ments for many sports, and the com­mer­cial inter­est of both Tel­stra and Optus, it is a bat­tle that will be expect­ed to con­tin­ue for some time.

For fur­ther infor­ma­tion, please con­tact us.

Authored by M Hall.