17 May 2012 Footy Wars Continue: Optus' win reversed by Full Federal Court


Footy Wars Continue: Optus' win reversed by Full Federal Court

In our previous article, "Optus Wins Most Recent Footy Wars", we looked at the Federal Court's decision permitting Optus to offer its users "near-live" broadcasts of sporting events, without having to pay licence fees to the rights holders, under the "time-shifting" exception under the Copyright Act.

On 27 April 2012, the Full Federal Court of Australia overturned this decision, finding that the time-shifting exception under the Copyright Act did not extend to content providers such as Optus.

Here, we take a look at the key questions on appeal and implications for content providers.

Key issues on appeal

There were two primary issues on appeal:

  1. When the copy was made of the AFL or NRL matches, who (for the purposes of the Copyright Act) was the maker of the recording?  Was it Optus, the subscriber, or both jointly?
  2. If in copying the matches Optus infringed the Copyright Act, then was Optus able to claim the time-shifting defence available under s 111?

Who made the copy of the matches?

Optus argued that it was not the maker of the copy because of the nature of the technology. The service was similar to a photocopier or VCR/DVR, which was automated and using programmes which the subscriber identified to be copied and initiated the copying.

The Court rejected this, saying it did not necessarily follow that the subscriber alone made the copy by clicking a button that initiated the copying and just because the service was automated, did not protect Optus from infringing the Act.  Rather, Optus was the "main performer" of the act of copying".

The Court found that Optus was not merely making available its TV Now Service to another who uses it to copy a broadcast.  Rather, Optus captured, copied, stored and made available for reward, programmes for later viewing by another.

The Court went on to say that Optus' relationship with its subscribers was not one of agency.  And even if Optus was an agent, it would still be making a copy in breach of the Copyright Act and be jointly and severally liable with the subscriber for making the copies.

It was arguable as to whether the subscribers were also liable under the Act in this case and whether they may claim the defence under s 111, however, as no subscriber was joined to the action, this issue did not need to be decided.

Could Optus claim a defence under s 111?

Section 111 of the Copyright Act provides a defence to copyright infringement where the copy is solely for private and domestic use.  The Full Federal Court ultimately found that there was nothing in the language of s 111 to suggest that the provision was intended to cover commercial copying on behalf of individuals, notwithstanding suggestions of bringing the provision into line with technology neutral rights.

Technological neutral legislation is a hot topic this month with the release of the Convergence Review Report and this case is no exception.  Whilst the Court noted that s 111 did not necessarily exclude later technological developments in copying, it found that no principle of technological neutrality could overcome what they saw was the clear and limited legislative purpose of s 111 – that the defence was relevant only to private and domestic use and not for commercial purposes.

The market impact that the time shifting provisions had when introduced into the Copyright Act was negligible at the time given the then current practices of users copying a programme for their own use.  The same could not be said in this case and with current technologies.

Going forward

It will be interesting to see whether the legislature accepts the Court's invitation to comment on or amend the provision in light of this issue.

In the meantime, Optus has sought leave to appeal this decision to the High Court and has suspended its TV Now Service.

The Full Federal Court recognised that its decision turned on the particular facts and circumstances of this case, and the particular technology of the Optus TV Now Service, and acknowledged that different relationships and technologies may yield different conclusions as to the "who makes the copy" issue that it addressed.

So the law cannot be considered as settled in this area.  The case does give some guidance to the industry on what is and is not likely to be deemed to be copyright infringement in Australia, but ultimately this will doubtless be something for the legislature to consider going forward.

For further information, please contact us.

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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