Wednesday, February 8, 2012

Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2) [2012] FCA 34

Proving yet again that copyright law in Australia is shaped by sport...

In July 2011, Optus began offering its subscribers access to the TV Now service, which (subject to payment of the relevant fee) allowed users to select to record TV programs being shown on free-to-air TV, provided  that the 'record' button was selected prior to the commencement of the relevant show. The AFL and NRL, together with Telstra, the exclusive licensee of broadcasts of the footage of AFL and NRL games via the internet and mobile phones (I am avoiding the terms devices here as this seems to be a point of contention in this instance) claimed that such recordings (and the necessary playback) were an infringement of copyright. The action was actually brought on the basis of  groundless threats of infringement under s 202 Copyright Act.

On 1 February 2012, Rares J in the Federal Court held that the TV Now service did not infringe copyright in the broadcasts of certain AFL and NRL games in 2011, Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2) [2012] FCA 34 .

The Optus subscriber using the TV Now service 'could select a program to record from an electronic program guide that would appear on any one of ...four kinds of device': a PC, Apple devices, Android devices or other 3G devices. Thus, once a program was selected to 'record' by a user, four individual copies would be made to support each of these platforms. Each individual user would also have a unique set of files made for their use ie multiple copies were made, each corresponding to an individual and unique request. These files were stored by Optus for 30 days, for playback by the user. who accessed the content via streaming. Users of Apple devices could view the content 'almost' live, ie subject to a two minute delay, due to differences in Apple file saving requirements. Each user has an allocated amount of recording time, depending on which 'plan' they had purchased. Users could only record TV shows shown in their 'home' region.

Optus relied upon s 111 Copyright Act, which (relevantly for our purposes) provides:

(1) This section applies if a person makes a cinematograph film or sound recording of a broadcast solely for private and domestic use by watching or listening to the material broadcast at a time more convenient than the time when the broadcast is made.

Note: Subsection 10(1) defines broadcast as a communication to the public delivered by a broadcasting service within the meaning of the Broadcasting Services Act 1992 .

(2) The making of the film or recording does not infringe copyright in the broadcast or in any work or other subject-matter included in the broadcast.
Note: Even though the making of the film or recording does not infringe that copyright, that copyright may be infringed if a copy of the film or recording is made.

The parties agreed that the Court should answer the following questions before proceeding to consider any further matters:
  1. Who did the acts involved in recording the broadcasts?
  2. Did s 111 mean there was no infringement of copyright? If there was infringment of copyright, was Optus liable for authorisation of copyright infringement?
  3. When the recording was viewed, who did the acts of electronically transmitting the copyright workks?
  4. Is streaming a communication 'to the public'?
  5. Was Optus responsible for 'making the works available' online?
  6. Was this 'to the public'?
Rares J concluded that the user of the TV Now service (rather than Optus)  'makes each of the films in the four formats when he or she clicks on the "record" button on the TV Now electronic program guide. This is because the user is solely responsible for the creation of those films.' [para. 63] Optus did not do any of the acts involved in recording the works, see para 68:  drawing the comparison with the photocopier in UNSW library in the Moorhouse case: 'it was impossible to say that the University did the act of photocopying by providing the photocopier, just as, in my opinion, it is impossible to say that Optus makes any of the films in the four formats that are created when a user clicks "record" and its datacentre carries out that instruction.' Perhaps this analogy is a little overstated given that the technology required to undertake the recording was entirely operated by Optus. All the user had to do was press a button, with no regard as to how this command would be achieved. In addition, in order to offer the service at all a considerable investment had to be made in receiving, recording and hosting equipment.

At para 80-81 Rares J emphasises that all that is achieved by the service is the outcome of time shifting as contemplated by s 111. See, in particular, para 81:

'If a person can watch a broadcast “near live”, away from a television, that may enable him or her to do something else. For example, the person may want to finish a task at work in the time it would take to travel home, because he or she knows that, once he or she finishes the task, he or she can view the broadcast “near live” when travelling home late or while still at work. Such a purpose is consistent with the definition of “private and domestic use”. Moreover, the rightholders accepted that pausing the contemporaneous recording of a broadcast to allow a user to do something else, even momentarily, can entail that the recording is made for use immediately after the viewer finishes the distracting event because that is a time more convenient than the time when the broadcast is made.'

These paragraphs seem to gloss over the point that what is really being talked about here is format rather than time shifting, and this is in essence, what is at the heart of the Optus business model, to get a slice of the internet and mobile devices market, which is exclusively licensed, for a large sum, to Telstra.

In response to the other questions, Rares J concluded that the user did the act of electronically transmitting the film, despite the use of Optus's equipment and services [para 95], and the communication was made to the user only and not 'to the public' [para 100] . Rares J also had to deal with the conclusion in Telstra Corporation Ltd v APRA (1997 HC) (the music on hold case) that if a work is communicated in circumstances where the copyright owner can expect a fee, the communication is made "to the public" regardless of whether it is made to only one person at a time'. [para 101] Rares J correctly recognises that: The TV Now service is part of Optus’ service that it offers to the market in order to attract and retain customers. As the business case for Optus’ decision to invest in the TV Now service recognised, the service would give it the significant market benefit of a leading position in the digital television industry and “delivers the customer value proposition ‘record and watch my favourite TV shows on the go’”. [para. 102] However, Rares J concludes that the communication of the recording to the user's device 'lacks the element of commercial detriment to the rightsholders' that had been present in the Telstra case. Thus, it could not constutite a communication to the public.

Finally, the digital file of the recording was not an 'article' or 'article or thing' withing the meaning of s 103 or s111(3)(d).

The Apple streaming technology was held to give rise to different issues to be considered separately.

Bram believes that there is plenty of scope to argue that whilst s 111 enables users to record material for viewing 'at a time more convenient than the time when the broadcast is made', time is not the only, nor perhaps even the main, matter to be considered here. Section 111 did not contemplate format shifting, that is dealt with in other sections of the Act.

The case has been appealed to the Full Federal Court.

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