Jurisdiction - Australia
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TV Now’ Shifts Goalposts on Copyright Holders’ Rights.

25 February, 2012

 

Legal News & Analysis – Asia Pacific – Australia – Intellectual Property 

 

The Federal Court has held that Optus's 'TV Now', which allows users to record and play back free-to-air television programs on various devices, does not infringe the rights of those who own copyright in the television programs. 
 
Background
 
The Federal Court has held that Optus's Internet and mobile phone service, 'TV Now', which allows users to record and play back free-to-air television programs on a variety of devices, does not infringe the rights of those who own the copyright in the television programs. This is because the use of the service comes within the 'time-shift exception' in section 111 of the Copyright Act 1968 (Cth), which permits an individual to make a copy or recording of a broadcast if it is for their private and domestic use at a time more convenient than when the broadcast is made.
 
The facts
 
The Australian Football League (the AFL) and National Rugby League Partnership (the NRL) own the copyright in free-to-air broadcasts of AFL and NRL games. Telstra has been granted an exclusive licence by each of these parties to broadcast this footage via its Internet and mobile phone technologies.
 
In July 2011, Optus developed a new service for some of its customers called 'TV Now.' The service allows users to record free-to-air television programs and to watch them at a later time on certain devices (PCs, Apple devices, Android devices and 3G devices). The recorded copies of the programs are stored by Optus at its data centre, and then streamed to the user's device at their request. The service allows unlimited playback by users during a 30-day period running from the day the program was recorded. Playback includes pause, advance, rewind and delete functionality. Users on PC, 3G and Android devices cannot access the service (even for recording) until completion of the broadcast. Apple iOS devices, however, are able to access the service for viewing approximately two minutes after commencement of the broadcast. This gives Apple devices 'near live' functionality.
 
In September 2011, several AFL and NRL games broadcast on free-to-air television were recorded and watched at a later time by users of the TV Now service.
 
Issues the court considered
 
By agreement, the court was asked to deal, at a preliminary stage, with certain core issues on the basis of certain agreed facts. The key issues questioned whether the TV Now service infringed copyright owned by the right holders.
 
The first key issue was to identify who made the copy of the broadcast (in fact, four copies: one for each of the available formats). Federal Court Justice Rares found that this was the user. The user clicks the 'record' button without which no copy would be made. The fact this was achieved by sophisticated technology in the Optus cloud was no impediment. His Honour regarded this as no more than keeping step with technology, whether it was via a VHS recorder or an iPhone app.
 
The next key question was whether, having clicked the 'record' button and made a copy of the broadcast, the user benefited from the time-shift defence. Recognising that the purpose of the defence was to accommodate, to some degree, the law to the realities of modern life, the court found that the user did. This was because the purpose of making the recording was for private and domestic use at a more convenient time, even in the case of 'near live' replay.
 
The third key issue was whether it was the user or Optus that was responsible for streaming the replay on the chosen format. The user chose the content by clicking the 'record' button. The user then, when convenient, clicked the 'play' button. In these circumstances, the court found that the user was responsible for determining the content to be streamed to the user's device, not Optus. It was, in substance, no different than inserting a VHS cassette, pressing 'record' and later pressing 'play'. Where the user elects the content and triggers both its recording and its replay, the responsibility falls on the user.
 
The next issue was whether there was a communication 'to the public'. Given the finding that the user (not Optus) made the communication (being the streaming of the recorded program), it was necessarily a communication to that user. This, however, was not determinative of the issue. The rightholders argued that the communication of the copy of the broadcast was, nevertheless, made to the public. It was in a commercial setting as part of a subscription service and users, being members of the public, availed themselves of that service. This argument did not persuade the court. Justice Rares concluded that no communication to the public can occur where, as here, the user made the recording, triggered its communication only to himself or herself at a time of his or her choice, and solely for private and domestic use by watching or listening to it at a more convenient time than the initial broadcast.
 
The final issue related to the meaning of an 'article' and whether it was distributed in the course of trade. The court found that the digital files (of the recording) were not relevant 'articles'. It also found, in any event, that neither the making of the digital files nor the communication of them constituted an infringement of copyright. Since infringement was a pre-requisite to the success of this argument, it failed.
 
Implications
 
The decision represents a generous interpretation of the time-shifting defence. In a clear effort to align current technological practices with copyright law, Justice Rares was willing to make the leap from the living room to the cloud. He was also willing to make the leap from post-broadcast time-shifting to 'near live' viewing, finding that two minutes after broadcast was a long enough delay to meet the 'more convenient' threshold. He was willing to err on the generous side in inferring the purpose for which users recorded and played copies of broadcasts. He did so because he considered that the time-shift defence was designed to ensure greater flexibility to individuals so as to take advantage of technological advances. He also acknowledged that the user may be with others (family or friends) when playing the recording.
 
One issue that remains to be decided relates to the 'near live' technology. Unlike with PC, Apple 3G and Android devices, where no recording occurs without a user's instructions, a temporary (no more than a rolling 60 seconds) recording is automatically made by the Apple QuickTime Streaming server. Whether this technical difference affects the TV Now world of 'near live' time-shifting remains to be seen.
 
The parties have already agreed that leave to appeal to the Full Court should be granted to the unsuccessful party, without need for formal application. The AFL has already announced an intended appeal and, given the commercial interests at stake, an appeal would seem inevitable.
 

 
For further information, please contact:
 
Andrew Wiseman, Partner, Allens Arthur Robinson
 
Miriam Stiel, Partner, Allens Arthur Robinson
 
Tim Golder, Partner, Allens Arthur Robinson
 
Philip Kerr, Partner, Allens Arthur Robinson
 
Sarah Matheson, Partner, Allens Arthur Robinson
 
Gavin Smith, Partner, Allens Arthur Robinson
 

 

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