The Australian Football League (AFL) and the National Rugby League (NRL) claimed that Optus had infringed their copyright in free-to-air television broadcasts of their respective football competitions. They were joined in their allegations by Telstra, the exclusive licensee to stream AFL and NRL games footage over the internet and mobile telephony devices.
The AFL, NRL and Telstra (the rights holders) alleged that Optus had made infringing copies of cinematographic films of those broadcasts and had communicated those films to users of TV Now. Optus contended that its users, rather than Optus itself, had made the copies of the films and those users had not infringed copyright as their actions fell within section 111 of the Copyright Act 1968 (Cth) (Act), known as the time shifting exception.
In a decision very much focused on the practicalities of modern media consumption, Rares J held that the time shifting exception applied to TV Now. The decision (if upheld on appeal) creates opportunities for new media services but will force content owners and distributors to re-evaluate the value of exclusive rights to content on mobile and online platforms, at least where that content is also broadcast on free-to-air television.
Optus TV Now – the technology
Optus' TV Now service allows users to pre-select which free-to-air television programs they wish to record (including AFL and NRL games) and then play them back on any one of four compatible devices, namely PCs, Apple devices, Android devices and 3G devices, within 30 days. When users chose to record a particular program, Optus' system records the program in four different formats, which are stored in Optus' network attached storage (NAS) computer in its data centre. When a user later chooses to play the recorded program, Optus' data centre streams a copy of the program in a format appropriate to the device being used to view the program. If no user instructs TV Now to record a program, no recording occurs (an exception being the Apple QuickTime Streaming system which was not resolved in this proceeding). While any copy of a program made on the NAS is associated with a particular user, the copy of the program is not stored on the user's device.
Issues to be resolved
The dispute focused on section 111 of the Act, which provides that:
(a) 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.
(b) 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.
Rares J considered that there were three main issues to be decided.
1. When a user clicked the 'record' button to record a program, who made the film recording stored in the Optus' data centre – Optus or the user?
Rares J held that it was the user that made the recording.
The rights holders argued that Optus had made the recordings because it owned and operated the complex system that picked up the free-to-air broadcast, recorded it in the four formats and subsequently streamed it. However, His Honour considered that fundamentally, the user was solely responsible for the creation of the films – the user decided whether or not create a recording. If a user did not click 'record', no recording was brought into existence. Rares J construed the word 'make' in section 111 as referring to the creation of a recording by initiating a process using equipment that records the broadcast to reproduce someone else's content. Optus simply supplied the technology that allowed users to create the film recordings. His Honour considered that TV Now was analogous to the situation where a person uses a VCR or a DVR to record a television broadcast.
2. If the user made those recordings, did section 111 of the Act apply so that the recordings were not infringements of the rights holders' copyright in the broadcasts?
Rares J noted that when users subscribed to TV Now, they were taken through a sign up process during which a notice stating: 'it is a breach of copyright to make a copy of a broadcast other than to record it for your private and domestic use'. Further, a user is directed to read and agree to terms and conditions that include the terms: 'Optus TV Now is for your individual and personal use .... You are advised that it is a breach of copyright to make a copy of a broadcast other than to record it for your private and domestic use by watching the material broadcast at a more convenient time'. Those terms draw on the key elements of the section 111 exception.
The rights holders argued that Optus had not proved that the copies were made solely for private and domestic use for viewing at a more convenient time. His Honour rejected this contention, finding that it was contrary to the purpose of the section 111 exception (being to provide users greater flexibility to take advantage of technological advances) if a service provider was required to submit evidence of each user's individual purpose for each instance of use. Rares J was willing to infer that users of TV Now were playing the recordings for their own private and domestic use. He held that this was consistent with the Optus TV Now terms and conditions that users had agreed to and is also a 'recognition of ordinary experience of life'. He also commented that users viewed the recordings on their mobile devices and PCs, which by their nature, are private.
3. When a user clicked the 'play' button causing it to be streamed to their compatible device, did the user or Optus communicate the film to the public or make it available online to the public?
Under the Act, a copyright owner has the exclusive right to communicate a film to the public, meaning to electronically transmit the film to or make it available online to the public. Section 22(6) of the Act provides that a communication other than a broadcast is taken to have been made by the person responsible for determining the content of the communication.
Rares J held that the user was the maker of the communication. This was because the user had previously selected the program and had chosen the content of the transmission that they would later play. Again, his Honour drew parallels with other technologies, stating that it was 'just as if he or she had inserted a video cassette or DVD into a VCR or DVD player and pressed play'.
His Honour acknowledged that it was a somewhat incongruous finding that Optus did not 'communicate' the films given that it had stored the films in its data centre and its technological systems enabled the streaming to each user's device. However, his Honour held that s 22(6) operated such that the person who determines the content – in this case, being the user, and not Optus – is the maker of the communication.
This raised the issue of whether that communication was 'to the public'. His Honour found that there was no communication to the public.
When a user clicks the play button, the compatible format of the film stored on Optus' systems is streamed to a user's device. The copy of the film that the user sees is a separate copy from those saved for other users, who only see compatible versions that were specifically recorded for each of them. Further, His Honour found that there can be no communication 'to the public' where a user makes a recording to view it solely for private and domestic use at a more convenient time within the meaning of section 111 of the Act.
Comment
Rares J's application of the time shifting exception to copyright infringement certainly reflects the internet-enabled shift in the way that the public increasingly consumes its entertainment and media. The very public outcry this week from the AFL and NRL over the decision exposes the internet age's enduring dissonance between the free flow of digital content, on the one hand, and the ability of content holders to maintain exclusive control over that content and segment and monetise it across different platforms. Telstra, for example, is reported to have invested $153 million for exclusive internet rights (although presumably, this includes games that will not be shown on free-to-air TV).
The press has today reported that Senator Conroy, the Minister for Broadband, Communications and the Digital Economy, has given clear indication that while the government will await an appeal to the ruling, it is considering amending the Act to protect the broadcast rights of sporting bodies.
Partner: John Fairbairn
1. When a user clicked the 'record' button to record a program, who made the film recording stored in the Optus' data centre – Optus or the user?
Rares J held that it was the user that made the recording.
The rights holders argued that Optus had made the recordings because it owned and operated the complex system that picked up the free-to-air broadcast, recorded it in the four formats and subsequently streamed it. However, His Honour considered that fundamentally, the user was solely responsible for the creation of the films – the user decided whether or not create a recording. If a user did not click 'record', no recording was brought into existence. Rares J construed the word 'make' in section 111 as referring to the creation of a recording by initiating a process using equipment that records the broadcast to reproduce someone else's content. Optus simply supplied the technology that allowed users to create the film recordings. His Honour considered that TV Now was analogous to the situation where a person uses a VCR or a DVR to record a television broadcast.
2. If the user made those recordings, did section 111 of the Act apply so that the recordings were not infringements of the rights holders' copyright in the broadcasts?
Rares J noted that when users subscribed to TV Now, they were taken through a sign up process during which a notice stating: 'it is a breach of copyright to make a copy of a broadcast other than to record it for your private and domestic use'. Further, a user is directed to read and agree to terms and conditions that include the terms: 'Optus TV Now is for your individual and personal use .... You are advised that it is a breach of copyright to make a copy of a broadcast other than to record it for your private and domestic use by watching the material broadcast at a more convenient time'. Those terms draw on the key elements of the section 111 exception.
The rights holders argued that Optus had not proved that the copies were made solely for private and domestic use for viewing at a more convenient time. His Honour rejected this contention, finding that it was contrary to the purpose of the section 111 exception (being to provide users greater flexibility to take advantage of technological advances) if a service provider was required to submit evidence of each user's individual purpose for each instance of use. Rares J was willing to infer that users of TV Now were playing the recordings for their own private and domestic use. He held that this was consistent with the Optus TV Now terms and conditions that users had agreed to and is also a 'recognition of ordinary experience of life'. He also commented that users viewed the recordings on their mobile devices and PCs, which by their nature, are private.
3. When a user clicked the 'play' button causing it to be streamed to their compatible device, did the user or Optus communicate the film to the public or make it available online to the public?
Under the Act, a copyright owner has the exclusive right to communicate a film to the public, meaning to electronically transmit the film to or make it available online to the public. Section 22(6) of the Act provides that a communication other than a broadcast is taken to have been made by the person responsible for determining the content of the communication.
Rares J held that the user was the maker of the communication. This was because the user had previously selected the program and had chosen the content of the transmission that they would later play. Again, his Honour drew parallels with other technologies, stating that it was 'just as if he or she had inserted a video cassette or DVD into a VCR or DVD player and pressed play'.
His Honour acknowledged that it was a somewhat incongruous finding that Optus did not 'communicate' the films given that it had stored the films in its data centre and its technological systems enabled the streaming to each user's device. However, his Honour held that s 22(6) operated such that the person who determines the content – in this case, being the user, and not Optus – is the maker of the communication.
This raised the issue of whether that communication was 'to the public'. His Honour found that there was no communication to the public.
When a user clicks the play button, the compatible format of the film stored on Optus' systems is streamed to a user's device. The copy of the film that the user sees is a separate copy from those saved for other users, who only see compatible versions that were specifically recorded for each of them. Further, His Honour found that there can be no communication 'to the public' where a user makes a recording to view it solely for private and domestic use at a more convenient time within the meaning of section 111 of the Act.
Comment
Rares J's application of the time shifting exception to copyright infringement certainly reflects the internet-enabled shift in the way that the public increasingly consumes its entertainment and media. The very public outcry this week from the AFL and NRL over the decision exposes the internet age's enduring dissonance between the free flow of digital content, on the one hand, and the ability of content holders to maintain exclusive control over that content and segment and monetise it across different platforms. Telstra, for example, is reported to have invested $153 million for exclusive internet rights (although presumably, this includes games that will not be shown on free-to-air TV).
The press has today reported that Senator Conroy, the Minister for Broadband, Communications and the Digital Economy, has given clear indication that while the government will await an appeal to the ruling, it is considering amending the Act to protect the broadcast rights of sporting bodies.
Partner: John Fairbairn
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