The service
In order to use the TV Now service an Optus customer entered into a contractual relationship with Optus and downloaded an App to a device such as a personal computer, mobile phone or iPad. By hitting a 'record button' within the App, the user would cause, via an automated process, a recording of the program to be made on servers controlled by Optus. When the user later decided to play back the recording, it would be streamed from those servers in a format appropriate to the user's device.
Trial Judge's decision
The AFL and NRL alleged that Optus infringed the copyright in broadcasts of their games by operating the TV Now service. In particular, they alleged Optus had infringed their copyright by making copies of the free-to-air television broadcasts of matches and communicating those copies to TV Now subscribers. Optus commenced proceedings against the AFL and NRL alleging wrongful threats of infringement asserting that there was no copyright infringement by reason of section 111 of the Copyright Act, which provided that, amongst other things:
(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.The trial judge, Rares J, analogised the Optus TV Now service to a VCR or DVR. His Honour determined that it was not Optus that had made the infringing copy, but rather the user the TV Now service, and that his or her conduct fell within section 111. Read our TMTBlog post 'Federal Court finds Optus' TV Now service does not infringe copyright' summarising this decision.
Appeal
The Full Court focused on the question of whether it was Optus or the user that made the copy of the program.
In a joint judgment, the Full Court held that Optus was either the maker, or alternatively, that Optus and the subscriber were jointly the makers of the copies.
The court rejected arguments that Optus acting as an agent for the subscriber or that the subscriber was the principal making the copy using a facility provided by Optus. In particular:
- The court considered that the concept of 'making' a cinematograph film of a broadcast (ie. to make a copy of it) requires a physical embodiment of the broadcast in an article or thing. Although the TV Now service only operated when a user hit the recording button, it did not necessarily follow that the subscriber was the, or the only maker of the copy;
- In this case, the physical embodiments were stored on Optus' facilities. The court emphasised that Optus had designed the service, gave it its functionality, owned the IP in it and marketed the service to its customers. Further, as the Court stated:
'[52]Optus at all times retained possession, ownership and control of the physical copies made on the hard disc of its NAS computer ...'
[60] ... [W]e consider that the system itself has been designed in a way that makes Optus the 'main performer of the act of [copying]' (to adopt the language used in a recent Japanese decision involving a service relevantly similar to the present, which has been supplied to the Court in translation): see Rokuraku II, First Petty Bench of the Supreme Court, Japan, 20 January 2011 ...
- The court held that:
[67] ... Optus’ role in the making of a copy – ie in capturing the broadcast and then in embodying its images and sounds in the hard disk – is so pervasive that, even though entirely automated, it cannot be disregarded when the 'person' who does the act of copying is to be identified. The system performs the very functions for which it was created by Optus.Optus' conduct in capturing, copying, storing and making available for reward, programs for later viewing by its customers meant that it exercised the exclusive rights of the copyright owner to make a copy of a broadcast.
Although it was unnecessary for the court to decide whether Optus was the sole maker of the copy or whether it was made jointly with the user, it indicated its preference for the latter view.
Implications
The judgment contains a number of sweeping statements, including at [64]:
'[64] It equally is not apparent to us why a person who designs and operates a wholly automated copying system ought as of course not be treated as a 'maker' of an infringing copy where the system itself is configured designedly so as to respond to a third party command to make that copy: see generally the criticism of Cartoon Network in Ginsburg, at 15-18.'that will be of concern for providers of storage services, such as cloud computing. Under this decision, the provider of an automated service that allows a customer to store content on servers or other devices owned and controlled by the service provider, may be directly liable for copyright infringement. Much will depend on the nature of the service and the fact that the TV Now service had the sole purpose of recording free-to-air television broadcasts may distinguish it from other general purpose remote storage services.
Nonetheless, the decision could have a chilling effect on the development of innovative online services.
Next steps
While the Full Court's decision overturns that of the primary judge, their Honours state at [9]:
'We have found the questions raised in the appeals to be of some difficulty and considerable uncertainty'These comments would indicate that the issues in dispute are ripe for consideration by the High Court.
0 comments:
Post a Comment