Case Report: NRL Investments Pty Ltd v Singtel Optus Pty Ltd

Background:

The Optus ‘TV Now’ service was introduced to customers in mid-2011. The service allows Optus customers, through their online ‘My Zoo’ account to record certain free-to-air television programs for later viewing on personal devices (“time shifting”). The recordable programs included and subscribers to the service accessed several AFL and NRL games which were broadcasted in September 2011. The AFL and NRL as copyright holders and Telstra as exclusive licensee of the broadcast rights commenced proceedings on the basis that Optus had infringed their copyright in the broadcasts by way of the TV Now service.

Decision in the Federal Court at first instance:

Justice Rares of the Federal Court found in February 2012 that Optus had not infringed on the rights of the AFL, NRL and Telstra. The basis for this decision was that it was the subscriber that ordered the recording to occur through their online account and the rest of the processes were automated. His Honour found that there were similarities between a subscriber initiating the recording online and the use of a VCR or DVR. It was held that this action fell within the scope of the “private and domestic” use exception contained in s111 of the Copyright Act 1968 (Cth).

Decision of the Full Court of The Federal Court on appeal:

The decision of the Full Court of the Federal Court made in April 2012 overturns the first instance decision and finds in favour of the AFL, NRL and Telstra. There are two main issues that led to this result:

Firstly, the court considered who for the purposes of the Copyright Act 1968 (Cth) was the maker of the recording, was it Optus or the subscriber or both? The maker of the recording was held to be Optus or Optus and the subscriber; this was a fundamental departure from the reasoning in the first instance decision. In coming to this conclusion, the court considered that Optus made the football matches available for recording, alternatively, Optus and the subscriber could be found to be acting in concert as it is the subscriber that initiates the automated process that gives rise to a recording being produced. In addition, the court found it to be important that subscribers were unlikely to know that by selecting to record a program, Optus would record four versions of the broadcast; one for each type of device that TV Now was available on. It was emphasised that Optus gave effect to the recording as it captured, copied, stored and made available to subscribers, a program for later viewing.

Secondly, the court considered whether the “private and domestic” use exception in s111 applied to this situation. Importantly, their Honours determined that there was nothing in the s111 to suggest that there was an intention to permit commercial copying on behalf of individuals.  Optus admitted that it does not make use of the recordings; rather it stores them for the subscribers.  Optus’ recording of the programs allowed subscribers to watch the programs within the meaning of s111, however, Optus itself did not satisfy the requirements of this exception and consequently infringed the copyright of the AFL, NRL and Telstra.

Implications:

The decision has reaffirmed the value of licencing of digital rights by sporting organisations; however it remains open for Optus or other service providers to develop technology that will provide the same service to customers without infringing on copyright. Shortly after the decision of the appeal was handed down Optus suspended the TV Now service.

Optus has announced that they will appeal this decision to the High Court.

Author: Michael Koss

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