Summary
On 1 February 2012, the Federal Court decided that Optus’ TV Now service does not infringe copyright in the broadcast of matches or infringe the rights of the Australian Football League (AFL), National Rugby League (NRL) or Telstra.
The case, Singtel Optus Pty Ltd v National Rugby League Investments1 , was one of the first to consider whether cloud computing systems can breach the copyright of others. Given the emergence of cloud services technology similar to Optus’ TV Now service, this decision may impact on the value of future broadcasting licence agreements for sporting organisations.
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Background
Telstra entered into an exclusive licence with the AFL and NRL to use their copyright in broadcasts of games on free-to-air television. This licence allows Telstra to provide its customers with broadcasts of both live and pre-recorded AFL and NRL games through its internet and mobile services.
In July 2011, Optus launched its TV Now service. The TV Now service is known as a “cloud service”. This means users can browse an electronic television program, select a free to air television broadcast and stream it later. The recording is not saved onto the user’s device; instead it is stored on Optus’ data centre (ie “cloud”) and is streamed by the user when he or she wishes to access the recording.
The broadcasts can be played back throughout the next 30 days on four compatible devices (PC, Apple, Android and 3G devices). Apple device users can watch the program approximately two-minutes after the recording starts and other users can stream the program after the recording is finished.
Optus' TV Now decision
According to the Federal Court, a TV Now service user makes the broadcast recordings by pressing the “record” button on his or her compatible device. The Court determined that the user copies the broadcast, not Optus. Optus' role was to provide the technical equipment that enabled users to record and stream the broadcast, similar to DVD or VCR equipment.
The Court decided that TV Now service users do not infringe AFL’s, NRL’s or Telstra’s copyright because of an exception in the Copyright Act 1968 (Cth) (Act). The Act states that an individual does not breach another’s copyright if he or she makes a broadcast solely for a private or domestic use to watch the broadcast at a more convenient time.
The Court accepted that users of the TV Now service made recordings of AFL or NRL games for their private and domestic use. Even though Apple device users can stream recordings in a matter of minutes, the Court ruled that the recording could still be watched “at a more convenient time”.
The Court acknowledged that there is a tension between “near live” viewing and a purpose of watching the material broadcast “at a more convenient time”. In the Court's view, being able to watch the broadcast away from a television (for example, on an Apple iPhone while travelling home from work) was relevant to the user’s choice of the most convenient time to watch the broadcast.
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Implications for sporting organisations
As a result of the Court's decision, Optus will be able to continue providing its TV Now service.
Sporting organisations, especially those which broadcast their sport on TV or the internet, should consider whether this decision will affect the value of exclusive licensing arrangements for internet and mobile phone content and of broadcast rights more generally.
It remains to be seen whether the AFL, NRL and Telstra will challenge the Court’s interpretation of the Act or seek further clarification on issues that were not directly considered in this decision. For example, the Court recognised that it did not resolve a number of other relevant issues, including whether Optus is in breach of AFL’s, NRL’s and Telstra’s copyright because of the way in which its technology creates and stores temporary files on Apple devices while the user views it. Any such challenge (and subsequent findings of the Court), will affect the position of all sporting bodies which hold the rights to the broadcast of their events or competitions.
Sporting organisations should also consider whether there are ways to improve the value of internet and mobile phone services. Perhaps one solution is to find a way to provide their preferred internet/mobile phone provider with additional content or information that is not available to the rest of the market (and will not be part of the broadcast).
The Australian Government has also indicated that it will review the exceptions in the Act during 2012. Sporting organisations should consider making submissions to the Government to seek changes to the Act to protect broadcast content. It is likely that this approach will form part of the long term strategy of the AFL and NRL.
Further information
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1
Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2) [20120] FCA 34
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