AFL, NRL and Telstra unable to stop unlicensed "near-live" viewing of matches
On 1 February 2012, the Federal Court of Australia confirmed that Optus is able to offer to users "near-live" broadcasts of sporting events, without having to pay licence fees to the rights holders, relying on the "time-shifting" exception in the Australian Copyright Act.
The Australian Football League (AFL) and National Rugby League (NRL) own the copyright of broadcasts made on free to air TV of their respective competition games. Telstra holds an exclusive licence from the AFL and NRL to utilise these free to air broadcasts of live and pre-recorded AFL and NRL games on the internet and mobile phones services. The AFL, NRL and Telstra claim that Optus breached their copyright by broadcasting a number of AFL and NRL games in September and October last year by offering a service that gives a user the ability to record free to air television programs, including AFL and NRL games, and play them back on any one of four compatible devices, being, PCs, Apple devices, Android devices and 3G devices. Once the record button is pressed the program is recorded by the system for each individual user in four different formats to accommodate for PCs, Apple, Android and 3G devices. Optus' system makes four copies of each broadcast for each individual user of the service who wished to record that certain program, with these copies being stored in Optus' data centre. When a user clicks play on their compatible device, Optus' data centre streams (does not download) the copy of the program in the appropriate format to the user's device.
Section 111 of the Australian Copyright Act allows a person to make a copy/recording of a broadcast "solely for his/her private and domestic use by watching...the material broadcast at a time more convenient than the time when the broadcast was made". Optus relied on this provision to argue that:
- the recording was made by the user;
- the recording is a legitimate "time-shift" of the broadcast.
These arguments were accepted.
The Court held that a service provider is not liable for copyright infringement simply because it offers a service that makes recordings automatically upon a user's command.
The Court also accepted that the defence in section 111 applied. The Court accepted that " ordinarily, a user would watch a broadcast of an AFL or NRL game for his or her own individual pleasure and the same would apply to a recording of such a broadcast" and that the copy was made to watch at a more convenient time, even if the user watched these time-shifted recordings "near live" within minutes of the start of the broadcast.
The Court also accepted that the defence applied even though more than one copy was "time-shifted". On its face, section 111 is not limited to a single copy that is made for viewing at a later time, and is to be contrasted with the "format shifting" provisions" for films in section 110AA. The format shifting exception does not apply to the making of more than 1 copy (excluding a temporary copy that is made incidentally as a necessary part of the technical process of making the main copy) at the same time. The copyright owners argued (unsuccessfully) that the making of more than 1 copy for time-shifting purposes took the copying outside the protection of the time-shifting defence because it had not been proved, and in any event was unlikely, that each user had all four kinds of compatible device. Further, there was no need for more films to be made than the one necessary for the user to satisfy a desire to time-shift the broadcast for the convenience of his or her viewing. They argued that this gave the user significant freedom of choice as to the format for viewing. In addition, they argued that section 111(1) used the indefinite article "a" in the expression "makes a cinematograph film or sound recording" to denote that only one film or recording was authorised by the statute. Each of these arguments was rejected by the Court.
The user is indifferent to the process that creates a film that only he or she can gain access to, so long as the service delivers a streamed film to whatever compatible device he or she chooses to use to watch the recorded film at the time of the user's choice. Provided that the user satisfies the requirements in s 111(1), each of the films in the four formats that he or she causes some technology or equipment to make, will not infringe copyright by force of s 111(2) unless one of the circumstances in s 111(3) has occurred.
The decision has caused significant concern amongst rights holders and the government has announced that it is urgently considering its implications, and may amend the provisions.
It is also expected that the decision will be appealed. Telstra has also indicated that it may adopted a similar strategy in respect of sports content licensed exclusively to Optus.
Whatever happens in the short-term, given the players involved, and the value of sports broadcasting arrangements for many sports, and the commercial interest of both Telstra and Optus, it is a battle that will be expected to continue for some time.
For further information please contact:
Matthew Hall, Partner Phone: +61 2 9233 5544 Email: mdh@swaab.com.au
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