Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2)
[2012] FCA 34
RARES J
SUMMARY
In accordance with the practice of the Federal Court in some cases of public interest, importance or complexity, the following summary has been prepared to accompany the publication of the Court’s reasons for judgment. This summary is intended to assist in understanding the outcome of this stage of the proceeding and is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment which will be available on the internet at http://www.fedcourt.gov.au together with this summary.
Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2)
[2012] FCA 34
RARES J
SUMMARY
The Australian Football League (AFL) and National Rugby League partnership (NRL) own the copyright in broadcasts made on free to air television of games played between teams in their respective competitions. Telstra has an exclusive licence from the AFL and NRL to exploit free to air broadcasts of live and pre-recorded AFL and NRL games on the internet and mobile telephony. The AFL, NRL and Telstra, which I will call “the rightholders”, have claimed that the applicants in these proceedings, which I will call “Optus”, have breached their copyright in broadcasts of a number of AFL and NRL games made in September and October last year.
Optus began offering a new service called “TV Now” in July 2011 to its private, as well as small to medium business, customers. The service 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, namely, PCs, Apple devices, Android devices and 3G devices.
Optus has established a complex recording system to operate the TV Now service. If a user of its service clicks the “record” button for a program in the service’s electronic program guide, Optus’ equipment records that program individually for each user in four different formats (i.e. one each for PCs, Apple, Android, and 3G devices). Thus, Optus’ system made four copies of each broadcast for every user of the TV Now service who clicked “record” for an AFL or NRL game. These copies were stored in Optus’ NAS (network attached storage) computer in its data centre. The user can view the recording in the 30 days following the time of the original broadcast. When a user clicks “play” on his or her compatible device, Optus’ data centre streams the copy of the program in the appropriate format to that device so that the user can watch it. However, the streamed copy is not downloaded to the users’ device. And, users with Apple iPads or iPhones can watch a program selected for recording “almost live” within about two minutes of the commencement of the actual free to air broadcast. Users with other compatible devices (PCs, Android and 3G devices) can only watch a recorded program after the broadcast had finished.
Optus began these proceedings claiming that the AFL and NRL had made unjustified threats against it, within the meaning of s 202 of the Copyright Act 1968 (Cth). The AFL and NRL claimed that the TV Now service infringed their copyright in broadcasts of AFL and NRL games. They also said that they would seek to restrain Optus from continuing to provide its TV Now service. The AFL and NRL have now put these matters forward as the basis of their cases. The Court added Telstra as a party to enable it to assert its similar claims as an exclusive licensee.
The central question with which this judgment is concerned is whether Optus, by operating its TV Now service, infringed the copyright interests of the rightholders in the free to air broadcasts of some live and pre-recorded AFL and NRL games.
The rightholders alleged that when Optus’ equipment made cinematograph films, (i.e. copies or films) of the broadcasts of the games, within the meaning of the Copyright Act, Optus infringed their copyright in these broadcasts. The rightholders also alleged that Optus later communicated the recordings or copies to users of the service when they viewed these on their compatible devices.
Optus contended that each user of the TV Now service, rather than it, had recorded, or made the recording, and played it without any infringement of copyright. Optus relied on an exception in s 111 of the Copyright Act. In essence, the exception allows a person to make a film, or copy, or recording of a broadcast solely for his or her 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. If the person does make a copy in those circumstances, then the making of the recording will not infringe copyright in the broadcast.
The parties agreed, and the Court ordered, that seven principal legal issues on the application of the Copyright Act to the TV Now service should be decided before any remaining issues so that they could have some clarity about their positions, if possible, before the 2012 football season began. In substance, the issues concerned the following questions:
1. Whether, when the user clicked the “record” button on his or her compatible device, Optus or the user of its TV Now service made the recordings (or copies) of the broadcast that was stored in Optus’ NAS computer in its data centre.
2. If the user made those recordings (or copies), did s 111(1) and (2) of the Act apply so that the recordings were not infringements of the rightholders’ copyright?
3. When the user clicked the “play” button to view a recording, that he or she had caused to be made utilising the TV Now service, did Optus or the user cause one or more different infringements of the rightholders’ copyright to occur when the recording was streamed to the user’s compatible device in the appropriate format? That issue concerned whether Optus, or the user, electronically transmitted the recording, or made it available online, to the public by streaming it to the user.
I decided the first question by finding that the user made each recording of a broadcast by clicking on the “record” button on his or her compatible device. I considered that this result was substantially similar to the position where a person used a video cassette recorder (VCR), digital video recorder (DVR) or similar device to copy a television broadcast. Even though Optus provided all the significant technology for making, keeping and playing the recording, I considered that in substance this was no different to a person using equipment or technology in his or her home or elsewhere to copy or record a broadcast. I noted that a similar result had been reached by appeal courts in the United States and Singapore.
On the second of the questions, I decided that when the user clicked the “record” button, he or she did not infringe the rightholders’ copyright in the broadcasts of the AFL and NRL games because of s 111(1) and (2). That was because the evidence suggested that individual users had made the recordings using the TV Now service solely for their private and domestic use by watching the recordings at a more convenient time, even if they watched these “near live” within minutes of the start of the broadcast. I considered 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. I found that such a recording or film was made by the user to watch it at a time he or she considered to be more convenient than when the live broadcast occurred, even if only by minutes.
I decided the third question, which involved technical legal arguments, by finding that the user of the TV Now service, rather than Optus, was responsible for electronically transmitting, or making available online, the recording he or she had recorded. That was because by clicking the “play” button, the user caused the recording to be streamed to his or her compatible device and only he or she, or persons he or she invited, could watch it. Those persons were not “the public”.
Accordingly, I decided that Optus’ TV Now service did not infringe copyright in the broadcasts of the AFL and NRL games in the particular ways that the rightholders alleged. However, some other issues may still need to be resolved. These include whether Optus infringes copyright because the technology used to make a recording in the format suitable for certain Apple devices creates and stores six temporary files of 10 seconds duration every minute, and then deletes the first 10 second file as the latest one is added one minute later.
I will adjourn the proceedings until 3 February 2012 so that the parties can agree on the formal orders that need to be made to reflect its decision. I will order the rightholders to pay Optus’ costs. The parties agreed at the hearing that leave to appeal to the Full Court of this Court should be granted to any unsuccessful party without it having to make a formal application for leave to appeal from what was, technically, an interlocutory order. This was because of the significant legal issues and commercial importance of any decision that I would make on the separate issues. This avoided unnecessary costs since the nature of any decision on the issues meant that leave to appeal would have been sought and granted in any event.
