news The full bench of the Federal Court has ruled that Optus’s TV Now online television recording service is in breach of the Copyright Act, in the next stage of a closely watched lawsuit seeing the National Rugby League (and eventually the AFL and Telstra) pitted against the telco for its attempt to make TV broadcasts more readily available to customers online.

The Optus TV Now service allows customers to have free to air television programs recorded when broadcast, using Optus’ centralised systems, and then played back at the time of a customers’ choosing on their Optus mobile device or PC. This technique is known as “time-shifting”, and attracted the legal ire of the NRL and other groups such as the Australian Football League, which had granted Optus rival Telstra an exclusive licence to make their broadcasts available online.

Late in 2011, Justice Steven Rares of the Federal Court had found in Optus’ favour in the case which the telco had filed against the NRL (later joined by Telstra and the AFL), stating that Optus’ technology was similar to recording a TV show using a video recorder in a loungeroom. However, in a new judgement after an appeal, the full Federal Court found today that Optus’ technology could not come under the auspices of the Copyright Act.

In its judgement, available online here, the Federal Court wrote that there were two issues at the heart of the case — who recorded the TV shows, and if Optus’ act in recording the device constitutd an infringement of the copyright of the NRL, AFL or Telstra, could Optus invoke the “private and domestic use” defence under Section 111 of the Copyright Act, which allows limited recording of content for personal use.

The initial judgement had found that customers made the recording. “Ours is a different conclusion,” wrote the full Federal Court. “The maker was Optus or, in the alternative, it was Optus and the subscriber. It is unnecessary for present purposes to express a definitive view as between the two. Optus could be said to be the maker in that the service it offered to, and did, supply a subscriber was to make and to make available to that person a recording of the football match he or she selected.”

“Alternatively Optus and the subscriber could be said to be the maker for Copyright Act purposes as they acted in concert for the purpose of making a recording of the particular broadcast which the subscriber required to be made and of which he or she initiated the automated process by which copies were produced. In other words, they were jointly and severally responsible for the act of copying. That is our preferred view.”

Following on from this determination, the court found that Optus could not use the Section 111 defence under the Copyright Act.

The case has been viewed as a test of such services in Australia. However, the Federal Court warned against taking its implications too broadly. “We should emphasise that our concerns here have been limited to the particular service provider-subscriber relationship of Optus and its subscribers to the TV Now Service and to the nature and operation of the particular technology used to provide the service in question,” it wrote. “We accept that different relationships and differing technologies may well yield different conclusions to the “who makes the copy” question.”

Optus has reportedly suspended the TV Now app. It is unclear yet whether the telco will appeal the issue.

opinion/analysis
The weight of public opinion (at least in the technology community of which I am a part of) appears to be clearly behind Optus on this one. People want more options to view the content that they love and all Optus was doing in this case was giving them these options. Why should we be locked in to using a Telstra connection if we want to use the Internet to watch NRL or AFL games? The answer: Ideally, we shouldn’t.

However, as far as I can see, the Federal Court made the right decision here, on the basis of the information which it had and the available legal structure currently in place.

The reason I feel this way is that it would be much, much more efficiently technologically if Optus didn’t record every free to air broadcast that each of its consumers requested, but instead simply recorded all free to air broadcasts by default and then provided them on-demand style to consumers. I’m sure this is the way the Optus TV Now system would end up working, if it doesn’t already. You don’t want to record every AFL game ten thousand times for ten thousand consumers. You want to record it once and then provide that copy to each consumer.

This style of system goes beyond the personal use doctrines in the Copyright Act, because it becomes a systematised method for Optus to make money using other people’s content. And that, I think, is what the Court has found today, accurately. It’s not a bad thing to record a few shows for personal consumption. But when a major corporation starts recording, eventually, thousands of shows it doesn’t own and providing them on-demand to subscribers, that goes too far — even if the ads are still included.

What I would like to see, which I don’t think we have seen yet in Australia, is some deeper thinking around what copyright could and should look like in 2012 and beyond. Clearly Optus is trying to provide a service which consumers want, and just as clearly, legislation is prohibiting it from doing so. Innovation is being stifled here, by the law. And that’s never a good situation.

We have a good chance to do just this through the review currently under way into the digital sections of the Copyright Act. Let’s hope we get some good submissions and some good deep thinking in that process. And, above all, let’s hope that the Attorney-General’s Department steers Australia through the right path in that vein.

Image credit: Flying Cloud, Creative Commons

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1. Bob.H
   Posted 27/04/2012 at 4:49 pm | Permalink | Reply

   I am not a lawyer and am just another mug who finds the internet a great source of information, entertainment and communication.

   The Optus case and the iiNet case if nothing else demonstrate to my mind that the current copyright system is a bit of a mess.

   My understanding of what copyright law is intended to achieve is to allow a person who produces intellectual property to be rewarded for their efforts and not have that material used by others for profit without them still receiving their just reward. In this sense it is a means of recognising that artists, authors, etc., are entitled to “a fair days pay for a fair days work”.

   However there are things that exist in the current copyright arrangements that I find very puzzling and consider that they are not designed for the benefit of the person who produced the intellectual property or the final consumer.

   Why should copyright be exclusive to one particular access device?
   Why should copyright be restricted to a particular geographical location?
   Why should copyright last beyond the lifetime of the creator of the property?
   Why should I be restricted in providing my friends or family, at no cost, with my copy of a copyrighted work?
   Why should rights holders be able to buy the outright copyright in a work cheaply and then manipulate its distribution to maximise their profits?
   Why doesn’t the copyright in a hard copy book I have purchased also extend to having it on an e-reader?

   Both the iiNet case and the Optus case were about the rights of middlemen in the copyright equation to wring as much profit as possible out of the copyright they have bought to my way of thinking. Neither case considered or needed to consider the rights of the consumers or those who created the content. A pretty strange thing this copyright law.

2. Tezz
   Posted 27/04/2012 at 5:27 pm | Permalink | Reply

   I think I might just copy and paste my comment post from ZDNet on whether this was a good or bad decision, covers my opinion pretty well.

   “Bad, the full ruling means that cloud based recording of free to air broadcast media (not talking TV Now specifically, but generally for anyone who wants to provide a service like that) is against the copyright act. This is going to stifle innovation especially moving into an “NBN World” where the benefits of being able to record something and then play it back wherever you are on whatever device would have been a key benefit.

   A far better solution would have been either to enforce a blackout on cloud based services being able to record events already covered by a specific broadcast agreement, or to enforce that the event must be recorded and watched on delay once the recording is complete. Yes these would require an amendment to the copyright act, but at least it wouldn’t put hold a genuinally beneficial product idea.”

3. Gordon Edwards
   Posted 27/04/2012 at 5:28 pm | Permalink | Reply

   The copyright system was built and intended to do one thing, and only one thing: protect an entity’s Intellectual Property.

   It does not matter that thousands of people want to view/listen to/watch that IP. If they want to be involved, they pay for the privilege to some organisation (A) which provides the means of involvement.

   But if some other organisation (B) then forwards that content to the masses at B’s profit without remunerating A, then THAT is theft.

   I am not one of Telstra’s admirers. But it sealed a deal with the NRL and AFL and deserve to receive the benefit for which it paid. How much was Optus paying Telstra? Anything? How much does Optus give the NRL and AFL? Anything?

   The Full Bench’s decision is the right decision.

   Gordon.

   • Tezz
     Posted 27/04/2012 at 5:57 pm | Permalink | Reply

     Did Telstra sign a deal for the recording and subsequent streaming of “every” program broadcast on free to air television? Because that is what the decision ultimately covers.

     You can argue all you want about the how this great for the AFL, NRL, etc, and ultimately I will agree with you, but I won’t agree that the benefit gain there outweighs the cost by making this type of service (that being an online PVR) a breach of copyright and making it illegal across the board.

     • Gordon Edwards
       Posted 27/04/2012 at 6:23 pm | Permalink | Reply

       “Did Telstra sign a deal …? Because that is what the decision ultimately covers.”

       You have to do better than that. “Every program…”? Even those broadcast by 7? Or 9? Or…

       Whatever I write is there ultimately to be challeged by others if they disagree. But, detail.

       BTW, what does the acronym “PVR” mean?

       Gordon.

       • Tezz
         Posted 27/04/2012 at 7:14 pm | Permalink | Reply

         Yes, every program on every free to air channel. Go read the full decision, it’s all I’m there.

         PVR = Personal Video Recorder

     • Gordon Edwards
       Posted 29/04/2012 at 4:27 pm | Permalink | Reply

       OK Tezz, I had it wrong.

       The Full Bench’s decision is the WRONG decision.

       I was not aware of the “global” nature of TV Now, that it was intended as a “cloud”-based recording repository rather than simply a delayed re-broadcast mechanism.

       It is interesting that the appellants are not recorded in the judgement as having their own “time-shift” technology — which is the primary reason for recording a broadcast in the first place.

       Para 4 of the Reasons For Judgement–>Introduction is particularly scary. If Optus is held to be co-liable with the subscriber, then an extension of this judgement could spell the end of all personal recording of any streamed content, and/or a successful assault on entertainment downloads via any form of P2P networking by holding the maufacturer or provider of recording equipment co-liable.

       Such an extension would be in line with and to the same extent as the Bench’s interpretation of the Optus TV Now process outlined in Para 51 of Reasons For Judgement–>Appeal Issues by using the last sentence of Para 51.

       Para 51 supports Para 4, which is directly informed by Paras 89 through 93 of Reasons For Judgement–>Appeal Issues. These seven paragraphs can in my mind be used (most likely) to force ISPs to deliver up any of their subscribers who are detected using P2P for downloading copyrighted material.

       Their Honours have given AFACT the victory it missed out on in the iiNet court battle.

       Gordon.

4. Glenn
   Posted 27/04/2012 at 10:38 pm | Permalink | Reply

   “But if some other organisation (B) then forwards that content to the masses at B’s profit without remunerating A, then THAT is theft.”

   Its not considered theft if the organization you stole from still has, and always had what you are accused of stealing. It cant legally be considered theft unless the process was transitive.

   What you describe is called copyright infringement.

   • Gordon Edwards
     Posted 29/04/2012 at 2:37 pm | Permalink | Reply

     “…is called copyright infringement.”

     The unclothed King is till the King, no matter how ridiculous he appears.

     Gordon.

5. SMEMatt
   Posted 28/04/2012 at 11:25 am | Permalink | Reply

   Maybe the broadcast networks should chase the AFL for diminishing the Value of their broadcast rights by being involved in this case. After all less people watch their broadcast and their advertising reduces the value of the rights.

   The main issue a number of people have with copyright is the seeming disconnect between the people who actually produce the content, the people who benefit from copyright and the audience.

6. Duke
   Posted 28/04/2012 at 7:42 pm | Permalink | Reply

   “let’s hope that the Attorney-General’s Department steers Australia through the right path in that vein”

   I dunno Renai, they appear to be steering us into the arms of TPP et al, which will effectively pass the buck for any independent decision making by the government about copyright and hand our butts to the yankee corporate minders… it always was a bit hard for the pollies to make calls there… given the ‘contributions’ the rights holders make to them.

7. Tom
   Posted 28/04/2012 at 8:37 pm | Permalink | Reply

   This is the completely wrong decision and it’s unlikely the High Court will uphold it based on the decision of more superior courts in o/s jurisdictions that settled this argument years ago (US and Singapore). Even the US government (DOJ) agreed cloud PVRs are within the realm of fair use.

   Essentially, they found that moving a hard drive from your living room to a cloud server was a logical extension of the PVR concept.

   This just further demonstrates the immaturity of our judicial system in understanding technology, and fortunately the High Court isn’t populated with luddites…

8. Muso1
   Posted 29/04/2012 at 3:09 pm | Permalink | Reply

   The judgement is right if you want major sports to be funded through broadcasting rights contracts.
   No one like Fox or Telstra is going to pay millions, if Optus can show the same content a few minutes later without paying for it.
   If Optus believe they are serving the consumer, then we need to find a new funding model for professional sports.

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