Judgment Delivery - Transcript of Video

Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2) [2012] FCA 34

RARES J
1 FEBRUARY 2012
SYDNEY


[Justice Rares sitting at bench]
 

The Australian Football League and the National Rugby League partnership 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 news 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 then 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 (that is, 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’ network attached storage or NAS 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 is finished.

Optus began these proceedings claiming that the AFL and NRL had made unjustified threats against it, within the meaning of section 202 of the Copyright Act 1968 (Cth). The AFL and NRL claimed that the TV Now service infringed their copyright in broadcasts of the 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 bases 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 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, that is, copies or films, of the broadcasts of the games, within the meaning of the Copyright Act, Optus infringed their copyright in those 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 section 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 or 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 recording (or copy) of the broadcast that was stored in Optus’ NAS computer in its data centre.

2. If the user made those recordings (or copies), did section 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 the broadcast by clicking on the “record” button of 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 own 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 copyright holders’ copyright in the broadcasts of the AFL and NRL games because of sections 111(1) and (2) of the Copyright Act. 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 last one is added a minute later.

I will adjourn the proceedings until later in February 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.

I propose to make orders that the parties confer and prepare draft declarations and orders to the effect of these reasons. I had originally understood that the parties found 3 February 2012 to be convenient, but I understand that there is a problem about that so what I will do is I will publish my reasons which contain what I had understood to be an order adjourning the proceedings to 9.30 am on Friday, but I will have to bury that after I have heard from the parties as I understand there might be a problem about that, so I will publish my reasons.

[Justice Rares passes document to Associate. Fades out.]