27 April 2012: The Full Court of the Federal Court handed down its unanimous judgment in National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd[1] (‘the judgment’) on 27 April 2012. The decision allowed the NRL, AFL and Telstra’s appeal from the decision of Rares J at first instance[2] that Optus had not infringed any copyright through the operation of its ‘TV Now’ online television streaming service.
I Facts/Background
Optus operates a (now suspended) service called TV Now for its private customers and some employees small and medium-sized business customers. The service allowed subscribers to select free to air TV programs online that would be recorded and then made available to be streamed to their PCs or mobile devices by Optus. The technical details of the service involved the important fact that requests for recording were handled by Optus and the programs were stored on its servers, not downloaded by customers. The AFL and NRL had given to Telstra the exclusive right to communicate broadcasts of their televised matches via the internet and mobile telephony devices.
It was alleged that Optus, in allowing customers to record and stream free to air broadcasts of AFL and NRL matches through TV Now:
- had violated s. 101 of the Copyright Act 1968 (Cth) (‘Copyright Act’) by making a copy of broadcasts in which the AFL/NRL and Telstra held copyright; and
- could not rely on s. 111 of the Copyright Act allowing for copies of broadcasts to be made for purely personal or domestic use.
II Did Optus make copies of copyright works?
It was accepted that if Optus could be held to have made copies of the relevant AFL/NRL broadcasts that it would have infringed copyright. The only question was whether Optus’ role in running the TV Now service actually involved the ‘making’ of such copies. The case essentially turned on the definition of ‘making’ that the court adopted, as applied to the technical details of the TV Now service. The court placed the dispute within the context of a ‘conflict between the electronic equipment industry and the entertainment industry’[3].
Optus argued that it was merely providing an automated means for individuals (its customers) to make copies of the broadcasts. The court however accepted the arguments of the appellants, that the systems set up by Optus were sufficient to demonstrate that it (Optus) was making the copies, either entirely or with the joint participation of its customers.[4] The court found Optus’ argument, that because it had established automated functions meant it was not a person involved in making the copy, to be ‘contrived’,[5] and that the TV Now service was not analogous to merely providing a photocopier to a customer.[6] Using the definition of ‘make’ in the Oxford English Dictionary (as ‘producing a material thing’), the court concluded that Optus placing the copy on its hard drives/servers was enough to be considered making the copy.[7]
The court referred to Japanese authority[8] in establishing that Optus was the ‘main performer’ of the act of copyright infringement.[9] It was ultimately established that Optus’ role in making the copy by embodying it on its hard drives, although automated, was ‘so pervasive’ as to make it the ‘person making the copy’.[10] There was a ‘nexus sufficiently close and causal’ to the illegal copying to conclude that Optus had copied, stored and made available for reward, the copyright broadcasts.[11] Optus had therefore infringed s. 101 of the Copyright Act.
The court also concluded that the relationship between the subscriber and Optus was such that the subscriber ‘instigates’ the copy and Optus ‘effects’ it, meaning that the two parties ‘act in concert’ to make the copy.[12] This leads to the conclusion that Optus and its subscribers were joint and severally liable for the infringement.[13]
III Could Optus rely on section 111 of the Copyright Act?
Section 111 of the Copyright Act allows for the making of copies of copyright works for ‘personal or domestic use’, whether or not those copies are made in a domestic setting. Optus argued that the use the copies were put to fell within s. 111 and therefore it was excused of violating s. 101.
The court disagreed after examination of the purpose of s. 111, with reference to explanatory memoranda for the 2006 Bill introducing that section. It found the section was intended to ‘recognise present practices’ such as using DVR, DVD or VCR recorders to record free to air TV for personal use. [14] Allowing for outsourcing to commercial providers was ‘not contemplated’ by s. 111 and it was not intended to cover commercial copying such as that engaged in by Optus.[15] As such Optus’ actions were outside the scope of s. 111.[16]
The court did note, however, that Optus’ customers would come within the purview of s. 111 in their use of the TV Now system and therefore would not be liable for breach of s. 101.[17]
IV Policy considerations and analysis
The case establishes that the Copyright Act remains somewhat inflexible in addressing the rapidly developing manner in which individuals enjoy content, particularly over the internet and mobile devices.[18]
The court itself recognised, and addressed the pressure on it to recognise, the rapid developments in the state of copyright and content management, citing the High Court’s recent statement in Australian Education Union v Department of Education and Children’s Services [2012] HCA 3 at [28], that ‘[i]n construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose.’[19] In this way the court has again emphasised the need for legislative action with regard to rapid technological change.[20]
Optus has suspended the TV Now service and is understood to be currently considering whether to apply for leave to appeal to the High Court.
This decision will also no doubt also factor into the Australian Law Reform Commission’s current review of the state of Australian copyright law.[21]