Optus TV Now win challenges copyright law

An appeal of the Optus TV-recording case against the football codes and Telstra is a certainty, as it becomes the first major test of the 2006 amendments to the Copyright Act.

(Gavel image by walknboston, CC2.0)

Yesterday, Optus defeated attempts by the Australian Football League (AFL), the National Rugby League (NRL) and Telstra to claim that its TV Now app allows users to record free-to-air television to store in the Optus cloud infringes on copyright. The Federal Court ruled that Optus customers using the app are ultimately recording programs for their personal use, and this does not infringe on copyright because it falls under 2006 amendments to the Copyright Act 1968, which allow individuals to record TV programs to view later "at a time more convenient".

NRL CEO David Gallop and AFL COO Gillon McLachlan expressed disappointment in the outcome, and said yesterday it was likely they would appeal the case. Telstra, which has big sponsorship arrangements in place with both football codes, said it was reviewing the judgment, but denied speculation that the ruling would jeopardise the company's $153 million contract with the AFL for exclusive mobile broadcasting rights.

Justice Steven Rares expected that the case would be appealed to the full Federal Court, and allowed leave to appeal the case before he had even handed down his judgment.

Robert Todd, partner with law firm Blake Dawson, told ZDNet Australia that the TV Now case is just the start for litigation around cloud-based services and their impact on copyright.

"It's the first step in what will be a longer process," Todd said. "It's the first time that this section in the Copyright Act has really been looked at in Australia. The section follows the technology, namely the idea of time-shifting, which grew up with the development of TiVo and Foxtel's IQ. What's interesting about it is, the impact of using cloud services, and how they're going to affect commercial arrangements."

"I think we're going to see a lot more litigation around the cloud and a lot more legal issues arising out of it."

He said technology races ahead of where the law is at, and when the time-shifting provisions were brought into the Copyright Act, it was not conceivable that the recording could be done anywhere except in the home.

"The idea that you are offshoring or clouding your personal-use services probably didn't occur to them at the time," he said.

He said the case will have wider implications because people will have to think about the impact of cloud services on many other areas as a result.

For every personal recording made by the TV Now app, Optus creates four different file formats to allow the user to watch the recording on a number of different devices such as an iPhone, or a PC. Todd said that this would likely be examined in the appeal, and that it was possible Optus may amend this to allow the user to only record in one format of their choosing to ensure it still fell under the provisions of the Act.

Peter Black, senior law lecturer at the Queensland University of Technology, told ZDNet Australia that the 2006 amendments to the Copyright Act were done in such a way to allow for technology advances.

"They were deliberately drafting those provisions in such a way that they would be technology-neutral, so that when new technologies came along that did a similar sort of thing they would be covered by the existing provisions," he said.

But he said that there had still been a number of advancements in technology since 2006 that may not have been considered as part of the legislation, and said that the AFL and the NRL should be optimistic of being successful in an appeal.

"I think that the right holders would be optimistic that they might be able to persuade the full court of the Federal Court. They'll take comfort in the fact that the trial judge here has not made any key findings of fact that would make it hard for the appeal court to reach a different decision," he said.

"[Rares] has very much focused on the user, the user's experience, how the user interacts with the TV Now service. It's a very user-focused judgment rather than adopting some of the more technical or legalistic arguments that the rights holders were putting forward."

Both Black and Todd admitted that regardless of the outcome of the appeal, it was likely that the decision would be appealed to the High Court. Black was not certain that the High Court would be interested in hearing another copyright case so soon after the copyright trial between the film studios and iiNet, but Todd suggested that given it was the first testing of the 2006 amendments around time-shifting provisions, it may spark the interest of the High Court to hear the case.

Telsyte research consulting director, Chris Coughlan, told ZDNet Australia that it was likely that there would also be lobbying from the rights holders to the government to change the legislation.

"This process would take at least two years maybe longer with a Federal Election in 2013," he said.

Coughlan said the ruling will impact value for content on mobile, IPTV and subscription TV particularly for sporting events.

"The content owners may well look to make this up by trying to charge a higher premium for the [free-to-air] rights," he said. "Current mobile and IPTV rights holders will be considering the options they have to renegotiate, or litigate, with the content owners, as the value of these rights has essentially been circumvented."

Optus today took out a full-page ad in The Australian newspaper saying the company "defended tomorrow" in winning the court case.

"Yesterday, Optus won a court case that could have severely limited the content you see on your mobile devices both now and into the future," Optus said in the ad. "As technology is changing and becoming more exciting every day, we didn't think this was right, or indeed Australian. That's why we can now all enjoy a mobile future filled with possibility. And that's a future we thought was worth defending."