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On 26 August 2011, Australian telecommunications company singTel
optus pty limited (Optus) launched a pre-emptive
action in the Federal Court regarding the legality of its IPTV
service Tv now amid potential breach of copyright claims from
broadcast copyright holders.
THE FACTS
Optus is seeking to defend its TV Now service against potential
breach of copyright claims threatened by sporting giants the
Australian Football League (AFL) and National
Rugby League (NRL).
TV Now allows users to record free-to-air TV programs to the
cloud and play back the recording within 30 days via a computer or
mobile phone, in return for a monthly subscription charge.
The AFL and the NRL, keen to protect their lucrative
broadcasting deals, quickly denounced TV Now, asserting that it
would potentially breach their broadcasters' copyrights.
Optus responded by bringing the preemptive action, dismissing
the claim as 'groundless' and comparing the service to
personal video recorders, which are widely available on the
market.
'TIME SHIFTING' AND COPYRIGHT LAW
Under Australian law, the amended Copyright Act 1968
(Cth) (Copyright Act) permits 'time
shifting', namely the recording of broadcast TV by individuals
for 'personal and domestic use' to be watched at a
'more convenient time' (s.111).
Perhaps significantly for Optus, the first tabled draft of the
Copyright Amendment Act 2006 (Cth), by which the above
provisions were introduced, limited this right to domestic premises
only, but this was dropped citing potential confusion regarding the
scope of 'domestic premises'.
Optus' action draws parallels with a similar case heard
recently in the United States concerning the music streaming
service MP3Tunes. Whilst some aspects of the case were lost on
other grounds, MP3Tunes successfully defended a claim by EMI Music
that allowing users to store music files on a cloud server and
stream them back via an internet browser was a breach of copyright.
MP3Tunes' defence relied on the 'fair use' concept
embedded in US copyright law which, despite numerous calls for this
to be replicated in the Copyright Act, is not currently recognised
in Australian Law.
Similar services have recently been launched in the United
States amid no small amount of controversy. Amazon's Cloud
Player and Cloud Drive applications, which operate in a similar way
to MP3Tunes, have been launched without securing licences from
record companies and their legal position remains untested.
IMPLICATIONS
Copyright law has sometimes been criticised for its inability to
evolve in the face of rapidly changing technologies and changes in
consumer viewing habits. For some, Optus' claim, if successful,
would provide a long overdue clarification of Australian copyright
law in respect of new and emerging digital media.
Success for Optus would throw open the doors to an already
burgeoning market, allowing enterprising Australian companies to
capitalise on the 'time shift' and related 'format
shift' exceptions in the Copyright Act to provide online locker
services for media content.
Broadcasters, copyright owners and event organisers will no
doubt be hoping for a narrower interpretation of the law by the
Federal Court. Already faced with increased competition and
declining revenues, anything that could potentially reduce the fees
payable for broadcast rights over lucrative copyrights such as AFL
and NRL would come as a major blow. In addition to the $1 billion
raised from the sale of the AFL's TV broadcast rights, Telstra
secured mobile and shared internet broadcasting rights for a
further $115 million – given the nature of the TV Now
service, it is set to cause the most upset to online broadcasters
and Telstra will no doubt be reluctant to see any reduction in the
value of this investment.
It would also throw into doubt other highprofile broadcast
rights purchased by TV networks, such as the 2012 Olympic Games
rights obtained by Nine and Foxtel for an estimated cost of $120
million.
In the case of not-for-profit sporting organisations such as the
AFL, a decline in TV revenues will not merely squeeze profit
margins or lower dividends, it will also divert much needed funds
from development and community projects.
This publication is intended as a general overview and
discussion of the subjects dealt with. It is not intended to be,
and should not used as, a substitute for taking legal advice in any
specific situation. DLA Piper Australia will accept no
responsibility for any actions taken or not taken on the basis of
this publication.
DLA Piper Australia is part of DLA Piper, a global law firm,
operating through various separate and distinct legal entities. For
further information, please refer to www.dlapiper.com
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