Australia: Time shifting on the cloud - New copyright questions in Australia

Last Updated: 8 November 2011
Article by Scott Buchanan and Sarah Birkett

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.

© DLA Piper

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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