Australia: A taxing problem of Olympic proportions: no copyright in a digital data signal

Key Points:

The Copyright Act does not cover digitally created streams of data representing the sounds and images of the event which become the broadcasts we watch.

The Federal Court has found that copyright does not exist in a digital data signal (Seven Network Limited v Commissioner of Taxation [2014] FCA 1411). Clayton Utz acted for Seven in the proceedings.

The rights to broadcast the Olympic Games

Seven Network Limited held the exclusive rights to broadcast certain Olympic Games under agreements with the International Olympic Committee (IOC). Pursuant to these agreements Seven was required to make a series of payments to the IOC. The rights acquired by Seven included the right to access and use the ITVR signal created by the Host Broadcaster in each case which was then used to create Channel Seven's broadcast of the Games.

The Commissioner of Taxation contended that payments made for the use of the ITVR signal were "royalties" and therefore attracted royalty withholding tax, as the IOC was a resident of Switzerland for the purposes of the "Agreement between Australia and Switzerland for the Avoidance of Double Taxation with respect to Taxes on Income" (Swiss Treaty).

Seven denied that it was obliged to pay withholding tax in respect of the payments made to access and use the ITVR signal as the payments were not royalty payments as defined by the Swiss Treaty. The Australian Taxation Office (ATO) disagreed with Seven's opinion and issued penalty notices. Seven commenced proceedings in the Federal Court challenging these notices.

Payment or royalties?

Seven sought orders that the penalties be set aside on the basis that the payments for the right to access and use the ITVR signal were not royalties.

"Royalties" were defined by article 12(3) of the Swiss Treaty as

"payments to the extent to which they are consideration for the use of, or the right to use, any copyright, patent, design or model ... or other like property or right".

Critical to this question was whether there was copyright in the ITVR signal used by Seven to create its broadcast.

Is there copyright in the coverage?

Under the Copyright Act 1968 (Cth), copyright relevantly subsists in literary, dramatic, musical and artistic works, sound recordings and cinematograph films.

In these proceedings the ATO did not contend that there was copyright in the ITVR signal itself, but rather that the footage "filmed" by the Host Broadcaster and transmitted via the ITVR signal was a cinematograph film. The ATO further contended that the coverage transmitted to Seven was an aggregate of visual images and sounds which were embodied in the ITVR signal as required by the definition of "cinematograph film" in section 10 of the Copyright Act.

This view was contrary to the expert evidence given by experts for both parties that stated there was no picture, image or sound recorded or permanently stored in the copper cable that transmitted the ITVR signal.

What is an ITVR signal?

In finding for Seven, Justice Bennett considered the technological features of the ITVR signal and noted that it had been agreed by both parties that:

  • An ITVR signal is a stream of data transmitted (usually along copper cables, as was the case in this instance) to some form of receiving device (such as a television).
  • An ITVR signal is not tangible and does not give physical form to an image or sound. No images or sounds are recorded in the cable.
  • Images and sounds can be produced from the signal (by the receiving device) but not reproduced.
  • ITV signals were received live by Seven and conveyed no recorded material.

Was the signal therefore a cinematograph film?

Section 10(1) of the Act defines a cinematograph film as

"the aggregate of the visual images embodied in an article or thing so as to be capable by the use of that article or thing

  1. of being shown as a moving picture; or
  2. of being embodied in another article or thing by the use of which it can be so shown;

and includes the aggregate of the sounds embodied in a soundtrack associated with such visual images".

Contrary to previous cases such as Sega Enterprises Ltd v Galaxy Electronics Pty Ltd (1996) 69 FCR 268, where embodiment was found by virtue of the means employed, Justice Bennett found that the fact that nothing was stored in the signal meant there was no aggregation of images or sounds, just a continuous stream of live data. There was no embodiment of an "aggregate" of visual images.

Embodiment of sounds and images in the signal

Whether the sounds and images being transmitted by the signal were "embodied" was a critical question in the case.

Sounds or images are embodied in an article if they "are capable, with or without the aid of some other device, of being reproduced from the article" (section 24). The signal had no physical or material form, and was not sufficiently permanent or stable to be considered to be embodied. The fact that the data stream was seen on Australian television was held to be a production, not a reproduction as required.

No copyright in the signal, so payments were not subject to royalty withholding tax

Seven was successful on all fronts. Justice Bennett held that:

  • the ITVR signal did not attract copyright protection;
  • the payments were not royalties as defined by the Swiss Treaty;
  • Seven was not liable to withhold tax from the payments made for access to and use of the ITVR signal; and
  • the Penalty Notices should be set aside.

The ATO has appealed the decision and the appeal is expected to be heard in August 2015.

Lessons to be learned

Broadcast rights attached to major sporting events are increasingly important and the fees being paid for those rights are enormous. In the technologically advancing world in which we live it is clear that the Copyright Act does not cover digitally created streams of data representing the sounds and images of the event which become the broadcasts we watch. The decision demonstrates that users and developers of content using digital technology should be careful to check whether they are protected by IP legislation currently in force. Otherwise, rights will have to be protected by contract.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.