Australia: Control Of Sporting Intellectual Property

Originally published in World Sports Law Report, Volume 5, Issue 1, January 2007 - 'Australia: Media lockouts: control of sporting intellectual property', Claude Harran | Dibbs Abbott Stillman | Lawyers http://www.e-comlaw.com/WSLR

Cricket Australia threatened to lock media organisations out of the fourth Ashes Test due to rebroadcasting of moving images from previous Tests over the internet. Claude Harran, a solicitor with Dibbs Abbott Stillman Lawyers, Melbourne, examines how the case highlights that a line needs to be drawn between the ability of sporting organisations to limit coverage of an event, and the right of news organisations to report on them.

Sport is big business. The commercialisation of sport means that predominantly, those investing in sport want the returns on their investment protected, and in this regard, television has for a long time been king. It is their desire for protection and return on investment that encourages those involved to turn to the law for comfort and there are a range of common law principles and legislation that afford protection in a sporting context.

Recently, Cricket Australia threatened to lock out major Australian newspapers for the 4th Ashes Test. Cricket Australia was seeking to protect its ability to provide the successful television network with exclusive broadcasting rights to cricket matches in Australia. The dispute arose out of the ‘online broadcast of moving images on the internet of sporting events’ ¹. It was reported in the Sydney Morning Herald that ‘Cricket Australia believes it owns the intellectual property rights of the game and wants to protect those images and the profit from them for the good of the grassroots of the game’. No lockout eventuated, but the circumstances raise some interesting legal issues. Interestingly, on Boxing Day, it was reported on Cricket Australia’s official website that the Packer Family (which is a major stakeholder in Channel Nine through Publishing & Broadcasting Limited) had set up the Kerry Packer Foundation, which has the purpose of aiming to provide aid to promising players in financial difficulties ². In effect, Cricket Australia has obtained its ‘profit’ for the development of grassroots level cricket. The commercial implication is that Cricket Australia can divert money it would otherwise have allocated to grassroots development to other facets of its operations. The media is claiming that they are being prevented from reporting news and question whether in fact Cricket Australia has intellectual property rights in the game ³. A line needs to be drawn between the ability of sporting organisations, both in Australia and internationally ⁴, to censor or limit coverage of an event and the right of reporters to report news.

Exclusive broadcasting rights

There is no copyright in a sporting spectacle ⁵. Cricket Australia’s claim of ownership of the intellectual property in the game cannot be a claim that Cricket Australia owns the copyright. On this basic analysis, the intellectual property right premise on which Cricket Australia asserts its ability to prevent another broadcaster from running footage of the on-field action during the Ashes, seems questionable.

Cricket Australia possesses control of entry to all cricket matches. Broadcasting exclusivity depends upon the rights held by the event organiser. An event organiser with the right to admit or refuse entry to a sporting event is contractually in a very powerful position. The basis of this exclusivity is contractual in nature. Where a sporting event organiser, in this instance Cricket Australia, controls admission to the spectacle, it allows the organiser to enter into conditional contracts with spectators ⁶. In relation to the media, the organiser is placed in a powerful bargaining position. The organiser will implement an accreditation procedure to ensure that the exclusivity of the broadcast is retained. In order to obtain the requisite accreditation, non-rights holding media organisations are required to agree to onerous and restrictive terms and conditions. The Olympic Games provide a good example of these accreditation requirements ⁷. At the Sydney Olympics, the non-rights holding broadcasters (Network Ten, Channel Nine, Special Broadcasting Service and the Australian Broadcasting Corporation) had to agree to amongst other things, that:

• any Australian Broadcast of any Olympic material would acknowledge Seven as the official broadcaster.

• any Olympic footage was not to be used in more than three programs a day and was not permitted to exceed more than two minutes per programme; and

• the non-rights broadcasters would not broadcast more than 1/3 or more than 30 seconds of a particular Olympic event ⁸.

The non-rights holding broadcasters therefore either accept the unilaterally imposed terms and conditions of accreditation, or they are not permitted access to the sporting event. Cricket Australia, by threatening to lock out major newspapers, relies upon its power to control accreditation and not upon any intellectual property law rights. Threats of this nature by sporting organisations are not idle threats ⁹.

Exclusivity from the actual broadcast

Television’s day as king of the sports marketing arena are numbered, given the emerging technology of the internet and mobile phone networks ¹⁰. New technologies create new revenue sources for copyright owners by allowing protected material to be sold, licensed and distributed in ways not previously possible. The dispute between Cricket Australia and the media clearly illustrates this, as the dispute has revolved around broadcasting of sporting events over the internet. Of interest is the fact that Channel Nine is the original broadcast rights holder and therefore, unless specified in a contract to the contrary, Channel Nine is the copyright owner of the broadcast. If nothing exists to the contrary, why is it that Cricket Australia is seeking to assert Channel Nine’s copyright?

Copyright in a television broadcast

In Australia, copyright subsists in subject matter, only as a result of the recognised categories contained in the Copyright Act 1968 (Cth) (‘the Act’). Under the Act, copyright is the exclusive right afforded to the owner to do, or authorise others to do, a number of specific acts in relation to works and other subject matter ¹¹. Essentially, copyright is the right to prevent copying.

Section 87 is responsible for conferring copyright in a television broadcast. Section 91 of the Act establishes geographic and licensing requirements for television broadcasts and sound broadcasts in which copyright is capable of existing. Section 99 determines ownership of the copyright in the television broadcast. Without a contractual agreement assigning its broadcasting copyright of the coverage of the Ashes, Channel Nine remains the copyright owner. Section 101 deals with the infringement of an owner’s copyright in a broadcast. Where a person, not the owner and not authorised by the owner to deal with the copyright, makes an unauthorised use of the copyright work, the person will have infringed the owner’s copyright in that work. An owner’s right in a copyright work is subject to the establishment of copyright in the subject matter and the exceptions contained in the Act.

Substantiality and the Fair Dealing Provisions

Copyright law promotes creativity and innovation. Copyright seeks to provide a fair balance between the rights bestowed on the copyright owner and the rights of those making use of the copyright protected work. As a result, not everyone who copies a work infringes copyright. Of particular relevance to these circumstances are the principles of copying a substantial part of the fair dealing provisions of the Act.

Substantial part

Section 14 of the Act establishes that a lesser degree of exploitation is capable of constituting an infringement by reference to a copying of a ‘substantial’ part. Once it has been established that the exclusive rights of the copyright owner have been infringed, it is then necessary to determine whether the act has been done in relation to a substantial part of the copyright work, or other subject matter involved. It is therefore important to note that;

"… the requirement that an infringer who takes less than the whole of the protected subject matter must take at least a substantial part thereof plays a well-established and central part in copyright law. Questions of quality (which could include the potency of particular images or sounds, or both, in broadcast) as well as quantity…" ¹²

Thus, when determining what will amount to a substantial part, it is necessary to take into account the quality of the part taken, as opposed to its quantity ¹³ and the importance the part taken bears in relation to the work as a whole ¹⁴.

"In some cases, the issue can be resolved by an aural or visual comparison of the copyright work with the allegedly infringing copy of what is said to be a substantial part. In other cases, his Honour said, the inquiry may turn on the economic significance of the part taken, the fairness or unfairness of the use by the alleged infringer and the extent to which that use has the capacity to reduce the value of the copyright work." ¹⁵

Drawing a clear line between quantity and quality is a difficult exercise. The Cricket Australia-media dispute supports this assertion. In a full day’s cricket, a broadcaster may get around 10 hours of cricket broadcasting. Quantitatively, the creation of an 82 second report of the day’s events, recording the fall of wickets, is arguably de minimis and therefore insubstantial.

Qualitatively, if one considers the importance of the footage copied and the re-broadcast, then the online ‘news’ reports had taken the best segments of the day’s play, and therefore a substantial part had been copied. In British Broadcasting Corp v British Satellite Broadcasting Ltd [1991] 3 All ER 833 at 844, Justice Scott states; ‘…But to show the goal-scoring sequence when reporting on the result of a football match is such a normal and obvious means of illustrating the news report…’

Likewise, broadcasting a package which shows the fall of wickets in the Ashes is a normal and obvious means of illustrating the sports news report, and one which take on greater significance given the length of a days play in test cricket. A further consideration is the fact that the re-broadcast can only quantitatively be found to be of a considerable time and therefore a substantial part, as a result of the cumulative banding together of the fall of wickets. Each fall of a wicket, if reported individually, would be an insubstantial copying.

The Federal Court has refused to grant an interlocutory injunction against a horse racing broadcasting network as a result of the network’s use of parts of the original broadcasts form the network holding the exclusive broadcasting rights to the horse racing. Justice Ryan held that, although there was a serious issue to be tried, there was a serious possibility on the evidence that the alleged infringer might succeed on arguments raised that it had not taken a substantial part of the broadcasts, or that its use of them was a fair dealing for the purpose of reporting news ¹⁶.

Even where a court is prepared to decide that a substantial part has been copied, the infringer may still rely upon the fair dealing defence.

Fair dealing for the purpose of reporting the news

The fair dealing provisions relating to copyright in a broadcast in relation to reporting of news, are contained in section 103B of the Act. In the circumstances, the media will have to show that their online highlights package was for the purposes of reporting news and that the use of the copied material for this purpose was fair. News is not restricted to current events and the coverage of a sporting event can be considered news ¹⁷. The concept of fair dealing provision for the purpose of reporting news has not been judicially determined in Australia. Fair dealing involves similar qualitative and quantitative considerations as when determining whether a substantial part has been copied. Considering qualitative and quantitative aspects, in conjunction with other additional criteria, results in these aspects playing a larger role for the purposes of determining whether the fair dealing defence is available to the infringer. It may be that something categorised as a substantial part is what makes it in essence newsworthy ¹⁸. If it is assumed that a court determines that the re-broadcast of the fall of wickets in the day’s play is the copy of a substantial part, then qualitatively, the re-broadcast of those events may more likely be considered as newsworthy.

The United Kingdom case of British Broadcasting Corp v British Satellite Broadcasting Ltd [1991] 3 All ER 833 is on point. It was there determined that the Defendant’s use of live broadcasts of World Cup Soccer matches to show highlights contained in its sports news programme amounted to fair dealing for the purpose of reporting current events. It was further held that the fair dealing provisions of the United Kingdom Copyright, Designs and Patents Act 1988 was not limited to the reporting of current events in a general news programme, but extended to the reporting of current events in sport in a sports news bulletin. The court had regard to both the quantity and quality of the material used in determining that it was news. A similar approach can be applied in Australia and in considering the qualitative and quantitative aspects of the re-broadcast, the nature of the content ought to be considered. Where the content is consistent with the nature of a news report, then it is open to the court to find the report to be a news report ¹⁹.

Whether something is fair will be required to be determined on a case-by-case basis. In considering the fairness of the re-broadcast of the Ashes action over the internet, industry standards provide a benchmark for what may amount to a fair use of the copyright work. The International Olympics Committee has a two minute duration threshold and there is an established industry practice in Australia that where a network holds the exclusive broadcasting rights in a sporting event, the non-rights holders are permitted to broadcast three minutes of footage, three times a day, without incurring any licensing costs. The media organisations want to run three minutes of internet footage of the highlights of the day’s play. Cricket Australia wants to limit the duration of any broadcast to 40 seconds and the broadcast must not be shown an hour before play and is required to be removed within 24 hours ²⁰. As a compromise, a fair use of the footage would be the IOC’s two-minute threshold. Given the industry standards, it is difficult to see how the use of the footage can be considered unfair.

Conclusion

Cricket Australia has effectively ensured that it is able to bolster its profit indirectly. This profit boost is indirect because it is only through the establishment of the Kerry Packer Foundation that Cricket Australia will be able to diver funds, otherwise destined to grassroots development, to other facets of its operations.

Furthermore, it is indirect because Cricket Australia claims to rely upon infringement of their intellectual property rights in the game for threatening the lockout of the media. Channel Nine is the original copyright owner of the broadcast, which is used as re-broadcast footage in reporting on the day’s Ashes events. Cricket Australia’s position is therefore related to the rights owned by Channel Nine and any benefit obtained by Cricket Australia is obtained indirectly. Even in circumstances where Cricket Australia is able to assert copyright over the material being broadcast, Cricket Australia has to prove that a substantial part was copied. In this regards, it may be that the court will determine that because the internet broadcasts focus on the best segments of the day’s play, that it amounts to a copying of a substantial part. The better approach is that taken in the United Kingdom, where the court has determined that it is impossible to report on a sporting event without taking the best segments. A greater emphasis was placed on the context of the copying of the work. If an Australian court decides to apply a strict approach to taking a substantial part in these circumstances, then the media organisations can still rely upon the defence of fair dealing. The concept of fair dealing for the purposes of reporting news remains to be judicially determined in Australia, but the realistic approach of the United Kingdom adopted in British Broadcasting Corp v British Satellite Broadcasting Ltd [1991] 3 All ER 833 ought to be applied. If current television industry standards for re-broadcasts are applied, then the footage broadcast over the internet by the media organisations ought not to be regarded as an infringement under the fair dealing provisions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.