Optus (NSD 1430l of 2011) (Draft Judgt as at 11 Jan 2012)

8/3/2019 Optus (NSD 1430l of 2011) (Draft Judgt as at 11 Jan 2012)

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FEDERAL COURT OF AUSTRALIA

Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2)

[2012] FCA 34

Citation: Singtel Optus Pty Ltd v National Rugby LeagueInvestments Pty Ltd (No 2) [2012] FCA 34

Parties: SINGTEL OPTUS PTY LTD (ACN 052 833 208) andOPTUS MOBILE PTY LTD (ACN 054 365 696) v

NATIONAL RUGBY LEAGUE INVESTMENTS PTY

LIMITED (ACN 081 778 538), AUSTRALIAN RUGBY

FOOTBALL LEAGUE LIMITED (ACN 003 107 293),

AUSTRALIAN FOOTBALL LEAGUE (ACN004 155 211) and TELSTRA CORPORATION

LIMITED (ACN 051 775 556)

File number: NSD 1430 of 2011

Judge: RARES J

Date of judgment: 1 February 2012

Catchwords: COPYRIGHT infringement internet and mobiletelephony service providing user with ability to record freeto air television broadcast and play on users PC, mobiletelephone or other compatible device whether service

provider or user made cinematographic film of broadcastwhen user clicked record button for the purposes of ss86(a), 87(a), (b) and 111 of the Copyright Act 1968 (Cth) whether making of recordings in each of the 4 formats used

by any device compatible with service infringed copyrightin broadcast

COPYRIGHT infringement whether user maderecording solely for private and domestic use by watchingat a more convenient time than when the broadcast wasmade within the meaning of s 111 of the Copyright Act1968 (Cth) whether s 111 applies where recordingcapable of being viewed from approximately 2 minutesafter commencement of broadcast on certain compatibledevices whether, when user viewed a recording madeusing the service, the streaming of the recording to his orher compatible device was a communication to the publicwithin the meaning of the Copyright Act 1968 (Cth)

whether digital file of recording is article or article or


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thing within meaning of ss 103 or 111(3)(d) ofCopyrightAct 1968 (Cth)

Held: the service provider did not infringe copyright in thebroadcasts by providing service to its users to make and

play recordings

Legislation: Acts Interpretation Act 1901 (Cth) s 23(b)Copyright Act 1966(Cth) (Cth) ss 10(1), 21, 22, 24, 85,86, 87, 90, 91, 98, 99, 101, 103, 109A, 111, 202Copyright Amendment Act 2006(Cth)Copyright, Designs and Patents Act 1988 (UK) s 20(2)

Laddie, Prescott & Vitoria, The Modern Law of Copyrightand Designs (Vol 1, 4th ed, LexisNexis, 2011)

Cases cited: Arista Records LLC v Myxer Inc (C.D. Ca unreported1 April 2011; 2011 US Dist LEXIS 109668) not followed

Australian Securities and Investments Commission v DB

Management Pty Ltd(2000) 199 CLR 321 citedAustralian Tape Manufacturers Association Ltd vCommonwealth (1993) 176 CLR 480 followedCartoon Network LP, LLLP v CSC Holdings Inc 536 F 3d121 (2008) followedCBS Songs Ltd v Amstrad Consumer Electronics Plc[1988] AC 1013 followed

ITV Broadcasting Ltd v TV Catchup Ltd (No 2) [2011] FSR40 distinguished

Network Ten Pty Ltd v TCN Channel Nine Pty Ltd(2004)218 CLR 273 followed

Record TV Pte Ltd v MediaCorp TV Singapore Pte Ltd[2011] 1 SLR 830 followed

Roadshow Films Pty Ltd v iiNet Ltd(2011) 194 FCR 285consideredStevens v Kabushiki Kaisha Sony Computer Entertainment(2005) 224 CLR 193 citedTelstra Corporation Ltd v Australasian Performing Right

Association Ltd(1997) 191 CLR 140 consideredTwentieth Century Fox Film Corporation v CablevisionSystems Corporation 478 F Supp 2d 607 (2007 SD NY)not followedUniversity of New South Wales v Moorhouse (1975) 133CLR 1 followed

Date of hearing: 19 and 20 December 2011

Place: Sydney

Division: GENERAL DIVISION


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Category: Catchwords

Number of paragraphs: 115

Counsel for the Applicants: Mr R Cobden SC with Mr J M Hennessy SC

Solicitor for the Applicants: Baker & McKenzie

Counsel for the First andSecond Respondents:

Mr N C Hutley SC with Mr N R Murray

Solicitor for the First andSecond Respondents:

Kennedys Lawyers

Counsel for the ThirdRespondent and Telstra

Corporation Limited:

Mr D K Catterns QC with Mr P W Flynn

Solicitor for the ThirdRespondent and TelstraCorporation Limited:

Mallesons Stephen Jaques


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IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION NSD 1430 OF 2011

BETWEEN: SINGTEL OPTUS PTY LTD (ACN 052 833 208)First Applicant and Cross-Respondent

OPTUS MOBILE PTY LTD (ACN 054 365 696)

Second Applicant and Cross-Respondent

AND: NATIONAL RUGBY LEAGUE INVESTMENTS PTY

LIMITED (ACN 081 778 538)

JUDGE: RARES J

DATE: 1 FEBRUARY 2012

PLACE: SYDNEY

REASONS FOR JUDGMENT

1 The operators of two of Australias popular football codes, the Australian Football

League (AFL), the third respondent, and the National Rugby League partnership (between

the first and second respondents) (NRL) own the copyright in broadcasts on free to air

television of games played between teams in their respective competitions. Telstra

Corporation Ltd is the AFLs exclusive licensee of broadcasts of the footage of AFL games

in respect of communicating them to the public on, or via, the internet and mobile telephony

enabled devices. Telstra also has a similar licence from the NRL.

2 In mid July 2011, Singtel Optus Pty Ltd and its subsidiary, Optus Mobile Pty Ltd,

began a new service called TV Now. I will refer to both companies simply as Optus, as

did the parties. The TV Now service offers Optus private and small to medium businesscustomers in Sydney, Melbourne, Brisbane, Adelaide and Perth the ability to record free to

air television programs, including AFL and NRL games and play them back on any one or

more of the following four types of device (compatible devices) operated by a user of the

service (user), namely:

a personal computer operating on Microsoft Windows or an Apple

system including iPads or tablets (collectively a PC), by accessing TV Now


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through a web browser, such as Internet Explorer, at the TV Now website

using specified URLs (the TV Now website);

iPhone or iPad devices using Apples iOS TV & Video App that could

be downloaded from Apples AppStore (an Apple device);

Android mobile devices, including a tablet, using the Android TV &

Video App that could be downloaded from Googles Android Market Place or

the Optus Application Store (an Android device) ;

most 3G mobile devices, including Android devices, but not Apple

devices (a 3G device) using that devices web browser application to access

the TV Now websites using specified URLs (the TV Now 3G website).

3 The user of the TV Now service could select a program to record from an electronic

program guide that would appear on any one of those four kinds of device. Unknown to the

user, Optus technology then caused a set of four unique recordings to be made of the

program its user had selected, for the sole use of that person. Each of those four recordings in

the set was in one of the four respective formats necessary to enable the user to view the

recorded program on any one of the four kinds of device supported by the TV Now service.

If several users selected the same program to record, the TV Now service made separate,

unique sets of four copies (one in each format) for each of those users.

4 The facts and issues are largely agreed because of the commendably sensible

approach that the parties have taken in bringing these complex questions to trial quickly. The

resolution of the controversy will depend on the construction of a number of provisions of the

Copyright Act 1966(Cth) and their application to the facts.

5 The central issue in these proceedings is whether Optus, through the operation of its

TV Now service, infringed the copyright interests of the AFL, NRL and Telstra (the

rightholders) in the free to air broadcasts of some live and filmed AFL and NRL games

played in September 2011. The rightholders alleged that Optus made cinematograph films

within the meaning of the Act, being infringing copies, of those broadcasts and later

communicated those films to users of the service. The users had utilised the TV Now service

to record and later play the films on their compatible devices. Optus contended that the users,


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rather than it, had made the films or copies and played them without any infringement of

copyright because of the exception for private and domestic recording in s 111 of the Act.

6 The parties agreed that there were seven issues for determination. I will set these out

later, but it suffices to say that they focus on whether and how Optus, or the user, made, or

later viewed, cinematograph films or copies of the broadcasts. I will first identify the

principal relevant provisions of the Act, then set out the facts and then the issues.

THE STATUTORY CONTEXT

7 The key provision of the Act that is engaged in these proceedings is s 111 which

provides:

111 Recording broadcasts for replaying at more convenient time

(1) This section applies if a person makes a cinematograph film or soundrecording of a broadcast solely for private and domestic use bywatching or listening to the material broadcast at a time more

convenient than the time when the broadcast is made.

Note: Subsection 10(1) defines broadcast as a communication to the publicdelivered by a broadcasting service within the meaning of the BroadcastingServices Act 1992.

Making the film or recording does not infringe copyright

(2) The making of the film or recording does not infringe copyrightin the broadcast or in any work or other subject-matter included inthe broadcast.

Note: Even though the making of the film or recording does not infringethat copyright, that copyright may be infringed if a copy of the film orrecording is made.

Dealing with embodiment of film or recording

(3) Subsection (2) is taken never to have applied if an article or thingembodying the film or recording is:

(a) sold; or (b) let for hire; or (c) by way of trade offered or exposed for sale or hire; or(d) distributed for the purpose of trade or otherwise; or(e) used for causing the film or recording to be seen or heard in

public; or(f) used for broadcasting the film or recording.

Note: If the article or thing embodying the film or recording is dealt with asdescribed in subsection (3), then copyright may be infringed not only by the


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making of the article or thing but also by the dealing with the article or thing.

(4) To avoid doubt, paragraph (3)(d) does not apply to a loan of thearticle or thing by the lender to a member of the lenders family orhousehold for the members private and domestic use. (boldemphasis added)

8 Importantly, the earlier version of that section had been repealed and the current s 111

enacted by the Copyright Amendment Act 2006 (Cth) along with a number of other

provisions. Those included the definition in s 10(1) of private and domestic use which,

unless the contrary intention appears, means private and domestic use on or off domestic

premises. Relevantly, s 10(1) also contains the following definitions that apply unless the

contrary intention appears:

cinematograph film means the aggregate of the visual images embodied in an articleor thing so as to be capable by the use of that article or thing:

(a) of being shown as a moving picture; or

(b) of being embodied in another article or thing by the use of which it can be soshown;

and includes the aggregate of the sounds embodied in a sound-track associated with

such visual images.

communicate means make available online or electronically transmit (whether over apath, or a combination of paths, provided by a material substance or otherwise) awork or other subject-matter, including a performance or live performance within themeaning of this Act.

copy, in relation to a cinematograph film, means any article or thing in which thevisual images or sounds comprising the film are embodied.

infringing copy means:

(b) in relation to a sound recordinga copy of the sound recording not being asound-track associated with visual images forming part of a cinematograph

film;

(c) in relation to a cinematograph filma copy of the film;

(d) in relation to a television broadcast or a sound broadcasta copy of acinematograph film of the broadcast or a record embodying a soundrecording of the broadcast; and

(e)

being an article (which may be an electronic reproduction or copy of the work,


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recording, film, broadcast or edition) the making of which constituted aninfringement of the copyright in the work, recording, film, broadcast or edition

sound recordingmeans the aggregate of the sounds embodied in a record.

television broadcast means visual images broadcast by way of television, togetherwith any sounds broadcast for reception along with those images.

9 Next, s 22 deals with the making of literary, dramatic, musical and artistic works,

sound recordings, including of live performances and, pertinently provides:

22 Cinematograph films

(4) For the purposes of this Act:

(a) a reference to the making of a cinematograph film shall be read asa reference to the doing of the things necessary for the productionof the first copy of the film; and

(b) the maker of the cinematograph film is the person by whom thearrangements necessary for the making of the film wereundertaken.

Broadcasts and other communications

(5) For the purposes of this Act, a broadcast is taken to have been made by

the person who provided the broadcasting service by which thebroadcast was delivered

(6) For the purposes of this Act, a communication other than a broadcastis taken to have been made by the person responsible for

determining the content of the communication.

(6A) To avoid doubt, for the purposes of subsection (6), a person is notresponsible for determining the content of a communication merely

because the person takes one or more steps for the purpose of:

(a) gaining access to what is made available online by someone else

in the communication; or

(b) receiving the electronic transmission of which thecommunication consists.

Example: A person is not responsible for determining the content ofthe communication to the person of a web page merely because the

person clicks on a link to gain access to the page. (emphasis added)

10 Part IV of the Act (comprising ss 84-113C) makes specific provisions for copyright in

subject matter other than literary, dramatic, musical and artistic works. In addition to s 111,Pt IV relevantly provides:


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85 Nature of copyright in sound recordings

(1) For the purposes of this Act, unless the contrary intention appears,copyright, in relation to a sound recording, is the exclusive right todo all or any of the following acts:

(a) to make a copy of the sound recording;

(b) to cause the recording to be heard in public;

(c) to communicate the recording to the public;

(d) to enter into a commercial rental arrangement in respect of therecording.

86 Nature of copyright in cinematograph films

For the purposes of this Act, unless the contrary intention appears, copyright,in relation to a cinematograph film, is the exclusive right to do all or any ofthe following acts:

(a) to make a copy of the film;

(b) to cause the film, in so far as it consists of visual images, to be seenin public, or, in so far as it consists of sounds, to be heard in public;

(c) to communicate the film to the public.

87 Nature of copyright in television broadcasts and sound broadcasts

For the purposes of this Act, unless the contrary intention appears, copyright,in relation to a television broadcast or sound broadcast, is the exclusive right:

(a) in the case of a television broadcast in so far as it consists of visualimagesto make a cinematograph film of the broadcast, or a copy ofsuch a film;

(b) in the case of a sound broadcast, or of a television broadcast in so faras it consists of soundsto make a sound recording of the broadcast,or a copy of such a sound recording; and

(c) in the case of a television broadcast or of a sound broadcasttore- broadcast it or communicate it to the public otherwise than by

broadcasting it.

90 Cinematograph films in which copyright subsists

(1) Subject to this Act, copyright subsists in a cinematograph film ofwhich the maker was a qualified person for the whole or a substantial

part of the period during which the film was made.

(2) Without prejudice to the last preceding subsection, copyrightsubsists, subject to this Act, in a cinematograph film if the film was


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made in Australia.

91 Television broadcasts and sound broadcasts in which copyright subsists

Subject to this Act, copyright subsists in a television broadcast or soundbroadcast made from a place in Australia:

(a) under the authority of a licence or a class licence under theBroadcasting Services Act 1992; or

(b) by the Australian Broadcasting Corporation or the SpecialBroadcasting Service Corporation.

101 Infringement by doing acts comprised in copyright

(1) Subject to this Act, a copyright subsisting by virtue of this Part isinfringed by a person who, not being the owner of the copyright, andwithout the licence of the owner of the copyright, does in Australia,or authorizes the doing in Australia of, any act comprised in thecopyright.

103 Infringement by sale and other dealings

(1) Subject to sections 112A, 112C, 112D and 112DA, a copyrightsubsisting by virtue of this Part is infringed by a person who, in

Australia, and without the licence of the owner of the copyright:

(a) sells, lets for hire, or by way of trade offers or exposes forsale or hire, an article; or

(b) by way of trade exhibits an article in public;

if the person knew, or ought reasonably to have known, that themaking of the article constituted an infringement of the copyright.

.

(3) In this section:

article includes a reproduction or copy of a work or othersubject-matter, being a reproduction or copy in electronic form.

11 Finally, s 202 enables a person threatened with proceedings for breach of copyright to

sue the person making the threats and the latter to counterclaim, in order to determine

whether an infringement of copyright occurred to which the threats related.


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Sydney, Melbourne, Brisbane, Adelaide and Perth and then only for those

channels in that users home address broadcast region;

he or she can both schedule and watch recordings using a mobile or

computer;

he or she can delete, re-record and watch as many times as desired;

Optus stores the recorded shows in the cloud instead of on your

phones or computer;

recordings expire after 30 days.

HOW THE USER CHOOSES TO RECORD A PROGRAM

18 Once signed up for the TV Now service, a user logs in and is directed to the electronic

program guide. He or she navigates that guide to look for and select the program to be

recorded. The user cannot use the TV Now service when in another capital city to record any

broadcasts that are not made in his or her home address broadcast region. A user is only able

to change his or her home address details once every two months. The TV Now service can

only record a program that a user wishes to record if the broadcast of the program has not yet

commenced. Thus, a user cannot begin any recording once a program has commenced beingput to air. The program guide appears on the screen of a PC as follows:


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19 A user who has an Apple or Android device must download the appropriate TV &

Video App or application suitable for that device in order to use the TV Now service. He or

she then navigates to the equivalent screen to that above for a mobile device, an example of

which is shown below:


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20 The TV Now service calculates when a recording will begin using a clock in one of

the two MACF (media application control framework) servers that control the system. These

are programmed to commence recording 2 minutes before, and cease 10 minutes after, the

scheduled broadcast times so as to allow for variations in the television stations schedules.

21 In essence, from the users point of view, the TV Now system is simplicity itself.

After logging in, he or she looks at the electronic program guide, decides what he or she

wants to record and clicks the record button. Next, a pop up box appears on the screen

displaying further information about the chosen program. This box invites the user to click

on the Record button it displays to confirm that he or she wishes to record the program.

That is the last the user does from then until he or she wants to play the recording. Users of

the TV Now service can cancel a scheduled recording by clicking on an appropriate button.

They can also change their TV Now service plan if they choose.

22 I will describe the complex system that the TV Now service uses to make and

transmit recordings later in these reasons. However, from the users perspective, his or her

involvement is similar to programming a recording device connected to a home television to

record a program in advance and then playing it later at his or her leisure; indeed, the TV


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Now system is apparently easier for a user to employ than some of the technologies available

to record programs that can be viewed on the users own equipment, such as a DVD recorder,

DVR (digital video recorder) or VCR (video cassette recorder).

HOW THE USER WATCHES A RECORDED PROGRAM

23 When the user wants to watch a recorded program, he or she can do so on any of the

four kinds of compatible device supported by the TV Now service. Once the user logs into

the service and seeks to view a recording, the TV Now system detects the particular kind of

device the user is then utilising and transmits a stream of data in the form suitable for that

device from one of the four recordings of the program held in Optus datacentre. If the user

subsequently wants to watch some or all of the same recording on another compatible device,the TV Now system will stream data to that device from another of those four recordings that

is appropriate for the device.

24 If the user wishes to watch a recorded program using a PC, he or she logs into the TV

Now website and is presented with the My Shows web page. That brings up the Recorded

Shows tab. It lists the programs or shows that have been recorded and remain available (i.e.

within 30 days of the original broadcast) with play and delete buttons next to them. If

the user clicks play, a web page appears with a video player that the user can control to

watch, pause, advance or rewind the recording as he or she wishes.

25 If the user wishes to watch a recorded program using a 3G device, he or she must use

it to access the TV Now 3G website, and click on the My Shows button. He or she will see

the Recorded tab. By clicking on that, a menu of all recorded programs (less than 30 days

old) appears. The user then selects the desired program and a screen appears with

information about it together with a Watch now on your Mobile button. If the user clicks

on that, a mobile video screen appears and he or she can watch, pause, advance, rewind or

delete the recording.

26 A similar process applies for Android devices and, with one important difference, for

Apple devices. Both of these types of device use a TV & Video App and operate in much the

same way as a 3G device. However, the Apple devices allow a user to view a recording of a

television program within about 2 minutes from the commencement of the free to airbroadcast of that program. That is, the Apple devices can be used to see a program such as


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an AFL or NRL game selected for recording on the TV Now service almost live. All of the

other devices can only access recordings of programs made by the TV Now service after the

whole program has finished being broadcast.

HOW OPTUS PROVIDES THE TV NOW SERVICE AT THE TECHNICAL LEVEL

27 Optus expert witness, Rodney McKemmish, gave a precise technical description of

Optus infrastructure system and its components in his detailed report. It is not necessary to

descend too far into that detail in order to describe the essential features of this infrastructure

that are relevant.

28 Australia uses a format known as DVB-T (digital video broadcasting - terrestrial) for

its digital free to air television broadcasts. These broadcasts are made using an audio visual

compression computer format known as MPEG-2 (motion picture experts group). This

format is used to send a stream of digitised data that reception equipment, such as television

sets or set top boxes, can convert or process into what the viewer sees as a television program

at, or nearly at, the same time as the data is received by the device. The data in a DVB-T

signal are split into several streams using a number of frequencies in a particular range for

that signal.

29 Optus has established TV antennae and three DVB-T receivers in each of the five

capital cities in which it offers the TV Now service. The antennae receive the total of 15

digital signals broadcast in the MPEG-2 format by each free to air channel in each city. The

antennae are connected by coaxial cable to the DVB-T receivers.

30 Each of the three DVB-T receivers is configured so that, between them, they will

receive signals from the 15 free to air channels in each city. The receivers then convert the

radio frequency DVB-T signal to a packet-based stream of data, also in MPEG-2 format, and

transmit that stream of data to the transcode servers. Each of those transcode servers has

significant RAM (random access memory) and hard drive memory capacity. Those servers

run a program known as transcoding. This digitally converts the MPEG-2 signal into four

specifications that are designed so that the program can be played back on the different types

of users devices that support the TV Now service. These data streams are called output

profiles. The transcoders convert the MPEG-2 signal into seven different data streams.One combined audio and video stream is for data in the QuickTime HTTP Live Streaming


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proprietary format used by Apple devices (QuickTime Streaming). The way in which

QuickTime Streaming operates could give rise to a discrete issue that may need to be decided

later. I will explain this at the end of these reasons (see: Conclusion at [114]-[115]). The

remaining six streams comprise three sets of an audio and a separate visual stream of data.

Each set is in particular formats suitable for playback on one of the other three types of

device capable of using the TV Now service.

31 Optus keeps a significant number of servers in its datacentre in Sydney. All the

output profiles from Melbourne, Brisbane, Adelaide and Perth are sent as streams of data to

the Sydney datacentre, as are the output profiles that are converted by the Sydney

transcoders. The datacentre has the following equipment:

two MACF servers that control the TV Now service;

routers that direct data from the network of computers in each of

Brisbane, Melbourne, Perth and Adelaide (each known as a local area network

(LAN)), to the LAN in Sydney, via avirtual private LAN;

recording controllers or servers;

a QuickTime Streaming server;

a flash streaming server;

a network attached storage (NAS) computer that is connected to and

manages a large number of hard drives. The recording controllers and

QuickTime Streaming server are connected and write data to the NAS;

an electronic program guide engine;

a user database.

HOW THE DATACENTRE CARRIES OUT A USERS INSTRUCTION TO RECORD

A PROGRAM

32 The MACF servers display the electronic program guide for the TV Now service

available in the five capital cities. When a user clicks on the record button for a program in

the guide, that instruction is sent to the MACF servers which, in turn, enter this data in the

user database. The MACF server enters or creates a schedule ID in respect of the program

selected and the users unique identifying number (user ID). Every time a user instructs the


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TV Now service to record a program the MACF server generates both a new schedule ID for

that users individual instruction and the user ID is entered against the schedule ID for each

request.

33 The recording controllers ask or poll the user database once a minute enquiring

whether any users have scheduled the recording of any programs due to be broadcast at the

time of polling. If a user has instructed that a recording be made, the MACF server informs

the recording controllers which then causes four recordings to be made on the NAS, one in

each of the four output profiles for the user who gave that instruction. The recording

controller notifies the MACF server, once a recording has begun, that the television program

in relation to each particular schedule ID is being recorded. Thus, the user database contains

the instructions of each user of the TV Now service to record a program for that user when it

is later broadcast.

34 The MACF server then allocates an individual recording ID to each such recording

and makes an entry in the user database linking the particular recording ID to the user ID

associated with the instruction to make that recording. Thus, the MACF server is able to

ascertain which particular recording was made for, and on the instruction of, which particular

user. The MACF server will display information to the user about the recordings made for

him or her or when the user next accesses the TV Now service. On the other hand, if no user

has instructed that a program be recorded, no recording occurs (other than for no more than

60 seconds before deletion in the case of the Apple QuickTime Streaming server. The

consequence of this exception is an issue that was separated from the issues that I am now

determining.).

HOW THE DATACENTRE RESPONDS TO A USERS PLAY INSTRUCTION

35 The following occurs when a user decides to play a program he or she caused the TV

Now service to record during the 30 day period before it is automatically deleted. The user

clicks the play button for the desired program displayed in a list of recorded programs on

the device he or she is using. This causes the MACF server to look up the recording ID

associated with that users ID in the user database. The equipment recognises the type of

device that the user is then operating. It then causes the relevant streaming server to send to

the device the compatible version of the output profile that is stored with the recording ID

associated with the relevant user ID. There are two types of streaming servers; flash


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streaming servers that work with PCs and Macs and RTSP/iPhone streaming servers that

work with iPhones and 3G mobile devices.

36 The flash streaming server instructs the storage server in the NAS to provide an IP

stream of the recording in the required one of the four output profiles. The recording

controller causes the NAS to transmit to the flash streaming server a stream of IP packets in

that output profile. The flash streaming server sends this streamed playback data via the

users internet connection to the IP address of the device the user is employing. The user sees

the recording as it is streamed into, and processed by, his or her device. No data is stored in

any permanent form in this process. The user then views, and controls his or her viewing of,

the streamed program on that device.

37 Similarly, if the RTSP/iPhone streaming servers receive such an instruction, the flash

streaming server responds by instructing the NAS to provide an IP stream of the recording in

the output profile format connected to the recording ID for that user that is best suited to the

users device making the play request. That streamed data is sent to the users devices IP

address via an internet connection without storing data in any permanent form. However, if

the appropriate output profile uses QuickTime Streaming, it is transmitted in 10 second

segments. The users device interprets the data sent in these streams and displays the

program on the device. The device does not store a copy of the program in a permanent

form. Rather, the program data is displayed by the device almost immediately it is received

as data and not retained by it.

38 If the user presses the rewind, pause or advance buttons, the device sends the

instruction back to the datacentre where it is processed and given effect by the streaming

server. The user can log into the TV Now service on any compatible device any time duringthe 30 days following the broadcast and continue, or repeat, viewing it on that or another such

device. The Optus equipment will use the same process with any necessary adaption to suit

whatever compatible device is employed by the user.

39 If the user is using a PC, 3G device or Android device to access the TV Now service a

recording will not appear there as available for viewing until the broadcast of the program has

been completed and the recording has finished. However, if the user employs an Apple iOS

device to access the TV Now service, the recording will appear as available for viewing


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approximately two minutes after the broadcast commenced. Thus, a user with an Apple iOS

device will be able to play the recording in near real time i.e. within about two minutes of

the scheduled start of the broadcast and watch the program continuously to its end.

Nonetheless, the recording controllers will have caused four different copies, one in each of

the four formats supported by the TV Now service, of the one program to be recorded for

each recording ID.

AGREED FACTS

40 The parties agreed on the following facts:

(1) Channel Seven and Channel Ten companies operating in Sydney,

Melbourne, Brisbane, Adelaide and Perth:

made cinematograph films and sound recordings of AFL

matches in Australia (AFL films), each of which was a cinematograph

film within the meaning of the Act; and

made television broadcasts of AFL matches on free to air

television using the AFL films (AFL broadcasts), each of which was

a television broadcast within the meaning of the Act.

(2) Copyright subsisted in each of the AFL broadcasts and AFL films.

(3) The AFL owned the copyright in each of the AFL broadcasts and AFL

films.

(4) Telstra was the exclusive licensee of the copyright in the AFL

broadcasts and AFL films in Australia for the internet and mobile telephony

and it exploited that copyright by providing access to AFL broadcasts and

AFL films to its subscribers of those services.

(5) Nine Network Australia Pty Ltd (Channel 9):

made cinematograph films and sound recordings of NRL

matches in Australia (NRL films), each of which was a cinematographfilm within the meaning of the Act; and


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made television broadcasts of NRL matches using NRL films

(NRL broadcasts), each of which was a television broadcast within

the meaning of the Act.

(6) Copyright subsisted in each of the NRL broadcasts and the NRL films.

(7) The NRL owned the copyright in the broadcasts, cinematograph films

and sound recordings of NRL matches made by Channel 9 (collectively NRL

footage).

(8) Telstra was the exclusive licensee of the copyright in the NRL footage

in Australia for the internet and mobile telephony and it exploited thatcopyright by providing access to the NRL footage to its subscribers of those

services.

41 The parties also agreed that particular TV Now users selected the following football

matches for recording by the TV Now service and that when each of these was recorded a

cinematograph film was made of it within the TV Now service infrastructure in the way

described above:

(a) on 23 September 2011 the Manly Sea Eagles v Brisbane Broncos

preliminary rugby league final was broadcast in Sydney at approximately

19:30 (the first NRL program);

(b) on 24 September 2011 the Melbourne Storm v New Zealand

Warriors preliminary rugby league final was broadcast in Sydney at

approximately 19:30 (the second NRL program);

(c) on 4 September 2011 the program Nines Sunday Football: Brisbane

Broncos v Manly Sea Eagles was broadcast in Sydney at approximately

15:30 (the third NRL program);

(d) on 23 September 2011 the Collingwood v Hawthorn AFL

premiership preliminary final was broadcast:


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(1) in the Melbourne television area at approximately 19:30 local time (the

first AFL program);

(2) in the Perth television area at approximately 18:30 local time (i.e.

about 1 hour later than the first AFL program) (the second AFL

program).

42 Various identified users watched the above five programs at times that were also

agreed facts. For example, the first NRL program was watched by user A twice, once on 23

September at about 22:30 and again the next day at about 13:20, while user B watched it on

numerous occasions between about 22:15 on 23 September to 18 October. However, it is not

apparent whether the users necessarily watched the whole program when they accessed it.

Thus, user B is recorded as having watched this program four times on 18 October at about

10:00, 15:39, 15:44 and 15:45. Obviously, user B could not have watched the whole, or even

very much, of the program on 18 October at the second and third of those times.

43 The first AFL program, broadcast on 23 September at 19:30, was watched on that

night by user I at about 19:49, user J at about 19:41, 20:06, 21:47 and 22:02 and user L at

about 19:31. Each of these three users must have had an Apple device because they were

able to watch the match as the broadcast was occurring. User J seems to have either paused

or stopped and re-started the program to have a break, perhaps to get a refreshment, or to

have had difficulty with the internet or mobile connection, at least in respect of his or her

second connection at about 20:06. User L appears to have been aware of the ability to use his

or her Apple device to obtain a near live streaming of the match. However, it is not clear

how long any of these persons watched. User L is recorded as having played the same film

14 more times, although a number of these had such short breaks between them that user Lmust either have paused or stopped and re-started the program or had difficulty maintaining

his or her internet or mobile connection.

44 In addition, two persons, users O and P, watched the second AFL program in Perth

respectively, two and four days after it went to air and in doing so must have viewed a

recording of the broadcast, i.e. a cinematograph film of it.


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THE ISSUES FOR PRESENT DETERMINATION

45 After they began on 26 August 2011, these proceedings developed as contemplated by

s 202 of the Act. Optus pleaded that the AFL and NRL had alleged that the TV Now service

infringed their copyright and had made unjustifiable threats, within the meaning of s 202, thatthey would seek to restrain Optus from continuing to provide the service. Telstra was joined

as a cross-claimant to enable it to assert its rights as an exclusive licensee of the AFL. The

parties sought only declaratory relief against each other in the present phase of the

proceedings that is concerned to determine a number of separate issues arising on the

amended cross claims and defences of the AFL, NRL and Telstra. The parties agreed that the

following issues required determination separately and before any others in their controversy:

1. Who did the acts involved in recording the NRL broadcasts, AFL broadcasts

and AFL films (Copyright Works or, for simplicity film) for the operation

of the TV Now service:

the user (Optus primary position);

Optus (the rightholders position and Optus' alternate position);

or

Optus and the user (the rightholders alternate position and

Optus' further alternate position)?

2. Does s 111 mean that the recording was not an infringement of copyright? If

s 111(2) does not apply, is Optus liable for copyright infringement by way of

authorisation?

3. When the recording was viewed, who did the acts of electronically

transmitting the Copyright Works:

the user (Optus primary position);

Optus (the rightholders position and Optus' alternate position);

or

Optus and the user (the rightholders alternate position and

Optus further alternate position)?


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4. When recordings were streamed to a user, was this a communication to the

public? Optus says it was not, and therefore was not an infringement of

copyright. The rightholders say it was, and therefore was an infringement.

5. Did Optus make the Copyright Works available online?

6. If the answer to 5 is yes, was this to the public?

7. Is the digital file comprising the NRL footage streamed to users an article

within the meaning of s 103 or an article or thing within the meaning of

s 111(3)(d) and, if so, was it distributed for the purpose of trade? (This issue

was pressed only by the NRL.)

46 Conceptually, the first six issues can be distilled as follows. The first substantively

concerns identifying who is the person who made the films stored in Optus NAS computer.

The second is whether or not s 111(2) excludes that person from liability for infringing the

rightholders copyright by making the films. The third, fourth, fifth and sixth issues concern

whether the user, or Optus, or both, made the transmission of a streamed film to the user and

whether, by that transmission, the film was a communication to the public or madeavailable online to the public under ss 86(c) or 87(c) within the defined meaning of

communicate as used in ss 10(1), 22(6) and (6A).

47 On 20 December 2011 I ordered, by consent, that the issues arising on the amended

cross claims and defences of AFL, NRL and Telstra be determined separately and before all

other issues, so as to give substantial certainty to all the parties as to the legally and

commercially crucial aspects of their controversy before the 2012 football season

commences. Each of the parties agreed, at my suggestion, that I should also grant any

unsuccessful party leave to appeal from any orders I make reflecting my decision.

48 I will discuss the issues for the sake of simplicity by focusing on the position of the

AFL. That is illustrative of the cases of each of the NFL and Telstra, since there is no

difference in substance between the positions of the AFL and NRL as owners of the

Copyright Works, or of Telstra as exclusive licensee. Also, for simplicity, I will treat the


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rights to make or broadcast or copy as incorporated in the equivalent rights in the Act in

respect of a (cinematograph) film.

Issue 1 : Who did the acts involved in recording the Copyright Works?

49 The AFL had the exclusive right to make a cinematograph film and sound recording

of the second AFL program (s 87(a) and (b)) and to make a copy of the film (s 86(a)). These

are rights, in substance, to reproduce a broadcast or film. The second AFL program was

broadcast in Perth an hour after the live game had commenced being broadcast in Melbourne.

Thus, the second AFL program exploited the AFLs right under s 87(a) and (b) to make a

film of the (live) television broadcast of the premiership preliminary final match that had

commenced earlier on 23 September 2011.

50 When Optus equipment recorded the broadcast of the first AFL program in the four

formats, it brought into existence four (identical) films of that broadcast. This recording was

within the AFLs exclusive right to make a film of a television broadcast under s 87(a) and

(b). And, when that equipment recorded the broadcast of the film that one of the Channel

Seven or Channel Ten companies had made of the second AFL program, Optus equipment

brought into existence four (identical) copies of the broadcast film. This recording was

within the AFLs exclusive right to make a copy of a film under s 86(a).

51 Optus contended that, in each case, the user, by pressing the record button or

instruction on the screen of his or her compatible device using the TV Now service, made

each film of the live broadcast of the game and the subsequent broadcast of the film of the

game within the meaning of s 111(1) and (2).

52 The rightholders argued that, for the purpose of s 111, Optus made any film when it

recorded a program in the four formats. They argued that this was because Optus owned and

operated the complex system that picked up the free to air broadcast in MPEG-2 form,

ultimately recorded it in the four formats and later was able to stream one of those recordings

to a user. The rightholders contended that TV Now was a recording service that Optus

provided to a user and the user took no part in the complex recording process. They

contended that the act of making a film could occur as an automated computer process that

involved no human intervention, citingRoadshow Films Pty Ltd v iiNet Ltd(2011) 194 FCR285 at 320-322 [151]-[158] per Emmett J and 363-364 [328]-[329] per Jagot J. The


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rightholders also asserted that the TV Now service was best characterised as one in which the

user asked Optus to copy a program on his or her behalf. They argued that s 111(1) required

that the person who made the film had to do so for the sole purpose of his or her own private

and domestic use by watching or listening to the material broadcast at a time more convenient

than the time of the broadcast.

Legislative history of s 111

53 The Copyright Amendment Act 2006(No 158 of 2006) repealed the former s 111 and

substituted the present section. In the initial second reading speech, for an earlier version of

what is now s 111, the Minister had said (Hansard: The Senate: 6 November 2006 at p 136):

First, the reforms recognise that common consumer practices of time-shiftingof broadcasts and format-shifting of some copyright material should be

permissible.

This bill will amend the Copyright Act to make it legal for people to tape TV or

radio programs in order to play them at a more convenient time.

It will be legal to reproduce material such as music, newspapers and books intodifferent formats for private usemeaning people can transfer music from CDs theyown onto their iPods and other music players. As a result of these changes, millionsof consumers will no longer be breaching the law when they record their favouriteTV program or copy CDs they own into a different format.

These reforms are innovative and technology is changing rapidly. (emphasisadded)

54 The Explanatory Memorandum for this draft of the Bill referred to the then lack of

provision to enable copying for private or personal use. It explained that this situation was

increasingly out of step with consumer attitudes and behaviour. It noted that copying for

personal use was particularly popular in two areas: time-shifting and format-shifting (where

an individual buys copyright material such as music, and then copies it to other devices that

he or she owns that are capable of replaying it, even if the devices use different formats). The

Explanatory Memorandum recognised that a range of new consumer devices was being

marketed to simplify and encourage the private copying of television broadcasts and

that such acts usually infringed copyright. It continued:

Many ordinary Australians do not believe that format-shifting music they havepurchased or time-shifting a broadcast for personal use should be legally wrongwith a risk of civil legal action, however unlikely. Failure to recognise such

common practices diminishes respect for copyright and undermines thecredibility of the Act.


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The failure to recognise the reality of private copying is also unsatisfactory for

industries investing in the delivery of digital devices and services . Eg, the supplyof personal recording devices by broadcasters of subscription television services is

proving to be important for the development of digital television. The availability ofpersonal recording devices is also likely to be important for digital radio. (emphasisadded)

55 The Explanatory Memorandum said that specific exceptions should be introduced into

the Act to permit both time-shifting and format-shifting to restore credibility to the Act. It

saw this step as giving certainty to copyright owners, users and industries that provide

products and services that assist consumers carry out these copying activities. It said that this

approach would facilitate the growth of digital television and radio services. The

Explanatory Memorandum also considered that the recognition of these present practiceswould be likely to have negligible market impact.

56 During the second reading debates, two important amendments were made that

affected the proposed cl 111(1) as first introduced in the Bill. First, the definition of private

and domestic use was added to s 10 in the Senate at the same time as what became s 111(3)

(e) and (f) and s 109A. Soon after, cl 111(1) was amended by deleting the words in

domestic premises and that had appeared immediately before solely for private and

domestic use. In moving these amendments in the Senate, the Minister said of the new

definition of private and domestic use (Hansard: The Senate: 30 November 2006 at

p 145):

The bill adds new copyright exceptions that permit the recording or copying ofcopyright material for private and domestic use in some circumstances. Thisamendment makes it clear that private and domestic use can occur outside a

persons home as well as inside. The amendment ensures that it is clear that, forexample, a person who under new section 109A copies music to an iPod can listen

to that music in a public place or on public transport. (emphasis added)

57 The Minister then explained in the Senate, repeating the words of the Further

Supplementary Explanatory Memorandum, why cl 111(1) had been reworded saying (ibid):

This relates to time shifting. ... This amendment substitutes a new section 111(1),which removes the requirement that a recording of a broadcast under section111 must be made in domestic premises. This amendment provides greater

flexibility in the conditions that apply to time-shift recording. The development

of digital technologies is likely to result in increasing use of personal consumer

devices and other means which enable individuals to record television and radiobroadcasts on or off domestic premises. The revised wording of section 111 bythis amendment enables an individual to record broadcasts as well as view and listen


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to the recording outside their homes as well as inside for private and domestic use.(emphasis added)

Issue 1 : Consideration

58 A person needs to employ technical equipment to make a film of a broadcast.

Section 111(1) does not require the person who makes the film to have any particular

relationship, such as ownership, to the equipment by which it is made. The Parliament must

have contemplated that a variety of techniques and technical equipment could be used by a

person to make a film of a broadcast. Since the 1980s households have had an evolving array

of recording equipment capable of making a film, or in popular parlance copying, what is

broadcast on television. Since the House of Lords decided CBS Songs Ltd v Amstrad

Consumer Electronics Plc [1988] AC 1013, copyright legislation has had to balance the

legitimate interests of the makers of original works and of ordinary citizens who use

technological advances to copy those works for their own use in their private or domestic

lives. In that case their Lordships refused to prohibit sales of blank tapes, recorders or similar

electronic equipment that were capable of making copies of anothers copyright work merely

because people might use these in their own homes to make copies of such work, rather than

work not protected by copyright. Mere sale of articles that have lawful uses does not

constitute authorisation of infringement of copyright, even if the manufacturer or vendor

knows that there is a likelihood that the articles will be used for an infringing purpose, such

as home recording, so long as the manufacturer or vendor has no control over the purchasers

use of the article: Australian Tape Manufacturers Association Ltd v Commonwealth (1993)

176 CLR 480 at 498 per Mason CJ, Brennan, Deane and Gaudron JJ.

59 As Gleeson CJ, Gummow, Hayne and Heydon JJ acknowledged in Stevens v

Kabushiki Kaisha Sony Computer Entertainment(2005) 224 CLR 193 at 213 [54], because of

the complex nature of the intangible form of property that it creates, copyright legislation in

Australia and elsewhere gives rise to difficult questions of construction. The task of

construction requires the Court to discern where the Parliament drew an enforceable line

between the exclusive rights to exploit the proprietary interest it created and conferred on the

owner of copyright in a work and the ability of others to use and copy that work. Amstrad

[1988] AC 1013 recognised the somewhat symbiotic love-hate relationship between the

entertainment industry, the electronics and communications industries and the consuming

public. The entertainment industry, of which the AFL and NRL are part, wants to exploit and


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maintain its exclusive rights over its output. The electronics and communications industries

want to sell their products and services to enable the public to see and hear and, of course,

copy what the entertainment industry is exploiting. The public want to utilise the latest that

technology has to offer to see and hear the entertainment as often as they desire, using

whatever medium is most convenient.

60 The daily life of persons in Australia and many other countries has transformed over

the last 20 years with advances in technology. Indeed, the subject matter of these

proceedings would have been unimaginable two decades ago. Now, a person using a mobile

phone, that can sit in the palm of his or her hand, can watch a recorded, or even near live,

football game or other entertainment program that had been, or is being, broadcast on free to

air television. The technology used by the TV Now service does not allow a user to

download or copy any recorded, or near live, program onto his or her compatible device. The

technology does allow a copy to be created, at the instance of the devices owner or user, and

stored by Optus infrastructure.

61 A person who makes a recording of a broadcast for his or her personal and domestic

use, solely for the purpose of viewing or listening to it at a more convenient time, is described

as having time-shifted the broadcast: cf: Laddie, Prescott & Vitoria, The Modern Law of

Copyright and Designs (Vol 1, 4th ed, LexisNexis, 2011) at p 913 [21.107].

62 Who makes the copy for the purposes of the Copyright Actin a situation like that

provided by the TV Now service? In some ways, this question resembles the old conundrum

of which came first: the chicken or the egg? Different courts confronted by a similar

dilemma to that presented here have approached it by recognising that identification of a

policy choice may be a key to construing whether an infringement of copyright has occurred:cp, on the one hand,Network Ten Pty Ltd v TCN Channel Nine Pty Ltd(2004) 218 CLR 273

at 287 [29] per McHugh A-CJ, Gummow and Hayne JJ; Cartoon Network LP, LLLP v CSC

Holdings Inc 536 F 3d 121 at 138 (2008: CA 2), Record TV Pte Ltd v MediaCorp TV

Singapore Pte Ltd [2011] 1 SLR 830 at 859-860 [69] per VK Rajah JA with, on the other

hand, the view of the district judges in Twentieth Century Fox Film Corporation v

Cablevision Systems Corporation 478 F Supp 2d 607 (2007 SD NY) at 617-620 (who was

reversed by the Second Circuit Court of Appeals in Cartoon Network 536 F 3d 121), and


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Arista Records LLC v Myxer Inc (C.D. Ca unreported 1 April 2011; 2011 US Dist LEXIS

109668) at p 19.

63 I am of opinion that the user of the TV Now service makes each of the films in the

four formats when he or she clicks on the record button on the TV Now electronic program

guide. This is because the user is solely responsible for the creation of those films. He or she

decides whether or not to make the films and only he or she has the means of being able to

view them. If the user does not click record, no films will be brought into existence that he

or she can play back later. The service that TV Now offers the user is substantively no

different from a VCR or DVR. Of course, TV Now may offer the user a greater range of

playback environments than the means provided by a VCR or DVR, although this can depend

on the technologies available to the user.

64 The ordinary and natural meaning of makes and making in the sense in which

those words are used in s 111(1) and (2) is to create by initiating a process utilising

technology or equipment that records the broadcast. No doubt a director could be said to

make a film as his or her creation of an original work in the sense of make, as that word

is used in s 22(4). But, s 111 is dealing with an individual creating a film, being a copy of a

broadcast by using some available technology or equipment to reproduce someone elses

original work. The complexity of making a recording or film of a broadcast requires the

person referred to in s 111(1) to use a means external to himself or herself to do so. The

concept of making a film or recording employed by s 111(1) and (2) is concerned with the

creation by one person of a copy of a second persons original work so that, as a result, a film

or recording is brought, somehow, into existence by the first persons action. The concept is

not concerned about the technological or other means by which that result is created. It is

unlikely that the Parliament intended to confine, in a presumptive way, the technology orother means available to be used by a person who wished to make a film solely for private or

domestic use and subject to the other conditions in s 111.

65 The legislative materials do not support the rightholders argument that, in effect, the

user could only utilise technology or equipment with which he or she had some greater

connection than the record button on the TV Now electronic program guide. The

Parliament intended that an individual should be able to time-shift by making a copy of a

broadcast that he or she could watch or listen to at a more convenient time. The TV Now


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service provides the user with a means for him or her to make a film of a broadcast. As the

Minister said in moving the amendment of s 111, it was intended to provide greater flexibility

in the conditions that apply to time-shifting, allowing recording of films by individuals inside

or outside their homes. VK Rajah JA, giving the judgment of the Singapore Court of Appeal

in Record TV [2011] 1 SLR at 841 [21], described the differences between traditional

VCRs and DVRs, on the one hand, and technology similar to that in Optus infrastructure for

the TV Now service on the other, as follows:

The fundamental objective of time-shifting is to allow a show to be recorded on astorage medium so that it may be viewed or listened to at the consumersconvenience after it is broadcast. This is a perfectly legitimate activity so long as itdoes not constitute copying copyright-protected material or communicating suchmaterial to the public contrary to copyright laws.

66 Here, the only person who could cause the Optus datacentre to bring into existence or

create the films in the four formats was the user who clicked the instruction record on his

or her compatible device. I agree with the reasoning of the Second Circuit Court of Appeals

in Cartoon Network536 F 3d at 131 that there is no real or sufficient distinction between the

characterisation of a user of a service, like TV Now, to record a film of a broadcast and a

person who uses a VCR (or DVR) to do so, as the person who makes the copy of the work

alleged to be an infringement of anothers copyright. The Court of Appeals did not considerthat a service provider should be made liable for directly infringing a rightholders copyright

simply by offering a service that makes copies automatically upon a users command.

67 Moreover, because of the way the TV Now service is designed, a film cannot be made

unless a user clicks the record button. In University of New South Wales v Moorhouse

(1975) 133 CLR 1 the High Court held that a student had infringed the copyright of an author

by photocopying part of his book on a photocopier provided by the University in its library.

However, the Court also held that the University was secondarily liable for authorising the

infringement. That was because it had power to control the copying activity on its machines

but failed to take steps to prevent infringement, while providing potential infringers with

copyright material and the use of its machines by which infringing copies could be made:

Australian Tape Manufacturers 176 CLR at 498 per Mason CJ, Brennan, Deane and

Gaudron JJ; Moorhouse 133 CLR at 17 per Gibbs J, 22-23 per Jacobs J with whom

McTiernan ACJ agreed. Critically, for present purposes, Gibbs J said that it was impossible


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use of the words maker and making elsewhere in the Act is different, namely, the latter

use is the technical means of identifying the subsistence and ownership of copyright. Rather,

in s 111(1) and (2), those words are used in the more colloquial sense, indeed in their natural

and ordinary meaning, in order to identify who is to have the benefit, not of copyright in the

film or copy, but of the exemption from liability for infringing anothers copyright: see

Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199

CLR 321 at 338 [34]-[35] per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ.

71 For these reasons, I am of opinion that the user alone did the acts involved in

recording the copyright works. It follows that Optus did not do any of those acts.

Issue 2 : Was recording the films an infringement of copyright?

72 Optus informed users in two separate places in the subscription process for the TV

Now service that it was a breach of copyright to make a copy of a broadcast other than to

record it for the users private and domestic use. In the second of those places, within the

terms and conditions, Optus added that the copy also had to be recorded for use by watching

the material broadcast at a more convenient time. I have emphasised these two warnings in

[15] and [16] above. Also in the terms and conditions:

Optus promised the user that he or she could access the recordings on

the users compatible Optus mobile or PC; and

the user promised that the TV Now service was for his or her

individual and personal use and that he or she, in effect, would not breach

any of the conditions in s 111(3).

73 The rightholders submitted that Optus had failed to prove that any of the films were

made solely for private and domestic use by watching or listening to the material broadcast

at a time more convenient than when the broadcast is made within the meaning of s 111(1).

They contended that there was no evidence of any users purpose, let alone his or her having

the sole purpose required by s 111(1) . The rightholders said that the making of four films in

each compatible format negated the sole permissible purpose in s 111(1) because it had not

been proved, and in any event was unlikely, that each user had all four kinds of compatible

device. They contended that there was no need for more films to be made than the onenecessary for the user to satisfy a desire to time-shift the broadcast for the convenience of his


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or her viewing. They argued that this gave the user significant freedom of choice as to the

format for viewing. In addition, they argued that s 111(1) used the indefinite article a in

the expression makes a cinematograph film or sound recording to denote that only one film

or recording was authorised by the statute. Next, the rightholders argued that the evidence

showed that users L and J had the first AFL program streamed to them within only about 1.5

and 11 minutes of the commencement time of the broadcast and that this did not amount to

time-shifting of the broadcast. And, they argued that the use by small to medium businesses

was outside the scope of the purpose in s 111(1) because such a business could not have a

private or domestic use for such films.

Issue 2 : Consideration

74 The purpose of the exception in s 111(1) and (2) was to accommodate, to some

degree, the law to the realities of modern life. Copying for private and domestic use is so

much a commonplace that it is not difficult to infer that a user who made a film, by clicking

record, was doing so for such a use. Indeed, the rightholders did not suggest how anyone,

for example, watching a broadcast or film of a football game or television program, on his or

her mobile device or PC would be doing so for some reason other than personal pleasure or

interest. Similarly, even though small to medium business subscribers could sign on for the

TV Now service, as a matter of practicality, the persons who could obtain access would be

employees of, or individuals concerned in, those businesses. After all, a corporation, being

an abstract creation of the law, cannot look at a film; only individuals are capable of that or

of operating a mobile device or PC for that purpose So, whoever signed up for the TV Now

service must have been an individual. That persons use, not the corporations or businesss,

is what is relevant for the purposes of s 111(1). Of course, if the person used the film for a

business, non-personal or non-domestic purpose such as those proscribed in s 111(3), then

s 111(1) and (2) would not apply to that use.

75 Here, the users agreed with the terms and conditions of the TV Now service that

limited their use of it to a non-infringing use that complied with the purposes in s 111(1).

Those terms and conditions expressly stipulated that the service was for the users individual

and personal use and noted that the user would infringe copyright by making a copy of a

broadcast other than to record it for his or her private and domestic use by watching it at a

more convenient time. And, the only use that Optus authorised a user to make of the film


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was to play it at a time of his or her choosing within 30 days of the broadcast on mobile

devices or PCs which are, of their nature, private. Optus also required a user to provide his or

her own home address as a condition of signing onto the TV Now service. And, the user can

only watch one recording from the TV Now service at a time.

76 The infringements complained of are that films of broadcasts of football matches were

made in breach of the rightholders copyright. Each film of each broadcast remained in

existence for only 30 days from the time of the original broadcast. There is no evidence that

on the occasions in the agreed facts, any user had a purpose other than that of wanting to

watch that game for his or her own private and domestic use and pleasure. Indeed, some of

them replayed or revisited the recording on a number of a occasions. I infer that their

purpose in playing (as well as in recording) the copyright works was for their own private and

domestic use. That inference is conformable with the terms and conditions on which Optus

provided the users with the TV Now service, and with which they agreed. Such an inference

is also a recognition of the ordinary experience of life, that was assumed by the Parliament in

ensuring that time-shifting of the kind provided for in s 111(1) and (2) would not be an

infringement of copyright.

77 There is no evidence or other reason to suggest that individuals, such as the users of

the TV Now service, were not making films solely for their own private and domestic use and

had departed from their agreement only to use the TV Now service in that way. In these

circumstances, a court should be slow to infer that those individuals have infringed the Act or

copyright by making films having regard to s 111 and in circumstances such as those of the

TV Now service. The value of the exception created by the Parliament, that is designed to

give greater flexibility to individuals so as to take advantage of technological advances,

would be seriously eroded if a service provider, who has structured a service as carefully asTV Now, had to lead evidence about each users individual purpose on each occasion of use:

cfRecord TV[2011] 1 SLR at 851 [46] ff.

78 However, the circumstances of the two users L and J and the facility offered by the

TV Now service of being able to view broadcasts near live on Apple devices, require

further consideration. As the rightholders submitted, there is a tension between near live

viewing and a purpose of watching the material broadcast at a time more convenient than

the time when the broadcast is made (s 111(1)).


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Issues 3 and 5 : Does Optus communicate the film when the user plays it?

86 The rights comprised in the copyright of both a film and a television broadcast include

the exclusive right to communicate it to the public (ss 10(1), 22(6) and (6A), 87(c), 101).

Thus, the rightholders argued, when a user clicked the play button, Optus communicatedthe film to the public by making it available online or transmitting it electronically in the

format compatible with the users device. The rightholders argument raises agreed issues 3

and 5 and requires analysis of how the definition of communicate in s 10(1) applies to the

transmission of the film to the user who has sought to view it. This is because s 22(6), as

clarified by s 22(6A), is a deeming provision about who makes a communication other than a

broadcast.

Issues 3 and 5 : Consideration

87 Here, the films of the broadcasts in the four formats are stored in the NAS computer

in Optus datacentre and streamed to the users compatible device when he or she presses the

play button to view it. Under s 22(6), the person responsible for determining the content of

a communication is deemed to be its maker for the purposes of the Act. However, s 22(6A)

was introduced by the 2006 amending Act to address the incongruity that a person browsing

the internet could click on a link and bring up a web page without realising what it contained.Thus, s 22(6A) provides that a person is not responsible for determining the content of a

communication under s 22(6) merely because he or she takes one or more steps for the

purpose of either gaining access to what someone else has made available online in the

communication in question or receiving the electronic transmission consisting of that

communication. Thus, s 22(6A) addresses both limbs of the definition of communicate.

88 In iiNet194 FCR 285 the Full Court considered the question of who was the maker of

automated communications between many computers using a sophisticated file sharing

system (BitTorrent). That system was designed to diffuse into small packets a file, being

generally a movie or sound track (which I will refer to as a movie), that had been

downloaded onto many computers and then to send packets from those computers to a

different computer using the BitTorrent software. Thus, the computer of a person who

wished to download a copy of the movie caused it to send a request to a swarm of other

computers that both used the software and had the movie to share. The computers in the

swarm responded by sending many copies of the movie in small packets that were collected


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by the requesting computer and assembled into the complete movie. The Full Court held that

a communication within the meaning of s 22(6) could be made by one computer to another

without direct human intervention if one computer made a work available online: iiNet194

FCR at 320-322 [151]-[158] per Emmett J, 363-364 [327]-[330] per Jagot J, 435 [661]-[662]

per Nicholas J. Their Honours also held that a person could make something available online

by leaving a computer switched on that was preconfigured to respond automatically to

requests from other computers to transmit the work or, relevantly, movie. Each time the

computer responded, a new communication occurred.

89 Here, in one sense, Optus communicates the program recorded by the user because its

infrastructure has been configured to respond to a play instruction from the user by making

the recording available online or indeed electronically transmitting it to the user. But, in

another sense, the user has made the program available online by instructing Optus to record

it and to transmit it electronically to the user for each individual play request made by the

user in the 30 days following the broadcast. Similarly, a person who records a television

program by using a piece of equipment, makes the recording available for replaying and uses

the play button on the equipment to transmit it to the television screen at that persons

option.

90 I am of opinion that the user was responsible for any communication within the

meaning of s 22(6) made to his or her device by seeking to play the program that he or she

had earlier selected for recording. Having regard to what s 22(6) and (6A) provide, the TV

Now service operates to make the user the person responsible for determining the content of

any communication to him or her of a recorded program when the user makes a play

request. The content of the communication referred to in s 22(6) must have been the program

that the user sought to have played. That content was recorded at the users instruction. Forthe purposes of s 22(6), the content was indistinct from the four formats in which films of the

one broadcast or film were made. Each format was a vehicle to deliver the content to the user

on a particular compatible device. The user must click play if any communication, by way

of an electronic transmission, of the film to him or her is to occur.

91 The situation of a user of the TV Now service clicking play is quite unlike that of a

person browsing the internet who is unaware or uncertain of what content may be delivered

by clicking on a link. The user of the TV Now service had previously determined that the


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content of what he or she caused to be recorded would be the program or show he or she

selected. By seeking to play it, the user determined that his or her device would display the

recording just as if he or she had inserted a video cassette or DVD into a VCR or DVD player

and pressed play.

92 Of course, more than one person can be responsible for determining the content of a

particular communication as Jagot J noted in iiNet194 FCR at 366-367 [337]-[339]. There

may well be situations where it is difficult to ascertain who is responsible for determining the

content of a link that a user clicks on a web page. If a person chooses to buy a product or

service that is downloaded to his or her computer by clicking on a link, it may be that both

the vendor and purchaser are responsible for the content. The artificial construct created by

s 22(6) is necessary for the purposes of the Act. It must operate as a technology neutral

mechanism so as to attribute responsibility to at least one person for the purposes of

ascertaining who, if anyone, may be liable for infringing copyright in situations. But it has to

accommodate itself to realities and s 22(6A) provides a mechanism for evaluating the degree

to which an attribution of responsibility should be made. A person who selects a television

channel to watch a movie, perhaps with family or friends, on a television set, has taken a step,

or more, to receive the electronic transmission of the communication consisting of that

movie. However, the deliberate exclusion of broadcasts from the deeming in s 22(6) means

that the person is not deemed by s 22(6) to have been responsible for determining the content

of that communication so as to have infringed the copyright in the film by communicating the

film to the public under s 86(c).

93 Because s 22(6) uses the expression the person responsible, there will be situations

in which an evaluation must be made of the particular roles played by each party to the

communication. Every communication, by its very nature, involves more than one partyalthough it is not necessary that each is present at the same place or a human being. But,

what is involved is the imparting of some message by one side in the discourse to another.

94 Here, by clicking the play button on his or her compatible device, the user

communicated the film to his or her device by determining that the film would be made

available online or electronically transmitted to that device. Importantly, s 22(6) and (6A)

recognise that the artificial construct they create will have some difficulty in working

perfectly harmoniously with the definition of communicate. But clearly enough, s 22(6A)


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is directed to a situation where a person sitting at a computer and browsing the internet can

make available online or electronically transmit, within the meaning of the definition of

communicate, particular content that he or she wishes to receive when he or she clicks on a

link.

95 It may appear odd that Optus, which has stored the films in its NAS computer, does

not communicate (make available online or electronically transmit) the film in the

compatible format, but that is because it did nothing to determine the content of that

communication. The user initially chose to record the program so that later he or she could

choose to play the film so recorded using the TV Now service. Optus service enables the

user to make those choices and to give effect to them. But in doing so, Optus does not

determine what the user decided to record when he or she later decides to play it on the

compatible device he or she is then using to watch the film. Hence, the user, not Optus, is the

person responsible for determining the content of the communication within the meaning of

s 22(6) when he or she plays a film recorded for him or her on the TV Now service. Thus,

the user did the act of electronically transmitting the film within the meaning of ss 86(c) and

87(c).

96 The Singapore Court of Appeal arrived at a similar conclusion in Record TV[2011] 1

SLR at 846 [36], but because their Honours construed somewhat differently worded

provisions, their reasoning on this issue is not of assistance.

Issues 4 and 6 : Was the communication to the public?

97 The rightholders argued that any communication was to the public within the

meaning of ss 86(c) and 87(c). If the maker of the communication was the user, as I have

found, he or she necessarily made it to himself or herself. However, that is not determinative

of whether the user so communicated the work to the public if a communication of a film

was made by its either being made available online or electronically transmitted. The

question arises as to whether either mode of communication, for the purposes of the TV Now

service, was to the public.

98 The rightholders argued that users of the TV Now service were part of the

rightholders public ie. the persons who would otherwise have watched the relevantbroadcast and that they:


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received the films in a commercial setting as part of a subscription to

an Optus internet or mobile telephony service; and

had chosen, as members of the public, to avail themselves of that

service.

99 The rightholders argument relied on the reasoning in Telstra Corporation Ltd v

Australasian Performing Right Association Ltd(1997) 191 CLR 140 esp at 157 per Dawson

and Gaudron JJ and 195-203 per Kirby J and the decision of Floyd J inITV Broadcasting Ltd

v TV Catchup Ltd (No 2) [2011] FSR 40.

100 Optus argued that the films were made for private purposes by the user and only

communicated to the user as maker of the film. It contended that the recording was not part

of a transaction with economic value and its communication was private. Optus submitted

that the film of what had been broadcast and recorded on its equipment was not

communicated to the public within the meaning of ss 86(c) or 87(c) because the user was the

only person who could get access to the content when he or she communicated it to his or her

compatible device by clicking the play button.

Issues 4 and 6 : Consideration

101 In Telstra 191 CLR 140, Dawson and Gaudron JJ at 153-157 and Kirby J at 197-200,

considered, relevantly, whether Telstra broadcast copyright musical works to mobile

telephone users when they were placed on hold. Toohey J at 158 and McHugh at 174 agreed

with Dawson and Gaudron JJ on this issue. Their Honours discussed the development of the

con

Optus (NSD 1430l of 2011) (Draft Judgt as at 11 Jan 2012)

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