The High Court's denial of an appeal in the Optus TV Now case is sensible in law, but illustrates how far copyright law itself lags behind society's expectations when using now-commonplace technologies. And it's only going to get worse.
In his original Federal Court decision back in February, Justice Steven Rares argued that recording free-to-air football via the Optus service and playing it back just minutes later counted as personal-use time-shifting, which is permitted under section 111 of the Copyright Act 1968.
"Individuals were in control, pressing the virtual record button, not Optus... Sure, they were using Optus's VCR-in-the-cloud, not their old Betamax. Their recording was stored in an Optus data centre, not on the shelf below the telly. The playback was almost immediate, streamed digitally to a device of their choosing. But the recording was still made 'solely for private and domestic use', as the law reads, and that's all that matters."
But in April the Full Court disagreed.
The court's decision was based on two key issues.
First, backed up by detailed arguments and case law, it ruled that Optus was directly involved in making the potentially-infringing copy, not just the end user. It was no longer personal.
"4 The maker was Optus or, in the alternative, it was Optus and the subscriber. It is unnecessary for present purposes to express a definitive view as between the two. Optus could be said to be the maker in that the service it offered to, and did, supply a subscriber was to make and to make available to that person a recording of the football match he or she selected. Alternatively Optus and the subscriber could be said to be the maker for Copyright Act purposes as they acted in concert for the purpose of making a recording of the particular broadcast which the subscriber required to be made and of which he or she initiated the automated process by which copies were produced. In other words, they were jointly and severally responsible for the act of copying."
Second, by referring to the history of section 111's wording as it made its way from first draft through parliamentary debate to enacted law, the court ruled that the commercial time-shifting service offered by Optus fell outside the definition of "personal and domestic" envisaged at the time.
"89 There is nothing in the language, or the provenance, of s 111 to suggest that it was intended to cover commercial copying on behalf of individuals. Moreover, the natural meaning of the section is that the person who makes the copy is the person whose purpose is to use it as prescribed by s 111(1). Optus may well be said to have copied programmes so that others can use the recorded programme for the purpose envisaged by s 111. Optus, though, makes no use itself of the copies as it frankly concedes. It merely stores them for 30 days. And its purpose in providing its service – and, hence in making copies of programmes for subscribers -- is to derive such market advantage in the digital TV industry as its commercial exploitation can provide. Optus cannot invoke the s 111 exception."
Optus had applied for special leave to appeal this decision to the High Court, but on Friday that was denied. There was little chance for the case to succeed, the court said.
In a nutshell, this result means that while you can time-shift live TV yourself, a third party can't offer to do it for you as a commercial service.
This goes completely against the cloud computing trend of outsourcing your information infrastructure to external providers.
I reckon it also goes against what people expect from their technology in the age of everything as a service.
The average 14-year-old can shoot a video on their phone, upload it to Facebook, and later view it on their laptop. Or someone else's laptop. Or the family's new smart TV. They expect to be able to do this with media they buy as well as media they create. Manufacturers such as Samsung and service providers such as BigPond Music even promote cross-platform access as a feature, though with various restrictions.
Moreover, the ruling casts doubt on the legality of other Copyright Act exemptions, such as format-shifting.
Curiously, this problem would seem not to apply in the case of making backup copies of computer programs as opposed to data such as music or movies. Section 47C of the Act already allows backups to be made "by, or on behalf of, the owner or licensee of the original".
That means that if you back up your computer's hard drive to a cloud provider, some of the ones and zeroes are infringing copies but some are not.
The Full Federal Court emphasised that their concerns were...
"... limited to the particular service provider-subscriber relationship of Optus and its subscribers to the TV Now Service and to the nature and operation of the particular technology used to provide the service in question. We accept that different relationships and differing technologies may well yield different conclusions to the 'who makes the copy' question."
Nevertheless, my non-lawyer eyes found the arguments quite generalised. It's presumably too expensive to argue against them, dissuading Australian service providers trying on a business model that's common overseas.
These issues are being addressed in the Australian Law Reform Commission's current inquiry into copyright and the digital economy.
I'd argue that it shouldn't matter how and where the personal-use time-shifting is done. Nor should it matter if I pay someone to do it for me, nor even if they make a reasonable profit doing so.
As Optus vice-president, corporate and regulatory affairs, David Epstein is quoted in the AFR as saying: "The media industry worldwide is moving to the understanding that 'an eyeball is an eyeball', no matter when or where a content producer reaches an audience member."
But you can bet that Australia's major sporting codes and the existing rights-holders, rather than adapt and evolve, will squeal like stuck pigs at a frequency most politicians hear all too clearly. It seems that's all they know to do.
TECHNOLOGY SPECTATOR: TV Now's cloud complications
The High Court's move to shut down the Optus TV Now case is sensible law, but it ignores the emerging trends in cloud computing.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free