Optus and legal experts alike believe that the Australian High Court's decision not to hear the TV Now copyright infringement case puts at risk a number of cloud computing services, and have turned to the Australian Law Reform Commission's (ALRC's) review of the Copyright Act for a solution.
This morning, the High Court dismissed a special leave application from Optus seeking to overturn an earlier court ruling that the company's TV-recording product, TV Now, infringed on the copyright held by the National Rugby League (AFL) and the Australian Football League (AFL) by recording broadcasts of the matches.
The free-to-air TV broadcast recording product allowed Optus customers to save recorded TV broadcasts from 15 channels to Optus' cloud, to watch on PCs, iPhones and Android products. The data would be saved for 30 days and customers would get 30 minutes of storage for free per month, but could pay more money to get more storage space from Optus.
The iPhone app also allowed customers to stream the recorded broadcast with as little as two minutes delay from the original broadcast.
The full bench of the Federal Court ruled that the 2004 exemption in the Copyright Act, which was designed to allow people to record TV broadcasts to watch later at a time more convenient, did not apply to the TV Now product, because Optus stood to gain commercially from it. And although the recording system was automated, Optus nonetheless had a role in "making" the recording.
The High Court rejected Optus' appeal, stating that there was little prospect of success before the High Court.
At the same time, the ALRC is currently reviewing the Copyright Act, and specifically cited the TV Now case in an accompanying issues paper, asking whether the law needed to be more flexible to accommodate for cloud services. For this reason, Optus' Vice President of Regulatory Affairs David Epstein said that, despite Optus' loss today, the debate around the exemption in the Act would continue.
"We had hoped that the High Court of Australia would grant leave to appeal, but we are pleased that it will still be considered by the Australian Law Reform Commission. So this is a debate that continues," he said.
Epstein warned that the court's ruling would impact online storage and cloud services.
"Online storage is here and with us now, so we think it's time to confront the realities of that. We can't shut ourselves off from the world," he said. "We don't want to find ourselves facing a 21st century equivalent of being forced to store things on 8-track cartridges and audio cassettes, rather than more convenient technology like online storage."
Dr Rebecca Giblin, law professor at Monash University, told ZDNet that the ruling calls into question all time-shifting television services, including services like TiVO
"Australians have had the right to time-shift television recordings since 2006, but this decision means that right is of very little value," she said.
As is cloud providers, in general.
"Many remote back-up services can be set to automatically scan for and copy all files of a particular type, like movies or music," she said. "Under the Full Court's reasoning, those providers could be 'making' copies and, therefore, committing copyright infringement, just through that automatic process."
Australian National University associate law professor, Dr Matthew Rimmer said that the sporting codes were misusing the Copyright Act.
"Sadly, the Optus-NRL ruling will undermine the ability of consumers to engage in time-shifting with new technologies, in respect of the AFL, the NRL, the English Premier League, the Tennis and the Olympics," he said.
"Sporting organisations only have a peripheral interest in television broadcast copyright. I am concerned that copyright law has been distorted by the political intervention of elite sporting organisations. The role of copyright law should be focused on promoting the progress of science and the useful arts for the wider public benefit.
Giblin said that while the AFL and the NRL are powerful lobbyists, she said that the government could find a way to implement changes to the Act that would not adversely impact on their interests.
"I'm not at all convinced that a broad, technologically-neutral reading of our time-shifting right would actually [impact on the AFL and NRL]," she said. "Cloud-based time-shifting technologies have been available in the US since at least 2006, and are permitted under its 'fair use' copyright exception. The consequence is that TV networks have had to compete with those services, and it has driven a lot of innovation in the form of Hulu, Netflix and so on. Major US sports providers offer some incredible on demand services, and they're thriving."
But Australia will have to wait for now, she said.
"This decision strands us in the technological dark ages, and provides little incentive for similar innovation."