April 27 (Bloomberg) -- Singtel Optus Ltd. lost a legal dispute with Australian sports leagues over the showing of football and rugby matches on computers and mobile devices soon after they are broadcast live on free-to-air television.
An Australian federal court appeal panel in Sydney today overturned a lower court ruling, which said Optus’s “TV Now” service doesn’t infringe copyright laws.
Had the appeal panel allowed the lower court ruling to stand, investment in Australian sports would have been diluted, Craig Middleton, a spokesman for Telstra Corp. which owns exclusive rights to show the matches on multiple devices, said following the ruling. The decision will provide certainty to providers of content on their copyrights, he said.
“It’s important for fans, players and Australian sport,” Middleton said. Broadcast rights “are an important source of investment.”
The Australian Football League, the most popular spectator sport in the country, and the National Rugby League sought to protect broadcasting rights valued at more than $2 billion. The main point of dispute was who creates the electronic files that are sent to the customer for viewing.
The AFL, NRL and Telstra, Australia’s biggest phone company, said Optus’s service infringed their copyrights because it makes the recordings, stores them on its servers, and passes them on to customers.
The three-judge appeal panel agreed with Telstra and overruled Judge Steven Rares, who’d said that Optus customers record the broadcasts for personal use, much as people use video cassette or digital video recorders, which Australian copyright allows.
“Ours is a different conclusion,” Justices Arthur Emmett, Annabelle Bennett and Paul Finn said in a summary of their ruling. “The maker was Optus, or in the alternative, it was Optus and the subscriber.”
Australia’s Attorney General Nicola Roxon said her government welcomed the appeal court’s ruling.
“The process that Optus had been using has been found to breach the Copyright Act,” Roxon told reporters in Adelaide today. “It takes us back to the position that really people had presumed was the status quo.”
Considering an Appeal
Optus will review the decision and consider all its options, including an appeal to the country’s top court, company spokeswoman Clare Gill told reporters after the ruling. She declined to comment further.
The AFL signed a five-year, A$1.25 billion ($1.3 billion) agreement last year with Seven West Media Ltd.’s Seven Network, Foxtel, Australia’s biggest pay television operator, and Telstra for exclusive broadcast rights to its games. The NRL is in talks with broadcasters on a new deal that would run from 2013 to 2017. The Sydney Morning Herald reported earlier this month that the rugby league was guaranteed a A$1.2 billion deal after Fox Sports declared it won’t be beaten for the rights.
“It’s a win for all sports in this country,” Andrew Demetriou, chief executive of the AFL, said in a televised news conference.
He said Optus’s behaviour in supplying the service without discussions with the sports leagues was unethical.
“It’ll be a long time before we speak to Optus,” he said.
Optus had argued customers create the recordings of the sports matches by ordering to view them.
“The customer operates Optus’s equipment,” Richard Cobden, the company’s lawyer, told the appeal panel at a March 15 hearing in Sydney. “The last human intervention is the maker.”
Neil Murray, the NRL’s lawyer, called Optus’s argument “self-serving.”
A customer who orders a pizza online didn’t make the pie, Murray said at the appeal hearing.
“There’s no doubt who the maker is,” he said. “It’s Pizza Hut.”
The case is National Rugby League Investments Ltd. v. SingTel Optus Ltd. NSD201/2012 Federal Court of Australia, Full Court (Sydney).
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