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TV Now was too good, and that was its downfall

Optus loss not the end of the road

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Absent an appeal to the High Court, Optus’ TV Now service infringes copyright. It is not, however, a threat to the whole of the Internet, cloud services – nor even, necessarily, to the use of cloud to record TV.

Although there will, indubitably, be people crying doom – and in spite of the victors’ crowing, which includes AFL boss Andrew Demetriou re-iterating his “stolen content” line to anyone who’ll listen – the Optus TV Now appeal decision is quite constrained.

It covers a specific service with specific technical and customer relationship characteristics – and the judgment even notes that a provider might be able to contrive a cloud PVR service that doesn’t fall foul of the Copyright Act.

“We should emphasise that our concerns here have been 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,” the judgment says.

In other words, the full bench of the Federal Court has decided that TV Now – the system, complete with all the technology needed to deliver the service – was designed with the sole purpose of recording and playing back TV shows, in a way in which the ordinary citizen may not have been able to do. Optus put a mighty amount of technology and expertise into crafting the system – and that was its downfall.

“Put shortly Optus is not merely making available its system to another who uses it to copy a broadcast … rather it captures, copies, stores and makes available for reward, a programme for later viewing by another,” the judges have decided.

So what matters, both for the “cloud PVR” sector and the industry at large, is to understand how the system design and the Optus-customer relationship combined to condemn TV Now. Which characteristics of the service design do the judges seem to single out in their decision?

A key aspect, the court found, was Optus’ “heavy involvement” in the recording. TV Now required so much activity on Optus’ part that it became a “maker” of a copy along with the individual subscriber. “Without the concerted actions of both [Optus and the subscriber – Ed] there would be no copy made of a football match for the subscriber. Without the subscriber’s involvement, nothing would be created; without Optus’ involvement nothing would be copied.”

Had Optus been permitted to keep its previous shelter, Section 111 of the Copyright Act (which permits copies to be made for personal and private use to facilitate time-shifting), it may have survived this reasoning. However, the court decided that Section 111 isn’t involved because Optus isn’t a “private” individual – from the judgment: “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 Section 111(1). Optus may well be said to have copied programmes so that others can use the recorded programme for the purpose envisaged by Section 111.” (Emphasis added).

Can systems not infringe?

Hence the judges’ observation that a non-infringing system might be feasible – if the system is designed such as to avoid the liability of the provider becoming a “maker” of the copy.

For example, imagine a rack full of PVRs, whose connection to the Internet merely facilitated a customer streaming the output of their tuner to the remote device. The provider, renting a device to a consumer, providing power (and reboot), and connecting the I/O to a router – that provider might survive this judgment.

Alternatively: if I provide a cloud computing service, and a customer configured TV recording software to could send stuff from their own home for their exclusive and personal storage and retrieval – then I can’t see how it would be captured by National Rugby League Investments vs Singtel Optus.

Nor is there any natural reason to extend this judgment to (say) Dropbox or other simple cloud storage services. They do not, as Optus did, provide a nest of antennae to receive broadcast signals, design an electronic program guide, or put together transcoders to create a copy in each of the supported formats (PC, iOS, Android and mobile phone).

The decision, in other words, is a threat to the nascent “cloud PVR” business in Australia – I would imagine that providers like MyTVR.com.au and Beem.tv are worried – but its impact beyond that sector seems limited. ®

Internet Security Threat Report 2014

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