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[2012] FCAFC 59
Federal Court of Australia (Full Court)
2012-04-27
Bennett JJ
Original judgment source is linked above.
INTRODUCTION 1 The Optus group of companies is a leading provider of communications services throughout Australia. Two of its members, Singtel Optus Pty Ltd and Optus Mobile Pty Ltd (referred to collectively here as "Optus"), devised a new subscription service - "TV Now" - which it offered, in the mainland State capitals, to private and to the employees (subject to conditions) of small to medium business customers from mid-2011. That service enabled a subscriber to have free to air television programmes recorded as and when broadcast and then played back at the time (or times) of the subscriber's choosing on the subscriber's compatible Optus mobile device or personal computer. The system which permits such "time-shifting" of programme viewing requires the copying and storing of each television broadcast recorded for a subscriber, hence the allegations of copyright infringement in this matter. 2 It has been agreed for the purposes of these proceedings that the Australian Football League, the National Rugby League partnership (which consists of the first and second appellants in NSD 201 of 2012) and Telstra have copyright interests in the free-to-air broadcasts of live and filmed AFL and NRL football games played on four specified days in September 2011 which were recorded for Optus subscribers using the TV Now system. The Australian Football League conducts a national Australian Rules competition. The National Rugby League partnership conducts a national Rugby League competition. Those entities have granted to Telstra an exclusive licence to communicate to the public, by means of the internet and mobile telephony enabled devices, free to air television broadcasts of football matches conducted by them. 3 The two primary issues raised in the appeals can be stated shortly. The first is: When a cinematograph film (or copy) and a sound recording (or copy) were made when a television broadcast of one of the AFL or NRL matches was recorded for a subscriber, who, for the purposes of the Copyright Act 1968 (Cth) was the maker of that film, etc? Was it Optus or the subscriber (or both of them jointly)? The primary judge's answer to this was that the maker was the subscriber. 4 Ours is a different conclusion. 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. 5 The second question is: If Optus' act in making such a film would otherwise constitute an infringement of the copyright of AFL, NRL or Telstra, can Optus invoke what we would inaccurately, but conveniently, call the "private and domestic use" defence of s 111 of the Act? The primary judge did not have to consider this, given his answer to the first question. 6 Our answer is that Optus cannot in either of the above contingencies bring itself within the scope of the s 111 exception on its proper construction. 7 Our conclusions on these two matters are sufficient to resolve these appeals. They must be allowed. It is, in consequence, unnecessary to consider the various alternative grounds of appeal the appellants have raised. 8 We should also note at the outset that Audio-Visual Copyright Collecting Society Ltd - a declared collecting society for the purposes of Parts VA, VB and VC of the Copyright Act - sought leave pursuant to r 9.12 of the Federal Court Rules 2011 to make short written and oral submissions on how s 111 should properly be interpreted having regard to the scheme of Part VC of the Act relating to the retransmission of free-to-air broadcasts. While this application was opposed by Optus (which nonetheless responded to the submissions made) it was an appropriate one in the circumstances and we have allowed the application on the limited basis sought. This said, we have in the event found it unnecessary to take account of those submissions. 9 Though our conclusions differ from those of the primary judge, we acknowledge the assistance we have derived from his reasons for decision. We have found the questions raised in the appeals to be of some difficulty and considerable uncertainty. His Honour conducted the proceeding at first instance in an expeditious manner, and reasoned cogently in his reasons for judgment. The primary judge has distilled very complicated technology and has crystallised complex issues in a way that has made the management of the appeal much easier than it might have been.
THE STATUTORY SETTING 10 The alleged copyright infringements relate primarily to the copying of television broadcasts but in the case of what has been called the "second AFL programme", the television broadcast in question was of a film of a match which had been pre-recorded on to film. Consequently it is necessary to refer to those provisions dealing with both the copyright in cinematograph films (s 86 of the Act) and copyright in television broadcasts and sound broadcasts (s 87). 11 There is a number of definitions in s 10 of the Act which require note at the outset. They are: broadcast means a communication to the public delivered by a broadcasting service within the meaning of the Broadcasting Services Act 1992 … cinematograph film means the aggregate of the visual images embodied in an article or 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 so shown; and includes the aggregate of the sounds embodied in a sound-track associated with such visual images. copy, in relation to a cinematograph film, means any article or thing in which the visual images or sounds comprising the film are embodied. private and domestic use means private and domestic use on or off domestic premises. record includes a disc, tape, paper, electronic file or other device in which sounds are embodied. sound recording means the aggregate of the sounds embodied in a record. television broadcast means visual images broadcast by way of television, together with any sounds broadcast for reception along with those images. 12 We would emphasise in passing the emphasis upon the requirement of physical embodiment in an article or thing in the definitions of "cinematograph", "copy", "record" and "sound recording". 13 Part IV Division 2 of the Act deals with the nature of copyright in (amongst other things) cinematograph films and television broadcasts, and sound broadcasts. Section 86 provides, insofar as presently relevant: 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 of the 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 seen in public, or, in so far as it consists of sounds, to be heard in public. Section 87 provides for present purposes: 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 visual images - to make a cinematograph film of the broadcast, or a copy of such a film; (b) in the case of a sound broadcast, or of a television broadcast in so far as it consists of sounds - to make a sound recording of the broadcast, or a copy of such a sound recording. 14 Section 101(1) of the Act links infringement of copyright for present purposes to the doing of any of the "acts" specified in s 86(a) and s 87(a) and (b). It provides: Subject to this Act, a copyright subsisting by virtue of this Part is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright. 15 Finally, s 111(1) and (2) provide: (1) This section applies if a person makes a cinematograph film or sound recording of broadcast solely for private and domestic use by watching or listening to the material broadcast at a time more convenient than the time when the broadcast is made. (2) The making of the film or recording does not infringe copyright in the broadcast or in any work or other subject-matter included in the broadcast. 16 There are two issues of construction which arise in relation to these various provisions. The first concerns the meaning of the words "to make" in s 86(a) and s 87(a) and (b). The second is whether the defence provided by s 111 applies only to the maker of the cinematograph film or sound recording or whether it can extend to a person who makes the copy not for his or her own "private and domestic use" etc, but the film etc is nonetheless made for such use by another. 17 To anticipate the second of these it is convenient to refer to the parliamentary evolution of the proposed s 111 in the Copyright Amendment Bill 2006 (Cth) and the reasons for such changes as were made to the proposed section. 18 The Explanatory Memorandum to the 2006 Bill in its original form indicated that the major reforms it was making to the Copyright Act were guided by seven principles, the first four of which were: the need for copyright to keep pace with developments in technology and rapidly changing consumer behaviour recognising reasonable consumer use of technology to enjoy copyright material; Australian consumers should not be in a significantly worse position than consumers in similar countries reforms should not unreasonably harm or discourage the development of new digital markets by copyright owners Australia has a unique regime that should be maintained 19 One group of amendments was a response to the proposals made in the Government's "Fair Use and Other Copyright Exceptions" review. The EM (p 3) explained that the exceptions contained in the Bill would (inter alia) better recognise the rights of consumers to enjoy certain copyright material they have legitimately acquired where this does not significantly harm the interests of copyright owners. 20 The Regulation Impact Statement in the EM identified "time-shifting" and "format shifting" of copyright material as problems requiring address. Under the heading "Private Copying" it said in part (at pp 6-7): One issue identified during the Fair Use review is the lack of provision in the Act of copying for private or personal use. This situation is increasingly out of step with consumer attitudes and behaviour. Technology is giving consumers new and more convenient ways to use copyright material, particularly for personal entertainment. Many consumer devices are designed so that users can easily copy and store copyright material. … A … common example of private copying is recording a broadcast to watch or listen to at a later time. Video cassette recorders have been used to time-shift analogue television broadcasts in Australian homes since the 1970's. Today a range of new consumer devices (eg DVD recorders, Personal Video Recorders, and digital TV tuner cards for PCs) are being marketed to simplify and encourage the private copying of television broadcasts. Legal action has not been taken by copyright owners in Australia to stop such private copying. Nevertheless, such acts usually infringe copyright. Many ordinary Australians do not believe that … "time-shifting" a broadcast for personal use should be legally wrong with a risk of civil legal action, however unlikely. Failure to recognise such common practices diminishes respect for copyright and undermines the credibility of the Act. 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 supply of personal recording devices by broadcasters of subscription television services is proving to be important for the development of digital television. The availability of personal recording devices is also likely to be important for digital radio. (Emphasis added.) 21 What was proposed was a new specific exception which would legitimise this common form of private copying by (at p 8): … allowing individuals in their homes to copy a broadcast for personal use to enable it to be viewed or listened to at a more convenient time. (Emphasis added.) This exception, it said, would benefit domestic consumers who would be assured time-shifting did not infringe copyright. It would also provide legal certainty for industries that "provide products and services that assist consumers carry out these copying activities". 22 What requires emphasis is that this EM and its proposed s 111 had as their focus "private copying" by individuals in "domestic premises" using "private recording devices". So the proposed s 111(1) provided: This section applies if a person makes a cinematograph film or sound recording of a broadcast: (a) in domestic premises; and (b) solely for private and domestic use by watching or listening to the material broadcast at a time more convenient than the time when the broadcast is made. 23 A subsequent amendment to the Bill resulted in a further amendment of relevance to s 111. The Supplementary Explanatory Memorandum indicated that the definition section (s 10) was now to include the definition of "private and domestic use" in the terms which are now in the Act. Such use could occur "on or off domestic premises". 24 A subsequent further amendment removed from s 111 the requirement that the recording of a broadcast for private and domestic use must be made "in domestic premises". 25 As the Further Explanatory Memorandum indicated (at [29]): 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 radio broadcasts on or off domestic premises. The revised wording of s 111 enables an individual to record broadcasts, as well as view and listen to the recording, outside their homes as well as inside for private and domestic use. 26 Section 111 had achieved the form in which it was enacted and now remains. 27 Because of its potential significance in this matter, reference needs to be made to an aspect of the law governing when two or more persons may be jointly and severally liable for a copyright infringement. 28 (i) Infringement of statutory copyright provisions has long been accepted as tortious. As such, infringement attracts the common law principles applied to joint tort feasors: see WEA International Inc v Hanimex Ltd (1987) 17 FCR 274 at 283; Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd (2009) 84 IPR 222 at [620]-[624]. 29 (ii) Joint infringers are two or more persons who act in concert with one another in the infringement pursuant to a common design: CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] 1 AC 1013 at 1057; Universal Music Australia Pty Ltd v Cooper (2005) 150 FCR 1 at [135]. 30 (iii) That two or more persons assist or concur in, or contribute to, an act causing damage to another is not of itself sufficient to found joint liability. There must be some common design: WEA International Inc at 283; a "concurrence in the act or acts causing damage": The "Koursk" [1924] P 140 at 159-160; Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 580-581; something in the nature of "concerted action or agreed common action": Universal Music Australia at [135].
THE AGREED FACTS AND THE "TV NOW" SYSTEM 31 The parties have not disputed the accuracy of his Honour's narration of the primary facts and, in particular, of how the TV Now system ("the Service") is configured and works and of how it is activated by a subscriber to it. What follows is drawn primarily from his Honour's reasons but in a much abbreviated form which suffices for present purposes. 32 (i) The decision to approve the capital expenditure to establish the infrastructure necessary for TV Now was taken at an Optus board meeting on 28 February 2011. The business case for the approval described this project as one enabling Optus "first to market with an innovative and disruptive TV & Video product to establish a leading position in the fast moving digital TV Industry": Emphasis added. 33 (ii) After its development the Service was made available to Optus 3G mobile prepaid and individual account customers and, subject to restrictions, to the employees of small and medium business customers who had mobile devices supported by the business' subscription. The Service is by a subscription and is available only in the five mainland State capital cities. Three plans are offered to a subscriber: a basic plan for 45 minutes free recording; a standard plan for about $7 a month for about 5 hours recording; and a premium plan for about $10 per month for 20 hours recording. Optus solicits eligible customers to subscribe to this Service through Optus' My Zoo homepage. 34 (iii) The process involved in subscribing is described in the trial judge's reasons in detail. It is done online, using a PC or compatible mobile device; there is a user ID requirement for use of the Service; and subscription requires intending subscribers to acknowledge they have read and agreed to the terms and conditions prescribed. Both the various descriptions of TV Now encountered as one navigates the TV Now website and the terms and conditions of subscription personalise what subscription provides as for example: Optus TV Now allows you to record and store television shows. The terms also address "special liability issues" the burden of which is to describe the limitations on the use which can be made of the recordings made. These crystallised in the concluding sentences: You are advised that it is a breach of copyright to make a copy of a broadcast other than to record it for your private and domestic use by watching the material broadcast at a more convenient time. You must not copy any information from Optus TV Now or from the Electronic Program Guide. Optus accepts no responsibility for copyright infringement. You indemnify Optus against claims for copyright infringement from copyright owners. 35 (iv) The recording and view service can be effected on any one or more of four Optus compatible types of device operated by the subscriber. They are (i) a personal computer; (ii) an iPhone or iPad; (iii) Android mobile devices; and (iv) most 3G mobile phones. In the process of recording a broadcast four copies are made. The reason for this is to allow the broadcast to be played back on any one of the above four types of device which the subscriber then happens to be using. There are examples in the evidence of a subscriber using one type of device when selecting the programme to be recorded and then using another, or several others, when viewing that programme. It is to be noted in passing that a subscriber is not told that four copies are made and it is to be inferred that he or she would, as a rule, be unaware that such was the case. 36 (v) Once a subscriber has signed up for the Service, that person can log in and is then directed to an electronic programme guide which is used to look for and to select the programme to be recorded. As his Honour aptly put it (at [21]): In essence, from the user's 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. When the subscriber later wants to view a recorded programme, he or she can do so on any of the four kinds of compatible device supported by the Service. Having logged in and selected the programme now to be watched, the TV Now system detects the particular kind of device the subscriber is then using and transmits a stream of data in the form suitable for that device from one of the four recordings of the programme held in Optus' data centre. If the subscriber later wishes to view some or all of the programme on another compatible device, the system will respond accordingly. 37 (vi) The essential features of TV Now's infrastructure system and of its components are described in eight paragraphs of the trial judge's reasons which, gratefully, can be reproduced here: 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 proprietary format used by Apple devices (QuickTime Streaming) …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 [media application control framework] 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 a virtual 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. 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 user's unique identifying number (user ID). Every time a user instructs the TV Now service to record a program the MACF server generates both a new schedule ID for that user's 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. 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 user's 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. 38 (vii) The parties have agreed certain facts for the purposes of the proceedings which are sufficient to found the controversy between them. These relate to the making of free-to-air broadcasts of AFL and NRL matches on specified days; the various copyright interests the appellants have in those broadcasts and films; the particular TV Now subscribers who selected and recorded football matches on those days and the time or times at which the respective subscribers viewed their recorded programme.
(i) The trial judge's decision 42 The respective contentions of the parties at trial were, first (by AFL, NRL and Telstra) that Optus made the infringing copies of the broadcasts in issue and later communicated them to the subscribers who selected them; and, secondly (by Optus), that the respective subscribers made them and played them without any infringement of copyright because of the exception for private and domestic recording in s 111 of the Act. The trial judge accepted Optus' contention. 43 His Honour considered that the ordinary and natural meaning of "makes" and "making" as used in s 111(1) and (2) was "to create" by initiating a process utilising technology or equipment that recorded the broadcast. The subscriber made each of the copies in the four formats when he or she clicked on the "record" button on the electronic programme guide. The subscriber alone was responsible for the creation of the copies. No copies were made unless a subscriber required this to be done. The service that Optus offered was substantively no different from a VCR or DVR. This analogy, it should be noted, had been drawn in United States decisions and, notably for present purposes, Cartoon Network LP, LLLP v CSC Holdings Inc 536 F 3d 121 at 131-132 (2nd Cir 2008) which is considered later in these reasons. It was adopted as well by the Court of Appeal of Singapore in Record TV Pte Ltd v MediaCorp TV Singapore Pte Ltd [2011] 1 SLR 830 at [16] and [21]-[22]. His Honour referred approvingly to both decisions. We would note in passing that the appropriateness of the analogy itself as well as the broader reasoning in Cartoon Network, has been questioned in the US copyright scholarship: see Ginsburg, "Recent Developments in US Copyright Law - Part II, Caselaw: Exclusive Rights on the Ebb?" (2008) Columbia Public Law & Legal Theory Working Papers, Paper 08158. 44 His Honour further commented that the concept of "making a film or recording" in s 111 was not concerned with the technological or other means by which that result is created. Rather (at [64]) - It is unlikely that the Parliament intended to confine, in a presumptive way, the technology or other 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. 45 To the extent that independent consideration was given to Optus' Service, it was said it provided a subscriber with the means to make a copy. Optus was in an analogous position to the University in University of New South Wales v Moorhouse (1975) 133 CLR 1 which supplied a photocopier for use by students in a library. As Gibbs J said in that case (at 11), it was "impossible to hold" that the University did the act of photocopying when the student copied part of a book in its library.
(ii) The parties' contentions 46 The issue of who made the copies is antecedent to the s 111 inquiries as to whether (a) the statutorily prescribed purpose informed their making and (b) the section could be invoked by the actual maker if it was not the user of the copies. The appellants in the two appeals now contend that the maker of a copy was Optus (or Optus and the subscriber jointly), the AFL going on to emphasise that the copies were made on, and stored in, the Service's NAS computer. They accept the term "make" can have nuanced differences in meaning depending on the context in which it is used: see the Macquarie Dictionary, "make". The proposed meanings they give it in the context of s 86(a), s 87(a) and (b), of s 101 (derivatively) and, for that matter, s 111 are (a) "To produce (a material thing) by giving a certain form to a portion of matter": AFL relying on The Oxford English Dictionary's primary usage of the senses in which the object of the verb "make" is a "product or thing": see OED Vol IX "make", 235 (2nd ed); and (b) variously, "to bring into existence by shaping material", or "to bring into a certain form", "to create": NRL and Telstra relying on the Macquarie Dictionary. 47 The appellants in substance contended that his Honour erred (i) in approaching the maker question through s 111; (ii) in finding that the subscriber alone did the acts involved in making a copy; (iii) in analogising the Service with a VCR, a DVR or a photocopier used by a third party; (iv) in disregarding Optus' heavy involvement in the creation of the copies, its responsibility for ensuring that a copy was made following a user's request and that Optus designed and maintained the system including its automation; (v) in relying upon US authority which, as will be seen, has a different jurisprudential context; (vi) in not concluding that Optus, rather than the subscriber, physically embodied the film etc copied (and hence "made" it) and, in any event, that Optus performed the last act necessary for the recording to be made (ie by its server informing its recording controller that the request to record had been made); (vii) in approaching the question as one of policy, as the overseas authorities relied upon appeared to, rather than as an orthodox question of statutory construction; and (viii) in not appreciating the significance of four copies, not one, being made. 48 Optus seeks to uphold the primary judge's findings. It emphasises that the person who made the copy was the person who did the act of making, eg by selecting the material to be copied and by initiating the other acts to create the copy. Optus merely provided the automated service by which the recording could be made. The dictionary definitions on which Optus relies in preference to the OED definition are drawn from the Macquarie Dictionary. They are "to produce by any action or causative agency", "to cause to be or become" and "to cause, induce or compel (to do something)". While Optus made four copies (none of which it used itself), this was to cover all of the contingencies of use of them the subscriber might make having regard to the compatible devices that, potentially, could be used to access the recordings. That Optus designed the Service and gave it its functionality, it is said, did not necessarily result in its being the maker of copies made using that functionality. Likewise the commercial nature of the Service provided is of no relevance to the identification of the maker of recordings using it.
(iii) Consideration 49 The question to be answered is easily stated: "Who 'does' the act of copying?": Copinger and Skone James on Copyright, 7-21 (16th ed, 2011). Its answering is the less easy because of the sophistication of the automated technologies used and the electronic communications made. Yet a legal person has to be identified who or which does that act. Considering the matter from the standpoint of s 101 of the Act, this identification requires an analysis both of who does what, when and where and of how the TV Now system itself functions. The rival contenders are Optus, the subscriber, or Optus and the subscriber jointly. Each can be advanced with varying plausibility in the circumstances as the person(s) who does the act of copying. 50 The first matter to be noted is Optus' TV Now Service itself. Optus designed it; gave it its functionality; owned the intellectual property in it (according to the board minutes of 28 February 2011); and marketed the service it provided to its customers. The system itself was configured so as to be able to receive, copy, store and permit the viewing of on compatible mobile and PC devices, the free-to-air broadcasts of the 15 TV channels in each of the five mainland State capitals. And it was fully automated. Its function in short was to receive, copy, store and stream to a subscriber's device, programmes required by a subscriber to the TV Now service. 51 It is unnecessary to describe again the process by which an individual Optus customer became a subscriber to this service and its three optional plans. What is clear is that the terms of the Optus-subscriber relationship were contractual in character. It again is unnecessary to consider here how these terms fitted into the larger contractual web between Optus and its customers. The terms and conditions to which the subscriber was required to agree personalised what the Service offers to a subscriber: it "allows you to record and store television shows. You can then access those recordings for a limited period"; it "is for your individual and personal use": italics in original. There is obvious licence and colloquialism in the language so used. The subscriber does not "store" television shows. Optus stores copies. To say that the subscriber "records" such shows and that Optus TV Now is for the subscriber's "use", are familiar and unexceptionable uses of language, but they by no means ordain the character of what a subscriber does (eg "records") and of the subscriber's relationship to the system itself (eg a "user" of it). 52 Before turning to how the act of copying fits within the Optus-subscriber relationship, one additional matter requires notice. Optus at all times retained possession, ownership and control of the physical copies made on the hard disc of its NAS computer until they were deleted by Optus after the expiry of 30 days from recording or by the subscriber before then. Viewing of the programmes copied was achieved by way of streaming the appropriate compatible version of playback data to the user's device. No data, no copies of the programme, were thereby stored in that device in any permanent form in that process. 53 There are four possible characterisations of the maker of the copies in this matter: (i) they were made by Optus but as agent for the subscriber; (ii) they were made by the subscriber as a principal using a facility made available by Optus pursuant to its contract with the subscriber; (iii) they were made by Optus as a principal using its own technology but subject to its contractual obligation to store and to allow subscriber viewing of the recordings so made at the time(s) of his or her choosing; or (iv) they were made jointly by Optus and the subscriber both of whom, consistent with their contract, acted in concert with one another pursuant to a common design to have a broadcast copied on Optus' technology and made available to be viewed by the subscriber.
(i) Agency 54 This possibility can be dismissed shortly. It seems only to have been raised by Optus in its appeal submissions and then only faintly. That the relationship of the subscriber and Optus in relation to the making of copies could be that of principal and agent, has no resonance at all either in the TV Now terms and conditions or, more generally, in the customer-service provider relationship of the parties. The invocation of agency here calls to mind Lord Herschell's comment in Kennedy v De Trafford [1897] AC 180 at 188 that "[n]o word is more commonly and constantly abused than the word 'agent'": see also Scott v Davis (2000) 204 CLR 333 at [227]. Even if Optus could properly be characterised as making the copy as agent, it would, nonetheless, "make the copy" and be jointly and severally liable with the subscriber for that making: see Dal Pont, Law of Agency, [24.8] (2nd ed, 2008).
(ii) The subscriber as principal 55 This is in essence what the primary judge has held and underpins Optus' submission. Put shortly, it is that Optus makes available to a subscriber a facility (a service) which enables the subscriber as and when he or she is so minded to use that facility to record broadcasts and later to view them. The copies that are made are the result of the subscriber's use of the facility though the actual making of them requires Optus' technology to function as it was designed to. 56 Underpinning this is a particular conception of what "make" means - a conception which robs the entirely automated copying process of any significance beyond that of being the vehicle which does the making of copies. As the primary judge put it, "make" means "to create" by selecting what is to be recorded and by initiating a process utilising technology or equipment that records the broadcast: Reasons [64]. Or, as Optus put it in submissions, it means "to cause, induce, or compel": the subscriber was the "causative agency" in the making of copies. 57 There are two additional matters relied upon in support of the contention that the subscriber is the maker. The first relates to the technology itself. It is that it is analogous, as his Honour suggested, to devices which can be used to make a copy of copyright material but which when so used by a third party do not result in the person who made, sold or hired out the device in question or in whose possession or control the device remains, being held to be the "maker" of that copy. His Honour instanced the photocopier provided by the University to student copiers in Moorhouse, having earlier observed that the "service that TV Now offers the user is substantively no different from a VCR or DVR": Reasons [63]. The second matter, which flows from the facts that the subscriber both selects the programme to be copied and initiates the process of copying, is that the subscriber's is the last "volitional act" in the sequence of acts leading to a copy being made and, for that reason, is significant in determining the identity of the maker - the more so as a s 101 infringement requires a "person" to do or authorise the doing of, any "act" comprised in the copyright. 58 We consider that there are several reasons for rejecting the proposition that the subscriber was the maker for s 101, hence s 111, purposes. First, the meaning given "make" is, in our view, a contrived one. When s 86(a) refers to making a "copy" of a film, when s 87(a) refers to making a cinematograph film of a television broadcast or a copy of the film, when s 87(b) refers to making a sound recording or a copy of such, they each are referring to so acting as to embody images and sound in an "article or thing" (see the s 10 definitions of "cinematograph film" and "copy") or a "record". In our view "make", as it appears in s 86(a) and s 87(a) and (b), is a fundamental concept underpinning the Act and the essence of it is the idea of making (ie creating or producing) a physical thing (ie the embodiment of the copyright subject matter). We agree with the AFL's submission to this effect. The OED definition with its emphasis on producing a "material thing" is an apt one for the purposes of s 86(a) and s 87(a) and (b) - and hence for s 101(1) and s 111 of the Act. In saying this we do not discountenance the need for there to be a causative agency if a copy of a particular thing is to be made. The issue is not simply how something is made. It is by whom is it made. This, as will be seen, is of some importance when we come to consider whether copies were made by Optus and the subscriber jointly. 59 The second reason for rejecting the proposition that the subscriber alone is the maker relates to how the system itself works. This is better discussed when considering whether Optus itself is the maker. We merely note here that a subscriber's clicking on a button labelled "record" may trigger a sequence of actions which result in copies of a selected programme being made, but it does not necessarily follow that the subscriber alone makes that copy. 60 Thirdly, analogies are not necessarily helpful in this setting because they both divert attention from what the TV Now system has been designed to do and pre-suppose what is the function (albeit automated) it performs in the ongoing Optus-subscriber relationship. To anticipate matters, we consider that the system itself has been designed in a way that makes Optus the "main performer of the act of [copying]" (to adopt the language used in a recent Japanese decision involving a service relevantly similar to the present, which has been supplied to the Court in translation): see Rokuraku II, First Petty Bench of the Supreme Court, Japan, 20 January 2011. 61 Fourthly, there is some division between federal courts in the United States as how properly to differentiate between "direct" and "contributory" liability for copyright infringement where automated technologies are employed to make copies of copyright material: contrast eg Cartoon Network LP, LLLP and Wolk v Kodak Imaging Network Inc 2012 WL 11270 at 17-18 (SDNY) with Arista Records LLC v Myxer Inc 2011 US Dist Lexis 109668 at 12-13. In distinguishing the two forms of liability - a distinction which is of no concern to this Court in these appeals - the "volitional conduct" concept (and as well, the analogies with photocopier use by third parties and use of VCRs and DVRs) have been deployed. 62 So, in Cartoon Network (at 131-132) the United States Court of Appeals, Second Circuit, commented: [V]olitional conduct is an important element of direct liability … In determining who actually "makes" a copy, a significant difference exists between making a request to a human employee, who then volitionally operates the copying system to make the copy, and issuing a command directly to a system, which automatically obeys commands and engages in no volitional conduct … Here, by selling access to a system that automatically produces copies on command, Cablevision more closely resembles a store proprietor who charges customers to use a photocopier on his premises, and it seems incorrect to say, without more, that such a proprietor "makes" any copies when his machines are actually operated by his customers. 63 Whatever utility the volitional conduct concept has in distinguishing the two forms of infringement (given the need to do so in US jurisprudence), its adoption in this country would, in our view, require a gloss to be put on the word "make" in s 86(a) and s 87(a) and (b) of the Act. The need for so doing is not apparent to us, the more so because we have our own legislative and common law devices for imposing liability on third persons who are implicated or join in the infringing acts of another as, for example, by authorising the doing of such acts: see Copyright Act, s 101(1) and (1A) or by acting in concert with another to infringe copyright in pursuit of a common design: see eg Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd at [620]-[624]; and see below (iv) Optus and the subscriber jointly? 64 It equally is not apparent to us why a person who designs and operates a wholly automated copying system ought as of course not be treated as a "maker" of an infringing copy where the system itself is configured designedly so as to respond to a third party command to make that copy: see generally the criticism of Cartoon Network in Ginsburg, at 15-18. 65 Although we have concluded that the subscriber cannot properly be said to be the maker of the copies in this matter, we return below to the question whether the subscriber can nonetheless be said to have acted jointly with Optus in making the copies.
(iii) Optus as the maker 66 It is the case that no copies will be made of a programme unless the subscriber selects that programme to be recorded and communicates his or her confirmation of that selection to Optus, albeit by an electronic communication to its MACF servers. In at least this "but for" sense, the actions of the subscriber are causative of a recording later being made. Optus places emphasis on the necessity for that action of the subscriber, as well as the action of Optus, in setting up the system, in causing that recording to be made and, subsequently, causing the recording to be communicated to the subscriber. An Optus employee cannot press the record button. However, once that communication is made, the automated processes described by his Honour come into play - the server enters or creates a schedule ID in respect of the programme selected and the user's unique identifying number in the user database; the recording controllers poll that database once a minute enquiring whether any users have scheduled the recording of any programme due to be broadcast at the time of polling; when the poll so identifies that the user's selection is due to be broadcast, the MACF server informs the recording controllers which then cause four recordings to be made on the NAS hard disk - ie the timing of the recording coincides with Optus' recording controller causing the recording to be made, rather than when the subscriber communicates its selection to Optus. 67 Accepting as we do the appropriateness of the OED definition for the purposes of s 86, s 87 and s 101, we consider that Optus' role in the making of a copy - ie in capturing the broadcast and then in embodying its images and sounds in the hard disk - is so pervasive that, even though entirely automated, it cannot be disregarded when the "person" who does the act of copying is to be identified. The system performs the very functions for which it was created by Optus. Even if one were to require volitional conduct proximate to the copying, Optus' creating and keeping in constant readiness the TV Now system would satisfy that requirement. It should also be emphasised that the recording is made by reason of Optus' system remaining "up" and available to implement the subscriber's request at the time when its recording controllers poll the user database and receive a response indicating that a recording has been requested. What Optus actually does has - a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner … trespassed on the exclusive domain of the copyright owners: CoStar Group Inc v LoopNet Inc 373 F3d 544 at 550 (4th Circ. 2004). We would note this was quoted in Cartoon Network at 130. 68 Put shortly Optus is not merely making available its system to another who uses it to copy a broadcast: cf CoStar Group Inc at 550. Rather it captures, copies, stores and makes available for reward, a programme for later viewing by another: cf New York Times Co Inc v Tasini (2001) 533 US 483 at 504; and see Ginsburg at 15-16. 69 The real issue in consequence is whether Optus alone does the act of copying or whether Optus and the subscriber are jointly and severally responsible for that act.
(iv) Optus and the subscriber jointly? 70 The appellants' preferred characterisation of the Optus-subscriber relationship was that it was one in which Optus undertook to provide recordings of such free-to-air television programmes as the subscriber required to be recorded from time to time, the programmes after recording to be available to be viewed at the time or times of the subscriber's choosing on any one of four types of Optus compatible mobile phone or PC. It was, in short, a service for which Optus solicited subscribers and in which it was obliged to provide recordings for viewing of programmes the subscriber required to be recorded. 71 As the recording could only occur as and when the broadcast occurred of the programme sought but that programme itself had to be notified to Optus in advance, Optus established the wholly automated system, described above, which it so configured that the required recording did occur. If that part of the system embodied the steps taken by Optus to ensure that the required programme was recorded at the right time for the subscriber who required it, then the selection and notified confirmation by the subscriber of the programme required to be recorded could be said to be merely the necessary pre-condition to be satisfied to activate Optus' obligation to perform its service. If this be correct, then Optus can properly be identified as the maker of the copies of the recording. As the AFL has put it, Optus' data centre carries out the user's instruction to record a programme; it records that programme. In other words, if analogies are helpful in this particular setting (which we doubt), Optus is to be analogised with a commercial photocopier which copies copyright material provided to it for copying by it. 72 We would add that the circumstance of Optus making four copies to accommodate the four types of compatible playing devices on which a programme could be viewed lends support to this particular "service provision" conclusion. The parties ordinarily would not have agreed which device would be used to provide the viewing platform. Optus of necessity thus had to make four copies if it were to be able to discharge its obligation to provide the service required in all cases. It is difficult to characterise the subscriber, in using the service, as in all cases making four copies of the programme selected, some at least of which copies are likely to be of no use at all to him or her, in circumstances where the subscriber is probably unaware of the making of the four copies. 73 To view the matter in contractual terms, the terms and conditions of the Service are quite unyielding of any clear indication as to what actually is the true character of the parties relationship. Reference has already been made to the ambiguities, inaccuracies and colloquialism in formulae such as the system "allows you to record and store television shows". The system is "for your individual and personal use". Indeed the terms of the contract in this regard are in large measure unarticulated and must be inferred or implied if the agreement is to be given relevant content: cf Hawkins v Clayton (1988) 164 CLR 539 at 570-571. This said, it is more probable than not that a reasonable person, knowing the circumstances available to both parties, would characterise the relationship agreed between the parties (ie would infer or impute to them) that it was a contract by Optus to provide a service such as we have described above. 74 However, the contractual allocation of functions and responsibilities in making a copy of copyright material may, but does not necessarily, identify the person (or persons) who "make(s)" the copy for copyright infringement purposes. The making of the copy may be the product of the concerted action of both parties to the contract such that they together are the "makers" of the copy. 75 So one comes back to the question of construction raised by the word "make" and its application in the present setting. As we have indicated, Optus not only has solicited subscriber utilisation of its Service, it has also designed and maintained a sophisticated system which can effectuate the making of recordings wanted for viewing by subscribers. For s 101 purposes, it manifestly is involved directly in doing the act of copying. It counts as a maker of copies for the subscriber. Does the subscriber as well? 76 If one focussed not only upon the automated service which is held out as able to produce, and which actually produces, the copies but also on the causative agency that is responsible for the copies being made at all, the need for a more complex characterisation is suggested. The subscriber, by selecting the programme to be copied and by confirming that it is to be copied, can properly be said to be the person who instigates the copying. Yet it is Optus which effects it. Without the concerted actions of both 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. They have needed to act in concert to produce - they each have contributed to - a commonly desired outcome. The subscriber's contributing acts were envisaged by the contractual terms and conditions. How they were to be done were indicated by the prompts given on the Optus TV Now TV guide page. The common design - the production of the selected programme for transmission to the subscriber - informed the solicitation and the taking of a subscription by the subscriber; it was immanent in the service to be provided. 77 In consequence, they could both properly be said to be jointly and severally responsible for the act of making the copies. 78 While it is not strictly necessary for us to determine whether Optus alone is, or Optus and the subscriber are, the maker(s), our preferred view would be that both Optus and the subscriber, acting together, were the makers of the copies.
(iv) Conclusion 79 We have concluded that each cinematograph film and sound recording of the broadcasts and copies of the films in the Agreed Facts which was brought into existence after a subscriber had clicked the "record" button on that subscriber's Optus compatible device, was not made by the subscriber alone. It was made either by Optus alone or by Optus and the subscriber.
Policy and a technologically neutral interpretation 94 Two matters bearing on interpretation have been themes in the case put by the respondent. They have some resonance both in the primary judge's reasons and in the United States and Singaporean case law on which he relied. The first is what has been described as "technologically neutral interpretation"; the second is what can be described as "interpretation informed by legislative policy". 95 The desirability of technological neutrality - of not limiting rights and defences to technologies known at the time when those rights and defences were enacted - has been acknowledged for some time. So it was, for example, that one declared objective stated in the Explanatory Memorandum to the Copyright Amendment (Digital Agenda) Bill 1999 (Cth) was: To replace technology-specific rights with technology-neutral rights so that amendments to the Act are not needed each time there is a development in technology. 96 We are conscious that the construction which we are satisfied the language of s 111 requires is one that is capable of excluding, and does in fact in this instance exclude, a later technological development in copying. However, no principle of technological neutrality can overcome what is the clear and limited legislative purpose of s 111. It is not for this Court to re-draft this provision to secure an assumed legislative desire for such neutrality: R v L (1994) 49 FCR 534 at 538. 97 This, in turn, brings into focus more generally what we have called interpretation informed by legislative policy. In varying guises and to differing extents, this has been a tool of statutory interpretation for many centuries. Its historical exemplar was the doctrine of the "equity of the statute": see Nelson v Nelson (1995) 184 CLR 538 at 552-554; Comcare v Thompson (2000) 100 FCR 375 at [40]-[43]. Its principal modern manifestation is in that form of purposive construction enjoined by s 15AA of the Acts Interpretation Act 1901 (Cth). However, if the apparently confined words of a statute are to be given a more extended scope, not only must they be capable as a matter of language of sustaining such an extension, there must also be some indication in the legislation, its purpose and context of whether, and if so how, the legislature would wish to extend what, on its face, is the confined scope of the statute or of a section of it: see Woodside Energy Ltd v Federal Commissioner of Taxation (2009) 174 FCR 91 at [51]. 98 What a court cannot do, as the plurality in the High Court recently emphasised in Australian Education Union v Department of Education and Children's Services [2012] HCA 3 at [28] is to adopt: … a judicially constructed policy at the expense of the requisite consideration of the statutory text and its relatively clear purpose. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose. And even if legislative purposes are discernible, it is salutary to remember, as was said in Rodriguez v United States 480 US 522 at 525-526 (1987): … no legislation pursues its purposes at all costs. Deciding what competing values will or will not be sacrificed to the achievement of a particular objective is the very essence of legislative choice - and it frustrates rather than effectuates legislative intent simplistically to assume that whatever furthers the statute's primary object must be the law. 99 In the present matter such are the conflicting interests and values, such are the possible consequential considerations of which account might need to be taken that, if a choice is to be made to extend or otherwise modify an exception such as s 111, this requires a legislative choice to be made, not a judicial one.
CONCLUSION 100 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. 101 We will order that in both appeals: (1) The appeal be allowed. (2) The declarations and orders 1 to 5 made by the primary judge be set aside. We will direct that, in each appeal, the respective appellants bring in draft minutes of consequential orders on or before 4 May 2012 to give effect to these reasons. I certify that the preceding one hundred and one (101) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Finn, Emmett and Bennett.
National Rugby League Investments Pty Limited
Singtel Optus Pty Ltd
Cases cited: WEA International Inc v Hanimex Ltd (1987) 17 FCR 274 cited Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd (2009) 84 IPR 222 cited CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] 1 AC 1013 cited Universal Music Australia Pty Ltd v Cooper (2005) 150 FCR 1 cited The "Koursk" [1924] P 140 cited Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 cited Cartoon Network LP, LLLP v CSC Holdings Inc 536 F 3d 121 (2nd Cir 2008) not followed University of New South Wales v Moorhouse (1975) 133 CLR 1 distinguished Kennedy v De Trafford [1897] AC 180 cited Scott v Davis (2000) 204 CLR 333 cited Rokuraku II, First Petty Bench of the Supreme Court, Japan, 20 January 2011 cited Wolk v Kodak Imaging Network Inc 2012 WL 11270 (SDNY) cited Arista Records LLC v Myxer Inc 2011 US Dist Lexis 109668 cited CoStar Group Inc v LoopNet Inc 373 F3d 544 (4th Circ 2004) cited New York Times Co Inc v Tasini 533 US 483 (2001) cited Hawkins v Clayton (1988) 164 CLR 539 cited CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 cited Avel Pty Ltd v Attorney-General for New South Wales (1987) 11 NSWLR 126 cited R v L (1994) 49 FCR 534 cited Nelson v Nelson (1995) 184 CLR 538 cited Comcare v Thompson (2000) 100 FCR 375 cited Woodside Energy Ltd v Federal Commissioner of Taxation (2009) 174 FCR 91 cited Australian Education Union v Department of Education and Children's Services [2012] HCA 3 cited Rodriguez v United States 480 US 522 (1987) cited
(1987) 17 FCR 274
(2009) 84 IPR 222
(2005) 150 FCR 1
(1996) 186 CLR 574
(1975) 133 CLR 1
(2000) 204 CLR 333
(1988) 164 CLR 539
(1997) 187 CLR 384
(1987) 11 NSWLR 126
(1994) 49 FCR 534
(1995) 184 CLR 538
(2000) 100 FCR 375
(2009) 174 FCR 91
[2012] HCA 3