Issue 1 : Consideration
58 A person needs to employ technical equipment to make a film of a broadcast. Section 111(1) does not require the person who makes the film to have any particular relationship, such as ownership, to the equipment by which it is made. The Parliament must have contemplated that a variety of techniques and technical equipment could be used by a person to make a film of a broadcast. Since the 1980s households have had an evolving array of recording equipment capable of making a film, or in popular parlance "copying", what is broadcast on television. Since the House of Lords decided CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013, copyright legislation has had to balance the legitimate interests of the makers of original works and of ordinary citizens who use technological advances to copy those works for their own use in their private or domestic lives. In that case their Lordships refused to prohibit sales of blank tapes, recorders or similar electronic equipment that were capable of making copies of another's copyright work merely because people might use these in their own homes to make copies of such work, rather than work not protected by copyright. Mere sale of articles that have lawful uses does not constitute authorisation of infringement of copyright, even if the manufacturer or vendor knows that there is a likelihood that the articles will be used for an infringing purpose, such as home recording, so long as the manufacturer or vendor has no control over the purchaser's use of the article: Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 498 per Mason CJ, Brennan, Deane and Gaudron JJ.
59 As Gleeson CJ, Gummow, Hayne and Heydon JJ acknowledged in Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193 at 213 [54], because of the complex nature of the intangible form of property that it creates, copyright legislation in Australia and elsewhere gives rise to difficult questions of construction. The task of construction requires the Court to discern where the Parliament drew an enforceable line between the exclusive rights to exploit the proprietary interest it created and conferred on the owner of copyright in a work and the ability of others to use and copy that work. Amstrad [1988] AC 1013 recognised the somewhat symbiotic love-hate relationship between the entertainment industry, the electronics and communications industries and the consuming public. The entertainment industry, of which the AFL and NRL are part, wants to exploit and maintain its exclusive rights over its output. The electronics and communications industries want to sell their products and services to enable the public to see and hear and, of course, copy what the entertainment industry is exploiting. The public want to utilise the latest that technology has to offer to see and hear the entertainment as often as they desire, using whatever medium is most convenient.
60 The daily life of persons in Australia and many other countries has transformed over the last 20 years with advances in technology. Indeed, the subject matter of these proceedings would have been unimaginable two decades ago. Now, a person using a mobile phone, that can sit in the palm of his or her hand, can watch a recorded, or even near live, football game or other entertainment program that had been, or is being, broadcast on free to air television. The technology used by the TV Now service does not allow a user to download or copy any recorded, or near live, program onto his or her compatible device. The technology does allow a copy to be created, at the instance of the device's owner or user, and stored by Optus' infrastructure.
61 A person who makes a recording of a broadcast for his or her personal and domestic use, solely for the purpose of viewing or listening to it at a more convenient time, is described as having "time-shifted" the broadcast: cf: Laddie, Prescott & Vitoria, The Modern Law of Copyright and Designs (Vol 1, 4th ed, LexisNexis, 2011) at p 913 [21.107].
62 Who "makes" the copy for the purposes of the Copyright Act in a situation like that provided by the TV Now service? In some ways, this question resembles the old conundrum of which came first: the chicken or the egg? Different courts confronted by a similar dilemma to that presented here have approached it by recognising that identification of a policy choice may be a key to construing whether an infringement of copyright has occurred: cp, on the one hand, Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 218 CLR 273 at 287 [29] per McHugh A-CJ, Gummow and Hayne JJ; Cartoon Network LP, LLLP v CSC Holdings Inc 536 F 3d 121 at 138 (2008: CA 2), Record TV Pte Ltd v MediaCorp TV Singapore Pte Ltd [2011] 1 SLR 830 at 859-860 [69] per VK Rajah JA with, on the other hand, the view of the district judges in Twentieth Century Fox Film Corporation v Cablevision Systems Corporation 478 F Supp 2d 607 (2007 SD NY) at 617-620 (who was reversed by the Second Circuit Court of Appeals in Cartoon Network 536 F 3d 121), and Arista Records LLC v Myxer Inc (C.D. Ca unreported 1 April 2011; 2011 US Dist LEXIS 109668) at p 19.
63 I am of opinion that the user of the TV Now service makes each of the films in the four formats when he or she clicks on the "record" button on the TV Now electronic program guide. This is because the user is solely responsible for the creation of those films. He or she decides whether or not to make the films and only he or she has the means of being able to view them. If the user does not click "record", no films will be brought into existence that he or she can play back later. The service that TV Now offers the user is substantively no different from a VCR or DVR. Of course, TV Now may offer the user a greater range of playback environments than the means provided by a VCR or DVR, although this can depend on the technologies available to the user.
64 The ordinary and natural meaning of "makes" and "making" in the sense in which those words are used in s 111(1) and (2) is "to create" by initiating a process utilising technology or equipment that records the broadcast. No doubt a director could be said to "make" a film as his or her creation of an original work in the sense of "make", as that word is used in s 22(4). But, s 111 is dealing with an individual creating a film, being a copy of a broadcast by using some available technology or equipment to reproduce someone else's original work. The complexity of making a recording or film of a broadcast requires the person referred to in s 111(1) to use a means external to himself or herself to do so. The concept of "making a film or recording" employed by s 111(1) and (2) is concerned with the creation by one person of a copy of a second person's original work so that, as a result, a film or recording is brought, somehow, into existence by the first person's action. The concept is not concerned about the technological or other means by which that result is created. 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.
65 The legislative materials do not support the rightholders' argument that, in effect, the user could only utilise technology or equipment with which he or she had some greater connection than the "record" button on the TV Now electronic program guide. The Parliament intended that an individual should be able to time-shift by making a copy of a broadcast that he or she could watch or listen to at a more convenient time. The TV Now service provides the user with a means for him or her to make a film of a broadcast. As the Minister said in moving the amendment of s 111, it was intended to provide greater flexibility in the conditions that apply to time-shifting, allowing recording of films by individuals inside or outside their homes. VK Rajah JA, giving the judgment of the Singapore Court of Appeal in Record TV [2011] 1 SLR at 841 [21], described the differences between "traditional" VCRs and DVRs, on the one hand, and technology similar to that in Optus' infrastructure for the TV Now service on the other, as follows:
"The fundamental objective of time-shifting is to allow a show to be recorded on a storage medium so that it may be viewed or listened to at the consumer's convenience after it is broadcast. This is a perfectly legitimate activity so long as it does not constitute copying copyright-protected material or communicating such material to the public contrary to copyright laws."
66 Here, the only person who could cause the Optus datacentre to bring into existence or create the films in the four formats was the user who clicked the instruction "record" on his or her compatible device. I agree with the reasoning of the Second Circuit Court of Appeals in Cartoon Network 536 F 3d at 131 that there is no real or sufficient distinction between the characterisation of a user of a service, like TV Now, to record a film of a broadcast and a person who uses a VCR (or DVR) to do so, as the person who makes the copy of the work alleged to be an infringement of another's copyright. The Court of Appeals did not consider that a service provider should be made liable for directly infringing a rightholder's copyright simply by offering a service that makes copies automatically upon a user's command.
67 Moreover, because of the way the TV Now service is designed, a film cannot be made unless a user clicks the "record" button. In University of New South Wales v Moorhouse (1975) 133 CLR 1 the High Court held that a student had infringed the copyright of an author by photocopying part of his book on a photocopier provided by the University in its library. However, the Court also held that the University was secondarily liable for authorising the infringement. That was because it had power to control the copying activity on its machines but failed to take steps to prevent infringement, while providing potential infringers with copyright material and the use of its machines by which infringing copies could be made: Australian Tape Manufacturers 176 CLR at 498 per Mason CJ, Brennan, Deane and Gaudron JJ; Moorhouse 133 CLR at 17 per Gibbs J, 22-23 per Jacobs J with whom McTiernan ACJ agreed. Critically, for present purposes, Gibbs J said that it was "impossible to hold" that the University did the act of photocopying when the student copied the part of a book in its library (133 CLR at 11).
68 In my opinion, there is a reasonable analogy between the University's provision of the photocopier and Optus' provision of the TV Now service. Each of them provided a means for a third person - a student or a user - to make a copy or a film. But, as Gibbs J reasoned, it was impossible to say that the University did the act of photocopying by providing the photocopier, just as, in my opinion, it is impossible to say that Optus makes any of the films in the four formats that are created when a user clicks "record" and its datacentre carries out that instruction.
69 The rightholders made a faint submission, that became much fainter in oral argument, that s 22(4) supported their argument that Optus made the films in the four formats. They accepted that the original purpose of s 22(4) was to deal with the subsistence and ownership of copyright in films. Having regard to the legislative history of s 111 and its evident purpose, I do not consider that s 22(4) is of particular assistance in construing "makes" and "making" as those words are used in s 111(1) and (2). Section 22(4) deals with who first "makes" a cinematograph film and thus is entitled to copyright in his or her original work. Unlike its purpose in enacting s 22(4) to identify who made the very first version of a cinematographic film, the Parliament did not intend to give copyright under s 111 to individuals who made or copied films of others' copyright material. Section 111 deals with the position of a member of the community who "makes" what would otherwise be an infringing film by relieving him or her of the consequences of infringement if particular conditions are fulfilled. It is clear enough that the maker referred to in s 22(4) could never be the same as the person referred to as a maker in s 111(1) and (2) because such a result would fly in the face of the operation of s 111(3). That provision negates a person's exemption from infringing copyright under s 111(2), if he or she does any of the acts it specifies. The acts specified in s 111(3) quintessentially comprise aspects of the right to exploit one's own copyright. The person referred to as the "maker" of a film and the concept of "making" a film used in provisions such as ss 22(4), 90, 98 and 99 has all of the rights do what s 111(3) prevents the "maker" of a film referred to in s 111(1) doing with it.
70 I am of opinion that when s 111(1) and (2) refer to the "maker" and "making" they are dealing with individuals who are creating films or copies in the process of time-shifting. The use of the words "maker" and "making" elsewhere in the Act is different, namely, the latter use is the technical means of identifying the subsistence and ownership of copyright. Rather, in s 111(1) and (2), those words are used in the more colloquial sense, indeed in their natural and ordinary meaning, in order to identify who is to have the benefit, not of copyright in the film or copy, but of the exemption from liability for infringing another's copyright: see Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321 at 338 [34]-[35] per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ.
71 For these reasons, I am of opinion that the user alone did the acts involved in recording the copyright works. It follows that Optus did not do any of those acts.